Elbit Systems (ESLT) Q2 2026 earnings summary

Executive summary

• Achieved double-digit growth in revenues, backlog, operating profit, and EPS for Q2 2026, with profitability margins surpassing internal targets and a record $32 billion order backlog as of June 30, 2026.

• Strong demand and new contract wins across multiple domains, especially from Europe, the U.S., and Israel, driven by ongoing conflicts and international orders.

• Significant investments in R&D and production infrastructure to support future growth and execution.

• Ranked 22nd in Defense News Global 100 Defense Companies in 2025, maintaining a strong global presence and growth culture.

Financial highlights

• Q2 2026 revenues rose 15.9% year-over-year to $2.287 billion, with backlog up 34% to $32 billion.

• GAAP gross margin improved to 25.3% (from 24%); non-GAAP gross margin at 25.6% (from 24.4%).

• GAAP operating income was $218.8 million (9.6% margin), up from $157.8 million (8% margin); non-GAAP operating income was $237.5 million (10.4% margin), up from $175.1 million (8.9% margin).

• GAAP diluted EPS increased 34% to $3.61; non-GAAP diluted EPS up 28% to $4.14.

• Free cash flow reached $150 million, up from $71 million; operating cash flow for the first six months was $517.8 million.

Outlook and guidance

• Anticipates continued backlog and revenue growth, supported by robust demand in Europe, U.S., and Asia-Pacific.

• Increased capital investment to $300 million to expand production capacity and support future growth.

• Expects mid-teens revenue growth for the third consecutive year, with strong visibility into future sales.

• Continued investment in next-generation technologies, including high-power laser systems.

• Management expects sustained demand due to geopolitical tensions and ongoing conflicts.