Elbit Systems Ltd, the Haifa-based defence technology company, posted second-quarter 2026 revenues of $2.29 billion, up from $1.97 billion a year earlier, driven by strong demand across its land, cyber and intelligence systems businesses. GAAP net income rose to $173.6 million, or $3.61 per diluted share, compared with $125.7 million, or $2.69 per share, in the same period last year. On a non-GAAP basis, net income reached $199.1 million, or $4.14 per share.
CEO Bezhalel “Butzi” Machlis credited the results to sustained momentum across sales, backlog and earnings, along with improved profitability and strong cash generation. He pointed to the company’s record $32 billion backlog as evidence of continued global customer confidence, and highlighted Elbit’s push into next-generation directed energy technology, including a newly unveiled airborne high-power laser system being developed for helicopters and fighter aircraft.
Growth was broad-based but uneven across segments. Land systems revenue jumped 32%, fuelled by ammunition and munitions sales in Israel. ISTAR and electronic warfare revenue rose 22% on increased sales of airborne and land-based high-power laser, electronic warfare and maritime systems in the Asia-Pacific region.
Elbit Systems of America grew 17%, helped by a favourable one-time project mix and stronger sales of night-vision, maritime and electronic systems. C4I and cyber revenue increased 11%, largely on radio and command-and-control system sales in Europe. Aerospace was the lone decliner, falling 8% due to an unfavourable project mix and weaker training and simulation sales in Europe, partially offset by higher UAV sales in Israel.
Profitability improved across the board. Gross margin expanded to 25.3% of revenue on a GAAP basis, up from 24.0% a year earlier, while operating margin rose to 9.6% from 8.0%. Research and development spending increased to $159.1 million, reflecting continued investment in future technology. The company’s effective tax rate nearly tripled to 16.4%, up from 5.6%, which Elbit attributed to the implementation of new OECD Pillar II global minimum tax rules.
The backlog itself tells a story of geographic diversification: roughly 73% of the current order book comes from customers outside Israel, with Europe driving much of the quarter’s backlog growth. About 42% of the backlog is scheduled for delivery through the end of 2027, giving the company substantial revenue visibility.
Elbit’s results also reflect the turbulent security environment in which it operates. The company detailed a chain of escalating Middle East conflicts since October 2023, including a joint US-Israel strike on Iran in February 2026, retaliatory attacks across the Gulf region, and a since-collapsed US-Iran memorandum of understanding signed in June.
Hostilities between the US and Iran have reportedly resumed as of early July. Elbit said continued regional instability has driven sustained elevated demand from Israel’s Ministry of Defence, even as the same conflicts have periodically disrupted its supply chains, raised transportation costs and pulled employees into reserve military duty.
On the business development front, Elbit disclosed two major recent contract wins: a roughly $350 million award from an international customer for Main Battle Tank upgrades, including fire control and communication systems, to be delivered over four years; and more than $370 million in combined awards from US Customs and Border Protection, with work running through May 2029.
The company’s board also declared a dividend of $1.00 per share, payable October 26 to shareholders of record as of October 13, subject to a 16.8% withholding tax.
