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.

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

• Significant new contracts and awards in the U.S., Europe, and Israel, including sole supplier status for key U.S. Army programs and major European modernization projects.

• Continued investment in R&D, AI, robotics, and production capacity to support future growth and backlog conversion.

• Strong demand, especially from Israel and Europe, due to ongoing conflicts and global security concerns.

Financial highlights

• Q2 2026 revenues rose 15.9% year-over-year to $2.287 billion, with LTM revenues at $8.5 billion.

• GAAP gross margin improved to 25.3% (from 24%), and non-GAAP gross margin to 25.6% (from 24.4%) year-over-year.

• GAAP operating income was $218.8 million (9.6% margin), up from $157.8 million (8% margin) in Q2 2025; non-GAAP operating profit was $237 million, up 36% year-over-year.

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

• Free cash flow for Q2 2026 was $150 million, up from $71 million in Q2 2025; operating cash flow for the first six months was $517.8 million.

Outlook and guidance

• Strong demand and a robust backlog provide extended visibility and confidence in continued mid-teens revenue growth.

• Ongoing investments in capacity, robotics, and AI expected to support backlog conversion and future growth.

• Customers increasingly willing to fund CapEx directly, accelerating capacity expansion and backlog conversion.

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