Elbit Systems Hits Record $32 Billion Order Backlog Amid Global Security Tensions

Elbit Systems, the Israeli defense electronics company known for manufacturing Hermes drones, munitions, and intelligence systems, reported a record-breaking quarter driven by ongoing global conflicts and regional tensions. In the second quarter of 2024, Elbit's sales rose 16% to $2.3 billion, positioning the company for annual sales of approximately $9 billion. Net profit surged 40% to $173.6 million. The company's order backlog reached an all-time high of $32 billion, up 33% from $23.8 billion a year earlier.

Sales to the Israeli Ministry of Defense accounted for 37% of activity, including weapons, drones, and intelligence systems. Communications and cyber systems sales increased by about 11%, mainly due to higher sales of radio and command-and-control systems in Europe. Intelligence and laser systems sales grew roughly 22%, driven by increased sales of high-power laser, electronic warfare, and naval systems in the Asia-Pacific region. Land systems sales rose by approximately 32%, supported by munitions and ammunition sales in Israel. However, drone sales declined by about 8%, attributed to a negative one-time project mix and reduced sales of training and simulator systems in Europe, partially offset by growth in unmanned aircraft sales in Israel.

Elbit CEO Bezalel (Butzi) Machlis highlighted that most new orders come from abroad, reflecting strong demand for their products. He emphasized the introduction of airborne laser systems for combat aircraft and helicopters designed to counter drone swarms, which have attracted significant interest. The company continues to expand deliveries of high-power lasers to the Israeli Ministry of Defense and Rafael Advanced Defense Systems, employing hundreds of engineers in this effort.

Addressing reports of a container being held at a port as part of a boycott against Israel, Machlis stated the company is investigating the incident but noted occasional delays in shipments for various reasons. He confirmed no supply chain issues, citing investments in raw material inventories and supplier diversification since the COVID-19 pandemic. Regarding the outstanding debt from the Israeli Ministry of Defense, Machlis acknowledged it is still growing but expressed confidence in eventual repayment, supported by foreign revenues that enable Elbit to continue supplying the IDF and accelerate delivery schedules. Dialogues with defense and finance ministries are ongoing about the debt.