ESLT earnings call summary

Prepared Highlights

• Q4 2025 revenues increased 11% to $2.149 billion, first time quarterly revenues surpassed $2 billion (CFO). Full-year 2025 revenues increased 16% to $7.939 billion (CFO).
• Segment Q4 revenue growth vs Q4 2024: C4I and Cyber +19% (radio and command/control in Europe and Israel); ISTAR and EW +39% (Maritime, Electro-Optic, EW, counter-UAS); Land +22% (ammunition and munitions in Israel and Europe); Elbit Systems of America +9% (Night-Vision and Maritime, partially offset by medical devices decline); Aerospace -14% (training/simulation in Europe and higher PGM sales in Q4 2024) (CFO).
• Full-year 2025 revenue geographic mix: Europe 27%, North America 21%, Asia Pacific 16%, Israel 32% (CFO).
• GAAP gross margin Q4 2025: 24.7% vs 24.1% Q4 2024; full-year 2025: 24.4% vs 24.0% 2024 (CFO). Non-GAAP gross margin Q4 2025: 25.0% vs 24.5% Q4 2024; full-year 2025: 24.7% vs 24.5% 2024 (CFO).
• GAAP operating income Q4 2025: $192 million (9.0% of revenues) vs $141 million (7.3%) Q4 2024; full-year 2025: $671 million (8.5%) vs $489 million (7.2%) 2024 (CFO). Non-GAAP operating income Q4 2025: $210 million (9.8%) vs $157 million (8.2%) Q4 2024; full-year 2025: $737 million (9.3%) vs $550 million (8.1%) 2024 (CFO).
• Backlog as of Dec 31, 2025: $28.1 billion, ~$5.5 billion higher than end of 2024; 72% from outside Israel; 54% scheduled for 2026-2027, rest for 2028 and beyond (CFO).
• Net cash from operations 2025: $778 million vs $535 million in 2024 (CFO). Free cash flow 2025: $553 million, up 73% from $320 million in 2024 (CFO).
• GAAP diluted EPS Q4 2025: $3.52 vs $2.00 Q4 2024; full-year 2025: $11.39 vs $7.18 2024 (CFO). Non-GAAP diluted EPS Q4 2025: $3.56 vs $2.66 Q4 2024; full-year 2025: $12.75 vs $8.76 2024 (CFO).
• Board declared dividend of $1 per share (CFO).
• Official guidance: No forward guidance ranges provided in prepared remarks.
• CapEx context: Significant strategic CapEx investments expanding production facilities in Israel (Ramat Beka), Germany, Sweden, Romania, and the U.S. (CEO).

Mgmt quotes

• "We are closing another strong year and quarter, delivering double-digit growth in revenues, operating profit, EPS and backlog, which grew by $5.5 billion." (CFO)
• "We take great pride in our diverse global customer base, which is a key differentiator for Elbit and ensure we are not reliant on any single country's defense budget." (CFO)
• "I am happy we have reached our internal targets for operating profit margins." (CFO)
• "Europe accounted for 27% of Elbit sales in 2025, surpassing the $2 billion mark. We believe Europe will remain our primary growth engine going forward with Germany playing a central role." (CEO)
• "Elbit entered 2026 stronger, more resilient and better positioned than ever. With a record backlog, breakthrough technologies achievement, expanding capacity and global team that delivers under the most demanding conditions, we are confident in our ability to sustain our growth." (CEO)

Prepared Metrics

Q&A Batch (1-2 of 2)

Q1 — Kristine Liwag

• Topic: CapEx investment, capacity expansion, and revenue growth potential
• Key points:
  • CapEx increased to $225 million in 2025, planned to rise to ~$300 million in 2026; historically ~$200 million annually for 5 years.
  • Investments include tripling the southern Israel ammunition factory, expanding electronic assembly factories in Israel and abroad, and new Ramat Beka facility (deliveries starting soon).
  • Backlog grew 24% in 2025, revenue grew 16%; management sees double-digit growth potential due to convergence.
  • Customers are co-investing alongside Elbit; new facilities use robots and AI to boost productivity; some factories run 3 shifts.
• Mgmt stance: Bullish — strong free cash flow supports higher CapEx; vertical integration and inventory buffers mitigate supply chain risks; new capacity meets record demand.

Q2 — Ellen Page

• Topic: PULS system opportunity in Europe and margin outlook
• Key points:
  • Greek contract approved by parliament but not yet in backlog; German initial contract for small quantity, not yet full production.
  • PULS is a generic launcher firing different missiles/loitering munitions; open architecture; joint ventures with KNDS and DI in Germany for European production (EuroPULS).
  • Q4 profitability at 9.8%, expanded across most segments except C4ISR; margins expanded for 4 consecutive years at ~1% annually.
  • Self-funded R&D will increase but not harm operating profit or EPS; operational leverage from revenue growth and backlog profitability supports continued margin expansion.
• Mgmt stance: Bullish — PULS is a leading solution with European partnerships; margin expansion trend expected to continue due to operational leverage and strong backlog.