Elbit Systems Reports Q3 2025 Results

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Elbit Systems Ltd., the international high technology defense company, reported its consolidated results for the third quarter ended September 30, 2025.

Management Comment:

Bezhalel (Butzi) Machlis, President and CEO of Elbit Systems, stated: "Elbit Systems today reports strong quarterly results, with double-digit growth in sales and profits, as well as continued, consistent expansion of the order backlog, which has reached a record level of over $25 billion, providing long term visibility for the coming years. These results reflect the significant contracts the Company has secured across Europe and from customers worldwide, who continue to choose Elbit Systems' advanced systems amid the ongoing global conflicts and increasing defense budgets. Our tested and proven systems contribute to substantial operational successes and achievements, and they strengthen the national security of many countries, including those in Europe, which has become a major market for the Company. I wish to thank Elbit Systems' employees, customers and business partners worldwide for their dedication and unwavering commitment during challenging and difficult times. We continue to work relentlessly and invest in research and development, to create significant added value in the face of global security challenges, and the results we are presenting today reflect these important collective efforts."

Third quarter 2025 results:

Revenues in the third quarter of 2025 were $1,921.6 million, as compared to $1,717.5 million in the third quarter of 2024.

Aerospace revenues decreased by 3% in the third quarter of 2025, as compared to the third quarter of 2024, mainly due to the decrease in Precision Guided Munition (PGM) sales in Asia Pacific, partially offset by the increase in PGM sales in Israel. C4I and Cyber revenues increased by 14%, mainly due to radio systems and command and control systems sales in Europe. ISTAR and EW revenues increased by 5%, mainly due to Electro-Optic systems and Electronic Warfare systems sales in Israel. Land revenues increased by 41%, mainly due to ammunition and munition sales in Israel and Europe. Elbit Systems of America revenues decreased by 2%, mainly due to the decrease in Electronic systems and medical instrumentation sales, partially offset by the increase in Maritime and in Warfighters systems sales.

GAAP gross profit in the third quarter of 2025 was $478.2 million (24.9% of revenues), as compared to $412.8 million (24.0% of revenues) in the third quarter of 2024. Non-GAAP(*) gross profit amounted to $484.3 million (25.2% of revenues) in the third quarter of 2025, as compared to $419.4 million (24.4% of revenues) in the third quarter of 2024.

Research and development expenses, net were $129.1 million (6.7% of revenues) in the third quarter of 2025, as compared to $119.9 million (7.0% of revenues) in the third quarter of 2024.

Marketing and selling expenses, net were $91.0 million (4.7% of revenues) in the third quarter of 2025, as compared to $91.3 million (5.3% of revenues) in the third quarter of 2024.

General and administrative expenses, net were $86.7 million (4.5% of revenues) in the third quarter of 2025, as compared to $75.7 million (4.4% of revenues) in the third quarter of 2024.

GAAP operating income in the third quarter of 2025 was $171.4 million (8.9% of revenues), as compared to $125.8 million (7.3% of revenues) in the third quarter of 2024. Non-GAAP(*) operating income was $186.7 million (9.7% of revenues) in the third quarter of 2025, as compared to $140.7 million (8.2% of revenues) in the third quarter of 2024.

Financial expenses, net were $34.5 million in the third quarter of 2025, as compared to $45.0 million in the third quarter of 2024. The decrease in financial expenses, net in the third quarter of 2025, was mainly due to a reduction in the average net debt.

Taxes on income were $11.4 million (effective tax rate of 8.2%) in the third quarter of 2025, as compared to $12.8 million (effective tax rate of 14.6%) in the third quarter of 2024. The decrease in effective tax rate in the third quarter of 2025, was mainly due to the increase in deferred tax assets.

GAAP net income attributable to the Company's shareholders in the third quarter of 2025 was $133.4 million (6.9% of revenues), as compared to $79.1 million (4.6% of revenues) in the third quarter of 2024. The increase in net income attributable to the Company's shareholders in the third 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 third quarter of 2025 was $159.8 million (8.3% of revenues), as compared to $98.8 million (5.8% of revenues) in the third quarter of 2024.

GAAP diluted earnings per share attributable to the Company's shareholders in the third quarter of 2025 were $2.80, as compared to $1.77 in the third quarter of 2024. Non-GAAP(*) diluted net earnings per share attributable to the Company'sshareholders were $3.35 for the third quarter of 2025, as compared to $2.21 for the third quarter of 2024.

The Company's order backlog as of September 30, 2025 totaled $25.2 billion. The increase in backlog during the quarter came mainly from new European orders. Approximately 69% of the current backlog is attributable to orders outside of Israel. Approximately 38% of the order backlog is scheduled to be performed during the remainder of 2025 and 2026.

Cash flow provided by operating activities in the nine months ended September 30, 2025 was $461.0 million, as compared to $82.5 million in the nine months ended September 30, 2024. The cash flow in the nine months ended September 30, 2025 was affected mainly by the strong increase in net income.

Impact of recent conflicts in the Middle East on the Company:

The war which began on October 7, 2023, continued throughout most of 2025, until a cease fire was agreed with Hamas on October 9, 2025. A cease fire between Israel and Iran was declared on June 24, 2025, following the preceding 12-day conflict.

Since the commencement of the 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. Such increased demand may continue and could generate material additional orders to the Company.

As a result of the war and the other conflicts in the Middle East, 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 and elevated prices, employee call-ups for reserve duty, limitations imposed by some countries on engagement with Israel and attacks on some of Elbit Systems' global facilities by anti-Israeli organizations.

Elbit Systems has taken various steps to protect its employees worldwide, to support increased production, to increase raw material and component inventories, to mitigate supply chain disruptions and to maintain business continuity. Following the cease fires, these operational effects on the Company have been reduced. Future developments are difficult to predict at this time.

Recent Events:

On September 17, 2025, the Company announced that the Israel Securities Authority extended the term of the Company's shelf prospectus filed in September 2023, by 12 months, until September 27, 2026.

On October 30, 2025, the Company announced that at its Annual General Meeting of Shareholders held on October 29, 2025 at the Company's offices in Haifa, the proposed resolutions described in the Proxy Statement to the Shareholders dated September 18, 2025 were approved by the required majority.

On November 17, 2025, the Company announced that it has signed an international contract for a strategic solution in an amount of approximately $2.3 billion. The contract will be performed over a period of eight years.

Dividend:

The Board of Directors declared a dividend of $0.75 per share. The dividend's record date is December 22, 2025. The dividend will be paid on January 5, 2026, after deduction of withholding tax, at the rate of 16.8%