Elbit Systems’ Earnings Call Highlights Robust Growth

Elbit Systems ((IL:ESLT)) has held its Q3 earnings call. Read on for the main highlights of the call.

The recent earnings call for Elbit Systems showcased a robust financial performance, characterized by substantial growth in revenue, profit margins, and order backlog. The company has been buoyed by major new contracts, although some segments like Aerospace and Elbit Systems of America faced revenue declines. Overall, the sentiment was positive, with a focus on continued growth and strategic expansions.

Revenue Growth

Elbit Systems reported impressive revenue growth for the third quarter of 2025, with revenues reaching $1.922 billion, marking a 12% increase compared to the same period in 2024. For the nine months ending September 30, 2025, the company achieved an 18% growth, underscoring its strong market position and effective business strategies.

Profit Margin Expansion

The company saw a notable expansion in profit margins, with GAAP operating income for the third quarter at $171.4 million, or 8.9% of revenues, up from $125.8 million or 7.3% in the previous year. Non-GAAP operating income also rose to $186.7 million, representing 9.7% of revenues, highlighting improved operational efficiency.

Record Order Backlog

Elbit Systems achieved a record order backlog of $25.2 billion as of September 30, 2025, which is $3.1 billion higher than the previous year. This significant backlog reflects strong demand and the company’s ability to secure substantial contracts.

Significant New Contracts

The company signed an international contract valued at approximately USD 2.3 billion, the largest in its history, alongside another major contract worth $1.635 billion for European defense solutions. These contracts are pivotal for Elbit’s growth trajectory.

Cash Flow and Dividend

Elbit Systems generated $461 million in cash flow from operating activities for the nine months ending September 30, 2025. The Board of Directors declared a dividend of $0.75 per share, reflecting the company’s commitment to returning value to shareholders.

Aerospace Revenue Decline

The Aerospace segment experienced a 3% revenue decline year-over-year, primarily due to reduced sales of Precision Guided Munitions in the Asia Pacific region. This highlights challenges in specific markets despite overall growth.

Decrease in Elbit Systems of America Revenue

Elbit Systems of America reported a 2% decrease in revenue, attributed to a decline in sales of Electronic systems and medical instruments. This segment’s performance indicates areas needing strategic focus.

Operational Challenges

The company faced operational disruptions due to regional conflicts, impacting normal business operations. However, the situation is stabilizing with a ceasefire, which should alleviate some operational pressures.

Forward-Looking Guidance

Elbit Systems provided optimistic forward-looking guidance, with a 12% year-over-year increase in revenues and a substantial backlog increase to $25.2 billion, 69% of which comes from international orders. The company anticipates continued growth driven by strong demand in Europe and Israel, particularly in areas like C4I and Cyber, and Land, which saw significant revenue increases. The effective tax rate reduction and strong cash generation further bolster the company’s positive outlook.

In summary, Elbit Systems’ earnings call reflected a strong financial performance, with significant growth in key areas despite some challenges. The company’s strategic expansions and new contracts position it well for future growth, maintaining a positive outlook for stakeholders.