Order backlog at $23.8 billion; Revenues of $2.0 billion; GAAP net income of $125.7 million; Non-GAAP net income of $151.0 million; GAAP net EPS of $2.69; Non-GAAP net EPS of $3.23
HAIFA, Israel, Aug. 13, 2025 /PRNewswire/ -- Elbit Systems Ltd. ("Elbit Systems" or the "Company") $(ESLT)$ (TASE: ESLT), the international high technology defense company, reported today its consolidated results for the second quarter ended June 30, 2025.
In this release, the Company is providing US-GAAP results as well as non-GAAP financial data, which are intended to provide investors a more comprehensive view of the Company's business results and trends. For a description of the Company's non-GAAP definitions see page 11 below, "Non-GAAP financial data". Unless otherwise stated, all financial data presented is US-GAAP financial data.
Management Comment:
Bezhalel (Butzi) Machlis, President and CEO of Elbit Systems, commented:
Elbit Systems delivers strong financial results, with revenues growing 21% year over year and non-GAAP EPS up 55%, as well as strong free cash flow generation; leveraging strong domestic and global demand and presence. Elbit Systems continues its upward momentum, driven by sustained demand for its proven technologies and solutions. The Company's long-term strategy and investments have positioned the Company for continued future growth. Elbit Systems' robust presence in Europe, built through subsidiaries, production infrastructure, and strategic partnerships, has laid the groundwork for securing major contracts that strengthen customer relationships. Elbit Systems' dedicated employees worldwide continue to be the driving force behind these milestones."
Second quarter 2025 results:
Revenues in the second quarter of 2025 were $1,972.7 million, as compared to $1,626.2 million in the second quarter of 2024.
Aerospace revenues increased by 12% in the second quarter of 2025, as compared to the second quarter of 2024, mainly due to increased Precision Guided Munition $(PGM)$ sales in Israel and Asia Pacific and UAS sales in Europe. C4I and Cyber revenues increased by 21%, mainly due to radio systems and command and control systems sales in Israel and Europe. ISTAR and EW revenues increased by 15%, mainly due to Electro-Optic systems sales in Israel and Electronic Warfare systems sales in Europe. Land revenues increased by 45%, due to ammunition and munition sales in Israel and Europe. Elbit Systems of America revenues increased by 4%, due to the increase in Maritime and Warfighters systems sales.
For distribution of revenues by segments and geographic regions see the tables on page 10.
GAAP gross profit in the second quarter of 2025 was $472.9 million (24.0% of revenues), as compared to $389.7 million (24.0% of revenues) in the second quarter of 2024. Non-GAAP(*) gross profit amounted to $480.4 million (24.4% of revenues) in the second quarter of 2025, as compared to $396.2 million (24.4% of revenues) in the second quarter of 2024.
Research and development expenses, net were $129.7 million (6.6% of revenues) in the second quarter of 2025, as compared to $116.8 million (7.2% of revenues) in the second quarter of 2024.
Marketing and selling expenses, net were $91.5 million (4.6% of revenues) in the second quarter of 2025, as compared to $87.7 million (5.4% of revenues) in the second quarter of 2024.
General and administrative expenses, net were $93.9 million (4.8% of revenues) in the second quarter of 2025, as compared to $68.7 million (4.2% of revenues) in the second quarter of 2024. The increase in general and administrative expenses, net in the second quarter of 2025, was mainly due to one-time expenses incurred during the current quarter. General and administrative expenses, net during the second quarter of 2024 were lower than average of 2024.
GAAP operating income in the second quarter of 2025 was $157.8 million (8.0% of revenues), as compared to $116.5 million (7.2% of revenues) in the second quarter of 2024. Non-GAAP(*) operating income was $175.1 million (8.9% of revenues) in the second quarter of 2025, as compared to $130.5 million (8.0% of revenues) in the second quarter of 2024.
Financial expenses, net were $31.2 million in the second quarter of 2025, as compared to $29.1 million in the second quarter of 2024.
Taxes on income were $7.1 million (effective tax rate of 5.6%) in the second quarter of 2025, as compared to $11.3 million (effective tax rate of 13.2%) in the second quarter of 2024. The decrease in effective tax rate for the second quarter of 2025, was mainly due to the increase in deferred tax assets and the settlement of tax assessments.
