Israel Aerospace Industries Reports Record Profits and Nears IPO Launch

Israel Aerospace Industries (IAI) announced its highest-ever financial results, with net profit soaring 40% to $449 million in the first half of the year, compared to $320 million in the same period last year. In the second quarter alone, net profit jumped 47% to $229 million from $156 million a year earlier. The company's order backlog reached an all-time high of $35 billion, up from $27 billion in the previous quarter. Sales also surged by 33% to $4.275 billion in the first half, with second-quarter sales hitting $2.189 billion versus $1.618 billion in the prior year quarter.

The missile and space division, which produces the Arrow missile, led sales surpassing $1 billion for the first time with a 38% increase. It was followed by Elta Systems, specializing in electronic warfare, and the aviation and military aircraft divisions. All four divisions are profitable, and the company reported a 35% rise in operating profit for the first half. Export sales accounted for 66% of total revenue, with the remaining 34% from the domestic defense market. CEO Boaz Levy highlighted the company’s compliance with Ministry of Defense requirements, enabling strong workforce retention, and noted IAI ranks second among Israel’s best employers after Nvidia.

Levy emphasized IAI’s reduced dependency on suppliers from France and Spain, developing "blue and white" solutions to supply chain challenges, though raw material procurement remains difficult. Regarding the anticipated IPO, Levy said progress is "closer than ever," with significant advances made with the Defense Ministry, including agreements on confidentiality orders to protect classified deal details. Discussions with the Securities Authority are ongoing, with final wording being prepared before a meeting with the Finance Ministry to finalize the division of proceeds between the state and the company. The IPO is expected on the Tel Aviv Stock Exchange, with IAI planning to offer about 20% of its shares. The company’s valuation will be updated based on the strong second-quarter results, previously estimated at around $20 billion.

Levy also mentioned a successful recent test of the Arrow missile, enhancing defense against ballistic missile threats from Iran and potentially opening new international markets for IAI.