Elbit Systems Reports Record Orders and Profit Growth Despite Stock Drop

Elbit Systems closed the second quarter of 2026 with a record backlog of $32 billion, up $8.2 billion from the same quarter last year, reflecting sustained demand for its defense systems globally, especially in Europe. About 73% of the backlog is from outside Israel, and 42% is expected to convert into revenue by the end of 2026 and during 2027. The company’s second-quarter revenues rose 16% year-over-year to approximately $2.3 billion, while net profit attributable to shareholders surged 38% to $173.6 million.

Despite these strong financial results, Elbit’s stock fell 9.4% on the Tel Aviv Stock Exchange, where it was valued at 121 billion shekels before the trading day. Market analysts attributed the decline to investors taking profits after the stock’s roughly 60% rise over the past year and more than 30% increase since the start of 2026. Analyst Ilia Feiner from Leader Capital Markets suggested the market reaction might be overly harsh, noting the company’s backlog growth supports expectations for continued revenue increases and long-term growth.

The ongoing conflict in Israel, approaching its third anniversary, continues to impact Elbit’s business, with the company’s land systems division seeing a 32% revenue increase due to higher sales of munitions such as tank and artillery shells. Domestic revenues accounted for $855 million, or 37.4% of total quarterly revenues, up from 34% the previous year. To meet rising demand, Elbit has accelerated production capacity expansions at its sites worldwide, investing over $157 million in manufacturing infrastructure since the start of the year, double the prior year’s investment.

Elbit’s CEO, Bezalel (Butzi) Mualem, emphasized that these investments aim to convert the backlog into sustainable growth and revenues. The company also hired hundreds of new employees this year. Operating profit increased 39% to $218.8 million, with operating margin improving from 8% to 9.6%. Cash flow from operations in the first half of 2026 reached $517.8 million, compared to $304 million in the same period last year.

Elbit is advancing development of high-power laser and directed energy systems, including an airborne laser system for helicopters and fighter jets, which has attracted international interest and is expected to be operational soon. Mualem also acknowledged that the Israeli Ministry of Defense owes Elbit a significant and growing debt, hoping for a resolution soon. Reports indicate the Ministry owes over 15.5 billion shekels to Israel’s three largest defense companies: Elbit, Israel Aerospace Industries, and Rafael.