Tel Aviv: Israel Aerospace Industries Ltd., a leader in the Israeli military and commercial homeland defence and aerospace markets, has issued its consolidated financial statements for the quarter ended March 31, 2026.
The Company’s revenues in Q1 2026 amounted to about USD 2,086 million compared with about USD 1,610 million in Q1 2025, an increase of about USD 476 million (about 30%), deriving mainly from increased sales in the Company’s entire business groups and mainly in the Systems Missiles & Space Group and the ELTA Group.
The sales of the Military Groups in Q1 2026 increased by about 31% to about USD 1,825 million, up from about USD 1,389 million in Q1 2025, an increase of USD 436 million. The sales of the Aviation Group in Q1 2026 increased by about 12% to USD 415 million, up from about USD 372 million in Q1 2025, an increase of USD 43 million.
Sales for export in Q1 2026 totaled about USD 1,348 million (about 65% of sales) and sales to the local market totaled about USD 738 million (about 35% of sales), compared with about USD 1,041 million (about 65% of sales) and about USD 569 million (about 35% of sales) in Q1 2025, respectively.
Net income in Q1 2026 rose by about 34% to USD 220 million (about 11% of sales), compared with net income of about USD 164 million (about 10% of sales) in Q1 2025. The net income of the Military Groups in Q1 2026 increased by 48% to about USD 251 million, up from about USD 170 million in Q1 2025, an increase of USD 81 million. The net income of the Aviation Group in Q1 2026 was about USD 6 million compared with the net income of about USD 9 million in Q1 2025.
EBITDA in Q1 2026 grew by about 34% to USD 321 million compared with about USD 240 million in Q1 2025.
Gross profit in Q1 2026 amounted to about USD 374 million (about 18% of sales), up from USD 305 million (about 19% of sales) in Q1 2025, an increase of USD 69 million. The gross profit of the Military Groups in Q1 2026 increased by 28% to about USD 338 million, up from about USD 264 million in Q1 2025, an increase of USD 74 million. The gross profit of the Aviation Group in Q1 2026 amounted to about USD 33 million compared with about USD 35 million in Q1 2025.
Operating income in Q1 2026 grew by about 45% to about USD 239 million (about 11% of sales) compared with operating income of USD 165 million (about 10% of sales) in Q1 2025, an increase of USD 74 million arising mainly from the increase in gross profits. The operating income of the Military Groups in Q1 2026 amounted to about USD 224 million, up from about USD 139 million in Q1 2025, an increase of USD 85 million. The operating income of the Aviation Group in Q1 2026 was about USD 13 million compared with about USD 16 million in Q1 2025.
In parallel, Israel Aerospace Industries (IAI) also announced an agreement with the Israeli Ministry of Defence for the sale of air defence systems, with a total value of approximately $1 billion.
IAIs’ products play a crucial and significant role in the defence of the State of Israel. The contracts from the Israeli defence establishment are a direct reflection of the exceptional technological performance of the Company’s systems, as well as the operational requirements derived from the Israeli defence establishments’ needs.
Boaz Levy, who until recently served as President and CEO of IAI, has assumed the position of Chairman of the Board of Directors. Concurrently, Moshe Levy has been appointed Acting President and CEO, in addition to his current role as EVP and GM of the Military Aircraft Group, pending the completion of the appointment process for the company’s new President and CEO.
Commenting on the Q1 2026 financial statements, IAI’s Chairman of the Board, Boaz Levy, said, “We are proud to open the first quarter of 2026 with exceptional business results, reflecting the unique trust placed in IAI by our allies and customers in Israel and around the world. This trust is built on shared values, long-standing partnerships, and a commitment to building a safer future for the State of Israel and the entire free world. IAI serves as a central pillar in ensuring the security and economic growth of the State of Israel, with its systems operating daily to protect the country’s citizens against a wide range of threats, systems whose capabilities were demonstrated even more prominently during the recent war, especially the Arrow air defence system against ballistic threats. IAI is blessed with some of the finest minds, employees from all sectors of Israeli society, who deserve tremendous appreciation for their contribution to both national security and the economy, driven by a deep sense of mission, dedication, and commitment. I am confident that the company’s developments will continue to serve as a significant security anchor for the State of Israel, provide the defence establishment with groundbreaking capabilities that preserve its qualitative edge, and strengthen our partners and allies around the world.”
IAI’s CFO, Eran Anchikovski, remarked, “We are proud to present, through our financial statements, another quarter of consistent growth in IAI’s operations and improved profitability, as the Company continues to strengthen its position and set new records that reflect its financial strength, business resilience, and ability to create long-term value. Sales volume, profitability, operating cash flow, and order backlog reflect the strength of the Company’s operations and the strong global demand for its products and solutions. We believe that the planned IPO will represent another significant milestone in the Company’s development and will further enhance its ability to expand investments in research and development, accelerate growth, and continue strengthening its production capacity and technological capabilities that will support the next generation of products.”
Net finance income in Q1 2026 totaled about USD 35 million, down from about USD 49 million in Q1 2025, a decrease of USD 14 million.
In-house research and development expenses in Q1 2026 amounted to about USD 49 million, compared with about USD 60 million in Q1 2025 (accounting for about 2% and 4% of sales, respectively), a decrease of USD 11 million.
In Q1 2026, the Company recorded net income tax expenses of about USD 61 million, compared with about USD 50 million in Q1 2025. The Company’s income is subject to the ordinary corporate income tax rate in Israel – 23%, and it is not entitled to any tax benefits pursuant to the Israeli Law for the Encouragement of Capital Investments, 1959 as it is a wholly-owned government company. The sale of any interests in the Company, even at a minuscule rate, to a non-government party will render the Company eligible for a reduced corporate income tax rate as per said Law.
The order backlog in Q1 2026 grew to about USD 32.8 billion, up from about USD 28.7 billion at the end of 2025. 74% of the order backlog is held for sale to foreign customers with wide geographical dispersal. The order backlog comprises a wide variety of projects and secures 4.4 years of operations given the current sales volumes.
Positive cash flows from operating activities in Q1 2026 amounted to about USD 932 million compared with positive cash flows from operating activities of about USD 495 million in Q1 2025.
