Revenue 2025
$7.94B
+16.3% Y/Y | 5-year high
Diluted EPS 2025
$11.39
2023: $4.82 (+141%)
Net Income 2025
$534M
2024: $321M (+66%)
Operating Margin 2025
8.5%
2023: 6.2% (+2.3pp)
FCF 2025
$553M
2023: ($73M) — inflection
R&D 2025
$517M
6.5% of revenue
Market Cap
$37.5B
NASDAQ + TASE | Apr 2026
P/E Ratio
68.7
TTM | Forward P/E: 56.6
EV/EBITDA
43.8
EBITDA: $859M (TTM)
Net Debt
$149M
Debt $965M − Cash+ST $816M
Gross Margin
24.4%
2025 | Gross Profit $1.94B
1 Company Profile
Elbit Systems is Israel’s largest defence company, founded in 1966, traded on NASDAQ and on the Tel Aviv Stock Exchange, and a constituent of the TA-35 index. Headquartered in Haifa, it operates in more than 50 countries with subsidiaries in the US (Elbit Systems of America), the UK, Germany and others. Elbit is regarded as the flagship of Israel’s publicly traded defence industry — a large private-sector defence company by global standards (as opposed to state-owned Rafael and IAI), while at the same time listed on NASDAQ with global capital-market accessibility. The portfolio spans land, air and naval systems, C4ISR, cyber, and training services.
| Segment | Description |
|---|
| Aerospace | Aircraft, UAVs, precision munitions, simulators |
| C4I and Cyber | Communications, cyber, autonomous solutions |
| ISTAR and EW | Electro-optics, electronic warfare, naval systems |
| Land | Armored vehicles, artillery, ammunition, defense systems |
| ESA (USA) | US operations — Elbit Systems of America |
Source: Form 20-F FY2025
2 Key Financial Observations
This summary is not a recommendation. It is a factual list of key financial metrics.
Performance — 5 Years ($M)
| Year | Revenue | Net Profit | Operating Margin |
|---|
| 2021 | 5,279 | 274 | 7.9% |
| 2022 | 5,512 | 275 | 6.7% |
| 2023 | 5,975 | 215 | 6.2% |
| 2024 | 6,828 | 321 | 7.2% |
| 2025 | 7,939 | 534 | 8.5% |
Operating Expenses 2025 ($M)
| Expense | 2025 | 2024 | % Revenue |
|---|
| R&D | 517 | 466 | 6.5% |
| Sales & Marketing | 399 | 375 | 5.0% |
| General & Administrative | 347 | 311 | 4.4% |
| FCF (total) | 553 | — | — |
| Debt Repayment | 496 | — | — |
| Dividends | 124 | 100 | — |
Missing data: Full geographic backlog breakdown, precise net debt, standalone EBITDA, revenue split by segment and year.
Net Profit — 5 Years ($M)
Operating Margin — Trend (%)
Diluted EPS — 5 Years ($)
3 Industry & Competitive Context
Defense and defense electronics — a non-cyclical market, stable government defense budgets, long-term contracts. Concentrated market structure — dominated by a small number of approved players in each country. Global rise in defense budgets driven by Ukraine, tensions in Taiwan, and the Israel war.
| Competitor | Domain | Key Distinction |
|---|
| Rafael | Weapon and defense systems (Iron Dome) | Israeli state-owned company — partner and competitor |
| IAI | UAVs, space, naval systems | Israeli state-owned company |
| L3Harris | Defense electronics | Major US competitor |
| Northrop Grumman | Defense and intelligence systems | Broad access to Pentagon budget |
| BAE Systems | Armored vehicles, electronics | UK competitor |
| Thales | C4I, electro-optics | French competitor |
4 Risk Factors
| Risk | Context |
|---|
| Defense budget dependency | Most revenue comes from governments. A change in defense policy of a major country (Israel, USA, NATO) will affect directly |
| Israeli customer concentration | The State of Israel is a dominant customer. A budgetary crisis would have a major impact |
| Geopolitical risk | Export restrictions or sanctions can block markets. High sensitivity to international sentiment toward Israel |
| Low tax rate 2025 (9.9%) | If it is a one-off, 2026 net income will show normalization downward even if operations remain the same |
| Ownership concentration (Federmann 41.6%) | Family structure raises corporate governance questions |
| Two-way operating leverage | The same leverage that doubled profit will operate in reverse if revenues slow — operating margins may fall back to 6-7% |
| US competition | L3Harris, Northrop Grumman with vast resources and access to DOD budget |
5 Analytical Lens — The Questions We Ask
In professional company analysis, the question is not "is this good?" but rather "through which lenses must this company be examined so that we do not miss what matters most?" At Bakshi Finance, every analysis passes through six lenses. The text below is not an assessment — it is the mapping of the questions this analysis is meant to answer.
This framework is intended to structure analysis, not to produce an investment conclusion.
Growth
Revenue accelerated from CAGR ~5% (2021-2023) to +14-16% (2024-2025). How much of the growth is healthy organic (new contracts) versus a reaction to the Israel-conflict (one-shot)? How does the 3-5 year backlog look? What is the geographic distribution of new contracts?
Profitability
Operating margins jumped from 6.2% to 8.5% in two years. How much is operating leverage on a fixed cost base (temporary) and how much is structural (product mix, efficiency)? What is the reasonable ceiling?
