Elbit Systems ((IL:ESLT)) has held its Q4 earnings call. Read on for the main highlights of the call.
The recent earnings call from Elbit Systems painted a picture of robust growth and strategic international expansion. Despite facing some challenges, such as decreased gross margins and increased financial expenses, the overall sentiment was positive, with significant achievements in revenue growth and backlog expansion, particularly in European markets.
Record Revenue Growth
Elbit Systems reported a remarkable increase in revenues for the fourth quarter, up by 19% to $1,930 million compared to the same period in 2023. For the full year of 2024, revenues rose by 14% to $6,828 million, showcasing the company’s strong financial performance and effective growth strategies.
Strong Backlog and International Growth
The company’s backlog of orders reached an impressive $22.6 billion by the end of 2024, marking an increase of approximately $4.8 billion from the previous year. Notably, 65% of this backlog was generated from international markets, underscoring Elbit Systems’ successful expansion beyond Israel.
Increased Free Cash Flow
Elbit Systems significantly improved its free cash flow, delivering $320 million in 2024. This improvement reflects the company’s enhanced operational efficiency and financial management.
EPS Growth
The earnings per share (EPS) saw notable growth, with non-GAAP diluted EPS reaching $8.76 for the full year of 2024, compared to $6.70 in 2023. The GAAP diluted EPS also rose to $7.18 from $4.82, indicating strong profitability.
Expansion in Europe
Elbit Systems secured significant contracts in Europe, including deals with NATO European countries and the German government. The European Commission’s announcement of a EUR150 billion defense budget further supports the company’s growth prospects in the region.
Decreased Gross Margins
The company experienced a slight decrease in non-GAAP gross margins, with the fourth quarter margin at 24.5%, down from 25.3% in the same period of 2023. For the full year, the margin was 24.5%, compared to 25.7% in 2023, reflecting some cost pressures.
Increased Financial Expenses
Financial expenses rose to $151 million in 2024, up from $137 million in 2023. This increase was primarily due to factoring expenses related to the extension of the premises evacuation agreement.
Forward-Looking Guidance
Looking ahead, Elbit Systems anticipates continued growth across multiple financial metrics. The company expects to maintain its momentum in revenue growth, driven by increased demand in segments like Aerospace and Land. With a focus on expanding its product portfolio and geographical presence, particularly in Europe, Elbit Systems is well-positioned for future success.
In conclusion, Elbit Systems’ earnings call highlighted a period of substantial growth and strategic international expansion. Despite some challenges, the company’s strong revenue performance, increased backlog, and successful European ventures underscore its positive outlook. Investors can look forward to continued growth as Elbit Systems capitalizes on its strategic initiatives and market opportunities.