Research · Sep 3, 2026
[ESLT] Elbit Systems Thesis 2026: European Rearmament Becomes Primary Demand Engine for Backlog
Elbit Systems Ltd. FY25 revenue $7.94B (+16%); GAAP op income $671M (8.5% margin); non-GAAP op income $737M (9.3%); GAAP EPS $11.39 (+59%); non-GAAP EPS $12.75 (+46%). Q4 revenue $2.15B (+11%); GAAP gross margin 24.7%; non-GAAP gross margin 25.0%; non-GAAP op income $210M (9.8%); GAAP diluted EPS $3.52 (vs $2 Q4 FY24, +76%). Segment growth: C4I + cyber +19%; ISTAR + EW +39%; Land +22%; Elbit Systems of America +9%; Aerospace -14%. Geographic mix: Europe 27% (main growth engine); North America 21%; Asia-Pacific 16%; Israel 32%. Backlog $28.1B (3.5x annual revenue). Operating cash flow $778M; FCF $553M (+73%). Total debt $965M (-29% YoY) — deleveraging. Dividend +36% to $121M. FY26 capex ~$300M (factories Israel + outside) for high demand. Directed energy weapons (IMD contract) + Europe = key FY26 growth drivers. AI capabilities R&D investment continued. Risks: geopolitical concentration in Israel (32%), ITAR + export controls, customer / contract concentration, Aerospace normalization, competitive landscape, wartime demand sustainability, FX.