Elbit Systems reported a sharp rise in second-quarter profit and a record $32 billion order backlog, underscoring continued global demand for the Israeli defense company’s systems even as its shares plunged 9.4% in Tel Aviv trading.
The company posted net profit of $173 million in the second quarter of 2026, up 38% from the same period a year earlier. Its order backlog climbed 26% from $23.8 billion to a new record of $32 billion, with 42% of those orders expected to be executed by the end of 2027, giving the company substantial visibility into future revenue.
Elbit's Hermes 900 drone
(Photo: Elbit Systems)
Despite the strong results, Elbit’s market value fell by roughly NIS 10 billion during Wednesday’s trading session. The decline was not attributed to weak operating performance. Market estimates instead pointed to profit-taking after an exceptional run in the stock, which has climbed 206% over the past three years amid rising geopolitical tensions and surging demand for defense systems worldwide.
A similar pattern was seen at Israeli defense technology company NextVision, which published results a day earlier showing a 138% jump in second-quarter revenue, only for its shares to fall about 7% in Tel Aviv.
IDF demand drives sales higher
Elbit’s quarterly sales reached $2.3 billion, up 16% from the previous quarter. Export sales accounted for 37% of total revenue, compared with 32% in the same quarter last year, reaching $1.4 billion. Sales in the United States increased 17%.
In Israel, growth was led by Elbit’s land systems division, where sales jumped 32%, mainly due to ammunition sales to the IDF. The company’s electronic warfare and intelligence segments each posted growth of 22%.
Elbit also beat analyst expectations. Analysts had forecast earnings of $3.70 per share, while the company reported $4.14 per share. Operating profit reached 10.4% of sales, above the 10.1% forecast, while operating cash flow totaled $150 million.
The improvement in profitability came despite a sharp rise in the company’s tax burden, with its effective tax rate rising from 5.6% in the comparable quarter to 16.4%.
Elbit President and CEO Bezhalel “Butzi” Machlis said the company continues to see elevated demand despite calls in some countries to boycott Israeli weapons systems.
“We have learned to overcome all the noise. Demand is increasing,” Machlis said.
He said that since the outbreak of the war, Elbit has experienced a significant and sustained increase in demand compared with prewar levels, a trend he believes could continue and generate additional major orders.
“The growth trend continued in the second quarter and led to double-digit increases in sales, backlog and earnings per share, improved profitability and strong cash flow generation,” Machlis said.
He added that the record backlog reflects Elbit’s long-term resilience and continued confidence among customers around the world in the company’s technologies and capabilities.
Elbit is continuing to invest in research and development as well as manufacturing infrastructure in an effort to expand production capacity and improve its ability to convert the growing backlog into revenue.
Machlis also highlighted Elbit’s work on the next generation of high-power laser and directed-energy systems. The company recently unveiled an airborne high-power laser system currently under development for use on helicopters and fighter aircraft.