Elbit continues to break records: order backlog reaches $32 billion
The largest Israeli defense company reported a 38% jump in net profit, despite a sharp increase in tax payments. The key figure explaining sustained investor interest is the record order backlog, which secures the company's growth for years to come.
Elbit Systems, the Israeli weapons manufacturer and one of the leading stocks on the Tel Aviv Stock Exchange, has published its results for the second quarter of 2026. Revenues climbed to approximately $2.29 billion, an increase of about 16% compared to the same period last year, surpassing analyst expectations of $2.23 billion.
Net profit (on a GAAP basis) attributable to shareholders totaled $173.6 million, a jump of about 38% compared to $125.7 million in the corresponding quarter. Earnings per share rose to $3.61, compared to $2.69. In adjusted terms (Non-GAAP), profit reached $199.1 million, and earnings per share reached $4.14, while analysts expected $3.68 per share.
This impressive performance was achieved despite a significant headwind: taxes. The company's effective tax rate jumped from 5.6% in the corresponding quarter to 16.4%, following the implementation of the OECD's global minimum tax rules (Pillar II). The secret to this growth lies in improved profitability, with operating profit climbing to $218.8 million, or 9.6% of revenues, compared to 8% last year.
Growth was supported by almost all areas of activity. The land sector jumped by 32%, mainly due to ammunition sales in Israel. The electronic warfare and intelligence sectors grew by 22%, partly thanks to the sale of high-power laser systems in the Asia-Pacific region, and activity in the USA rose by 17%. Only the aeronautics sector weakened, showing a decline of 8%.
If there is one figure that explains why investors continue to favor the stock, it is the order backlog. As of the end of June, the backlog stood at $32 billion—about 3.5 times the company's annual sales. Approximately 73% of orders come from outside Israel, reflecting the global rearmament wave, and about 42% of the backlog is planned for execution by the end of 2027.
Notable orders include a $350 million contract for tank upgrades for an international client and contracts totaling over $370 million received by the US subsidiary from the US Customs and Border Protection.
Elbit is the third-largest company on the Tel Aviv Stock Exchange by value. The growth in operating cash flow to $517.8 million in the first half and a dividend of $1 per share reinforce its importance in Israeli pension portfolios. However, the company notes that an unstable geopolitical environment, such as the resumed conflict between the USA and Iran following the collapse of the Versailles understanding, creates both demand and supply chain uncertainty.
Bezhalel (Butzi) Machlis, President and CEO of Elbit Systems, stated:
"The trend of solid growth continued in the second quarter, leading to double-digit growth in sales, order backlog, and earnings per share. Our order backlog reached a new record of $32 billion, reflecting long-term resilience and the continued trust of our customers around the world. We continue to invest in production infrastructure and the development of next-generation high-power laser systems and directed energy capabilities, including new airborne systems for helicopters and fighter jets, to ensure the company's future growth."
