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Introduction & Market Context
Elbit Systems Ltd (NASDAQ:ESLT) presented its latest investor presentation on May 20, 2025, showcasing exceptional financial performance for both the full year 2024 and first quarter of 2025. The Israeli defense technology company has capitalized on increasing global defense spending, particularly in Europe, while maintaining its strong position in domestic and North American markets.
The presentation comes as Elbit’s stock continues to perform strongly, with shares up 2.59% in regular trading and an additional 3.05% in pre-market activity following the presentation. According to recent trading data, Elbit shares are trading near $417.77, approaching their 52-week high of $426.40 and significantly above their 52-week low of $175.30.
As shown in the following company overview, Elbit Systems has established itself as a major player in the global defense industry:
Quarterly Performance Highlights
Elbit Systems delivered exceptional results in Q1 2025, with revenue increasing 22% year-over-year to $1.9 billion compared to $1.6 billion in Q1 2024. This strong performance follows an already impressive 2024, where the company achieved 14% revenue growth.
The company’s profitability metrics showed even stronger improvement, with Non-GAAP operating income rising 36% to $165 million and Non-GAAP diluted earnings per share jumping 42% to $2.57. These results continue the momentum from Q4 2024, when the company reported earnings that significantly exceeded market expectations, as reflected in the following financial highlights:
Elbit’s order backlog, a key indicator of future revenue potential, reached a record $23.1 billion as of March 31, 2025, representing a 14% increase from $20.4 billion in the same period last year. This robust backlog provides substantial revenue visibility and reflects strong demand for the company’s diverse portfolio of defense systems and solutions.
The company also demonstrated impressive cash flow generation, with $247 million in free cash flow during Q1 2025 and $190 million in net cash provided by operating activities. This financial strength has enabled Elbit to increase its quarterly dividend to 60 cents per share, up from 50 cents in the previous quarter.
Detailed Financial Analysis
Elbit Systems’ full-year 2024 results provide context for the company’s strong start to 2025. Revenue for 2024 reached $6.8 billion, a 14% increase from $6.0 billion in 2023. Non-GAAP operating income grew 23% to $550 million, while Non-GAAP diluted EPS rose 31% to $8.76.
The following chart illustrates the company’s key financial achievements for 2024:
The company’s revenue is well-diversified across both business segments and geographic regions. In 2024, Aerospace represented the largest segment at 27% of revenue ($2,036 million), followed by Land at 23% ($1,679 million), Elbit Systems America at 21% ($1,586 million), ISTAR & EW at 18% ($1,318 million), and C4I & Cyber at 11% ($800 million).
Geographically, Israel accounted for 29% of revenue, followed by Europe at 27%, North America at 22%, Asia-Pacific at 17%, and other regions making up the remainder. This diversification helps insulate the company from regional market fluctuations.
Particularly noteworthy is the improvement in operating margins across most business segments. The Land segment showed the most dramatic improvement, with operating margins increasing from 6.2% in 2023 to 9.0% in 2024. The Aerospace and C4I & Cyber segments also saw margin improvements, while Elbit Systems America returned to profitability with a 3.5% operating margin in 2024 after posting a loss in 2023.
The company’s long-term growth trajectory is impressive, with a 10% revenue CAGR and 20% backlog CAGR from 2020 to 2024. The backlog-to-revenue ratio has improved from 2.36 in 2020 to 3.23 in 2024, indicating strong future revenue potential.
Strategic Initiatives
Elbit Systems’ growth is being driven by several key strategic initiatives and market opportunities. The company has significantly expanded its presence in Europe, where defense spending is increasing in response to geopolitical tensions. European revenue grew by 106% from $885 million in 2021 to $1.82 billion in 2024.
The presentation highlighted that an increase in European defense spending from 2% to 3% of GDP could translate into an additional annual spending of $280 billion for European NATO member countries, representing a substantial growth opportunity for Elbit.
In Israel, Elbit continues to benefit from increasing defense budgets, with the Israeli defense budget projected to grow from 63 billion NIS in 2023 to 123 billion NIS by 2034. The company’s revenue in Israel has grown substantially, reaching $5.12 billion in 2024.
Elbit also maintains a strong presence in the United States, with $1.5 billion in North American revenues and 3,300 employees across 10 states. The company has established partnerships with major U.S. defense contractors including Boeing (NYSE:BA), General Dynamics (NYSE:GD), Textron (NYSE:TXT), Lockheed Martin (NYSE:LMT), and Raytheon (NYSE:RTN).
The company’s capital allocation strategy balances investments in organic growth with shareholder returns. In 2024, Elbit invested $466 million in R&D and $215 million in capital expenditures, while distributing $89 million in dividends to shareholders.
Forward-Looking Statements
Elbit Systems’ presentation suggests continued strong performance in 2025 and beyond, supported by its record backlog and favorable market conditions in key regions. The company’s improved financial position, with Net Debt/EBITDA ratio decreasing from 1.6 in 2023 to 0.9 in 2024, provides flexibility for future investments and potential acquisitions.
The company’s broad portfolio across air, land, naval, unmanned systems, networked warfare, cyber, and homeland security positions it well to capitalize on evolving defense priorities globally. Elbit’s "glocal" strategy—being global while maintaining local presence in key markets—has proven effective in securing contracts and building long-term relationships with defense ministries worldwide.
While the presentation naturally emphasizes positive developments, investors should consider potential risks including geopolitical tensions, supply chain disruptions, currency fluctuations, and competitive pressures in the defense sector. However, the company’s diversified revenue streams and strong backlog provide significant buffers against these challenges.
Based on the presentation and recent performance, Elbit Systems appears well-positioned to continue its growth trajectory through 2025, leveraging increasing defense budgets and its technological capabilities to expand market share in key regions.
Full presentation:
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