Elbit Systems Reports Record Order Backlog and Rising Sales to Israel Amid Growing Defense Ministry Debt

Elbit Systems closed the second quarter of 2026 with a record order backlog of $32 billion, reflecting strong global and domestic demand for its defense systems. The company, led by CEO Bezhalel (Buzzy) Machlis and controlled by Miki Federman, reported revenues of $2.3 billion for the quarter, a 16% increase year-over-year, while net profit rose 38% to $173.6 million. About 73% of the backlog is from international customers, with most growth coming from Europe. Elbit expects 42% of current orders to be fulfilled by the end of 2026 and through 2027.

The ongoing conflict in Israel, approaching its third anniversary, continues to impact Elbit’s business, with its land systems division seeing a 32% revenue jump due to increased sales of various munitions to the Israeli Defense Forces. Domestic revenues reached $855 million, representing 37.4% of total quarterly sales, up from 34% the previous year. To meet rising demand, Elbit has accelerated production capacity expansion at its facilities worldwide, investing over $157 million in manufacturing infrastructure since the start of the year, double the amount invested in the same period last year.

Machlis emphasized that these investments aim to improve output, increase production capacity, and convert the large order backlog into sustainable revenue growth. The company also hired hundreds of new employees in 2026. Operating profit rose 39% to $218.8 million, with operating margins improving from 8% to 9.6%. Cash flow from operations in the first half of the year totaled $517.8 million, up from $304 million a year earlier.

Elbit is advancing development of high-powered laser and directed energy systems, including an airborne laser system for helicopters and fighter jets, which has attracted significant international interest. Machlis noted that hundreds of engineers are working on these projects, with operational deployment expected soon, though he declined to specify exact timelines.

Regarding the Israeli Defense Ministry’s outstanding debt, Machlis confirmed it remains substantial and growing, without specifying the amount. He expressed hope for a resolution soon to enable repayment. Recent reports indicate the Defense Ministry owes over 15.5 billion shekels to Israel’s three largest defense companies: Elbit, Rafael, and Israel Aerospace Industries. The payment delays stem from ongoing budget disputes between the Defense Ministry and the Finance Ministry over the 2026 defense budget.