GAAP net income attributable to the Company's shareholders in the second quarter of 2025 was $125.7 million (6.4% of revenues), as compared to $78.4 million (4.8% of revenues) in the second quarter of 2024. The increase in net income attributable to the Company's shareholders in the second quarter of 2025 was in line with the increase in the Company's activity and order backlog. Non-GAAP(*) net income attributable to the Company's shareholders in the second quarter of 2025 was $151.0 million (7.7% of revenues), as compared to $92.7 million (5.7% of revenues) in the second quarter of 2024.
GAAP diluted earnings per share attributable to the Company's shareholders in the second quarter of 2025 were $2.69, as compared to $1.76 in the second quarter of 2024. Non-GAAP(*) diluted net earnings per share attributable to the Company's shareholders were $3.23 for the second quarter of 2025, as compared to $2.08 for the second quarter of 2024.
The Company's order backlog as of June 30, 2025 totaled $23.8 billion. Approximately 68% of the current backlog is attributable to orders outside of Israel. Approximately 46% of the order backlog is scheduled to be performed during the remainder of 2025 and 2026.
Cash flow provided by operating activities in the six months ended June 30, 2025 was $304.0 million, as compared to $26.0 million in the six months ended June 30, 2024. The cash flow in the six months ended June 30, 2025 was affected mainly by the strong increase in net income.
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* see page 11
Impact of recent conflicts in the Middle East on the Company:
The "Swords of Iron" war, which began on October 7, 2023, after the Hamas terrorists attack on Israeli civilian and military targets, followed by attacks from Iran and other terrorist organizations on different fronts including Hezbolla in Lebanon, the Houthi movement in Yemen and rebel militia in Syria, is still on-going, albeit in varied intensity levels. On June 13 2025, the conflict between Israel and Iran escalated into high intensity mutual violent attacks which lasted until a cease fire was declared on June 24, 2025.
Since the commencement of the "Swords of Iron" war, Elbit Systems has experienced a material increase in the demand for its products and solutions from the Israel Ministry of Defense (IMOD) compared to the demand levels prior to the war. At the same time, the Company and its subsidiaries around the world continue to conduct their business in international markets. Subject to further developments, which are difficult to predict, the IMOD's increased demand for the Company's products and solutions may continue and could generate material additional orders to the Company.
The majority of the Company's facilities in Israel continue to operate uninterrupted. Some of Elbit Systems' operations have experienced disruptions due to supply chain and operational constraints, including among others increases in transportation costs and delays due to factors such as the Houthi movement attacks on shipping in the Red Sea, material and component shortages, limitations imposed by some countries on exports to Israel and attacks on some of Elbit Systems' global facilities by anti-Israeli organizations.
Elbit Systems has taken a number of steps to protect the safety and security of its employees in Israel and abroad, to support increased production, mitigate existing and potential supply chain disruptions and to maintain business continuity, including increased monitoring of global supply chains to identify delays, shortages and bottlenecks, rescheduling deliveries to certain customers as necessary and maintaining increased inventories. As of June 30, 2025, the percentage of employees called up for reserve duty was approximately 5%. This rate could fluctuate depending on future developments.
The extent of the effects of the recent conflicts in the Middle East on the Company's performance will depend on future developments that are difficult to predict at this time, including their duration and scope. We continue to monitor the situation closely.
Recent Events:
On May 21, 2025, the Company announced the public offering of 1,365,450 ordinary shares at a price to the public of $375 per share. In addition, the Company granted the underwriters of the offering a 30-day option to purchase from the Company 204,817 additional ordinary shares at the public offering price, less underwriting discounts and commissions, which was exercised in full by the underwriters, as reported by the Company on May 23, 2025. All ordinary shares sold in the offering were offered by the Company and listed for trading on the Nasdaq Global Select Market. On May 23, 2025, the Company announced the closing of the offering, with total gross proceeds of approximately $588.8 million.
On June 3, 2025, the Company announced that S&P Global Ratings Maalot Ltd., an Israeli rating agency ("Maalot"), issued its rating report regarding Elbit Systems (the "Rating Report"). In its Rating Report, Maalot raised its long term rating to "ilAA+" (on local scaling) with a stable outlook regarding the Company's Series B, C and D Notes, and reaffirmed its short term rating of "ilA-1+" (on local scaling) regarding the Company's Commercial Paper.
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