Leverage
Debt repayment of $496M in 2025 — aggressive. What is the remaining debt and Debt/EBITDA ratio? How is the debt structure exposed to rate increases? Can the company continue investing in R&D while reducing debt simultaneously?
Competitive Position
Elbit is a globally leading defence company in certain domains (UAVs, electro-optics). What is the actual technological differentiation versus IAI and Rafael domestically? How does it compete against L3Harris/Northrop in global deals?
Management Quality
2024-2025 execution has been impressive. How much of the results reflect management versus macro tailwinds? How does the Federmann family (41.6%) influence decisions? Is there succession-planning risk?
Business Complexity / Risk
Elbit operates in five segments, 50+ countries, varied export regulations. How to treat Israeli exposure on one hand, and growing US activity (ESA) on the other? What is the USD/ILS sensitivity?
6 Scenario Framework
Scenarios are descriptive, not predictive. They outline possible conditions, not expected outcomes.
These scenarios carry no probability assessment, no preferred direction, and no expectation regarding which, if any, will materialise.
Constructive Scenario — if the following conditions hold:
Global defence budgets continue to rise (US, NATO, Asia), backlog continues to grow, additional European countries purchase Elbit systems (precision munitions, UAVs), the normalising tax rate is sustained in a favourable way, and operating margins stabilise around 9-10%. Under these conditions, EPS continues to grow double-digit and the dividend rises.
Base Scenario — if current trends continue:
Israeli defence spending stabilises at a high level (no longer rising), global growth at 7-10% annually, operating margins remain around 8-9%, tax rate reverts to a normal 15-18%. Net income grows at a high single-digit pace.
Adverse Scenario — if the following risks materialise:
A Middle East settlement rapidly reduces Israeli demand, diplomatic pressure on European countries cuts procurement from Israel, the tax rate normalises (15-18%) and compresses profit, or negative operating leverage compresses margins. Under these conditions, EPS may fall back toward $7-8.
Scenarios describe conditions, not forecasts. There is no preferred direction and no probability assessment expressed in this framework.
7 How to Think About This Company
Elbit is not a typical defence company — over the past two years it has transformed from a modest-growth story into a profit-doubling story. EPS rose 141% between 2023 and 2025, operating profit doubled, operating margins improved by 2.3 percentage points. This is unusual in a defensive industry under normal circumstances. This transformation is the source of both the upside and the risk — upside, because the company demonstrated exceptional execution under pressure; risk, because part of the improvement may be a one-off reflection of the Israel-conflict rather than structural. The real question in analysing Elbit is not "is the growth real" (it is), but rather "how much of it will sustain once the Israeli security situation stabilises?"
The critical variables to monitor are three. First, backlog composition. 2025 revenue reflects execution of contracts signed in 2022-2024. 2026-2027 growth depends on contracts signed now. If backlog continues to grow and is geographically diversified (not only Israel), growth will persist. Second, the tax rate. 9.9% in 2025 is exceptional; a normal rate is 15-18%. If 2026 sees tax reverting, net income faces 6-9% pressure even if operations hold steady. The market may read this as real deceleration. Third, operating margins. The improvement from 6.2% to 8.5% is mostly operating leverage. The question is whether it stabilises, continues, or reverses if growth slows.
Where the analysis may go wrong. First error — treating the 14-16% growth rate as run-rate. This is an exceptional pace for a defence company, and in Elbit’s history (CAGR 2021-2023 = ~5%) it is not the standard. More likely, long-term growth is 7-10%. Second error — treating $534M net income as clean. A 9.9% tax rate added ~$40-50M above normal; some operating profit is the result of a cost base that has not caught up with the new sales pace. Third error — treating Elbit as a "US defence equity" (like Lockheed or RTX). It shares business characteristics, but it is an Israeli company with unique exposure to the local security situation, different export regulations, and international sentiment.
What distinguishes professional analysis of Elbit from headlines. Headlines on Elbit speak of "record profit" or "the war pushed the stock". Professional analysis addresses three things: (a) the ratio of organic-structural growth to war-driven growth — and how long it will take to clarify; (b) net-income sensitivity to a normal tax rate — every 5% rise in tax rate is worth ~$30M less profit; (c) the scenario of reversion to normal — whether the company grew its recurring revenue base enough to avoid falling back to 2023 levels, or whether it is a temporary lift. These are not what one buys or sells — they are what one asks before deciding.
The difference between surface-level analysis and professional thinking often lies in the variables that are not immediately visible.
The difference between surface-level analysis and professional thinking often lies in the variables that are not immediately visible.
8 Sources & Data
| # | Source | Date | Type |
|---|
| 1 | SEC EDGAR — Form 20-F FY2025 | March 2026 | Official — SEC |
| 2 | SEC EDGAR — Form 20-F FY2023 | March 2024 | Official — SEC |
| 3 | elbitsystems.com — IR | Quarterly | Official — company website |
| 4 | maya.tase.co.il — Company details (Elbit) | April 2026 | Official — Stock Exchange |
| 5 | NASDAQ.com — ESLT quote | April 2026 | Official — Stock Exchange |
| 6 | stockanalysis.com — Multiples | April 2026 | Secondary |
Missing: Backlog geographic breakdown, precise net debt, standalone EBITDA, revenue split by segment and year.
