Elbit Systems Q2 2025 slides: Revenue jumps 21%, backlog reaches record $23.8B

Introduction & Market Context

Elbit Systems Ltd (NASDAQ:ESLT) presented its Q2 2025 investor presentation on August 13, 2025, revealing robust financial performance and continued growth momentum. The defense technology company’s stock responded positively, rising 6.71% in premarket trading to $466.50, building on its 4.99% gain during the previous session.

The presentation comes amid heightened global defense spending, particularly in Israel and Europe, where geopolitical tensions have prompted increased military budgets. Elbit, ranked 22nd in the Defense News Global 100 Defense Companies in 2024, continues to capitalize on this favorable market environment through its diversified product portfolio and strategic global presence.

Quarterly Performance Highlights

Elbit Systems reported exceptional financial results for Q2 2025, with significant growth across all key performance indicators. Revenue increased by 21% compared to Q2 2024, while Non-GAAP operating income surged 34% to $175 million. Most notably, Non-GAAP diluted earnings per share jumped 55% to $3.23.

As shown in the following quarterly financial highlights:

Cash generation also showed remarkable improvement, with net cash provided by operating activities increasing by 272% to $120 million. This strong performance builds on the momentum seen in Q1 2025, when the company reported revenue of $1.896 billion and Non-GAAP diluted EPS of $2.57, exceeding market expectations.

The company’s annual performance for 2024 similarly demonstrated strong growth, with revenues increasing 14% and Non-GAAP operating income rising 23% to $550 million:

Detailed Financial Analysis

Elbit Systems’ order backlog reached a record $23.8 billion in Q2 2025, representing a 12% increase year-over-year and continuing the upward trajectory from the $23.1 billion reported in Q1 2025. This growing backlog, which now stands at 3.16 times annual revenue, provides strong visibility for future growth.

The company has maintained impressive growth rates over the past five years, with a revenue CAGR of 10% and a backlog CAGR of 17% from 2020 to 2025:

Revenue diversification remains a key strength for Elbit Systems. For the last twelve months ending Q2 2025, the company’s revenue breakdown by segment shows a balanced portfolio, with Aerospace contributing 27% ($2,174 million), Land 25% ($2,041 million), ESA 21% ($1,662 million), ISTAR & EW 17% ($1,382 million), and C4I & Cyber 11% ($862 million).

Geographically, Israel represents the largest market at 31% of revenue, followed by Europe at 26% and North America at 22%, highlighting the company’s global reach:

Strategic Initiatives

Elbit Systems continues to strengthen its global presence, with particular focus on expanding in Europe and maintaining its strong position in the United States. European revenue grew by 106% from $885 million in 2021 to $1.82 billion in 2024, as the company capitalizes on increased defense spending across the continent. The presentation notes that a potential increase in European NATO members’ defense spending from 2% to 3% of GDP could translate to an additional $280 billion in annual spending.

In the United States, Elbit maintains a significant footprint with $1.6 billion in revenues and 3,200 employees across 10 states. The company’s partnerships with major defense contractors like Boeing, General Dynamics, Lockheed Martin, and Raytheon Technologies further strengthen its market position.

The company’s capital allocation strategy focuses on organic growth through R&D investment ($466 million in 2024) and strategic capital expenditures ($215 million in 2024). Elbit also raised $589 million through a share offering in May 2025, providing additional resources for growth initiatives.

As shown in the following capital allocation breakdown:

Forward-Looking Statements

Elbit Systems’ growing backlog and strong financial performance position the company for continued growth. In a positive sign for shareholders, the quarterly dividend increased to 75 cents per share from 60 cents in Q1 2025, reflecting management’s confidence in the company’s financial health and future prospects.

During the Q1 2025 earnings call, CEO Botsi Mutlis expressed optimism about the industry outlook, stating, "Investment in defense, I believe, will continue in the future." This sentiment appears to be validated by the strong Q2 2025 results presented.

The company’s focus on innovation and strategic acquisitions remains central to its growth strategy. Historically, Elbit has made value-creating acquisitions to acquire technologies and market positions, including ELOP (2000), ELISRA (2005), SOLTAM (2010), IMI (2015), and more recently HNV (2020).

While the presentation highlights Elbit’s strong performance and growth trajectory, investors should note that the company faces potential challenges, including supply chain disruptions, geopolitical tensions affecting international sales, and technological competition. However, the record backlog and diversified revenue streams provide significant buffers against these risks.

As global defense spending continues to rise in response to geopolitical tensions, Elbit Systems appears well-positioned to capitalize on these market trends through its comprehensive product portfolio and established global presence.

Full presentation:

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