Israel Aerospace Industries (IAI) reported on Wednesday record financial results for 2025, as rising global demand for advanced defense systems and aerospace technology boosted sales, profits and the company’s order backlog.
The state-owned defense and aerospace manufacturer said that annual revenue rose 21% to $7.38 billion, up from $6.11 billion in 2024. Net income climbed 45% to $712 million, the highest in the company’s history.
IAI also reported strong growth in profitability. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) increased 37% to $1.08 billion, while gross profit rose to $1.43 billion, up from $1.14 billion a year earlier. Operating income climbed 51% to $751 million, reflecting improved margins across the company’s divisions.
The company’s order backlog reached nearly $29 billion by the end of 2025, up from $25 billion the previous year and equivalent to roughly four years of work at current production levels. About 71% of the backlog comes from international customers, highlighting the company’s strong export demand.
IAI chief executive Boaz Levy said the results were achieved during a period of ongoing security challenges for Israel.
“A highly complex security reality marked the year 2025 for the State of Israel—a reality that continues to compel us,” Levy said. “Even today, as the country remains engaged in security operations across various fronts, IAI is proud to stand at the forefront, supporting the defense establishment and strengthening Israel’s position as a technological powerhouse on the international stage.”
Levy added that the company’s results reflected both rising global demand for advanced defense systems and continued confidence from international customers.
“These excellent results are a direct testament to IAI’s engineering and technological capabilities and to the dedication of the thousands of employees who work with professionalism, responsibility, and a deep sense of mission—day and night, even during these turbulent times,” he said.
Growth driven by defense systems
Much of the growth came from IAI’s military divisions, including its Systems, Missiles & Space Group and the ELTA radar and electronics unit. Sales in the company’s military businesses rose 23% to $6.4 billion, compared with $5.19 billion the previous year.
The company’s aviation division—which focuses on aircraft maintenance, conversion and upgrades—also expanded, with sales increasing 9% to $1.61 billion.
Exports accounted for the majority of revenue. International sales totaled $4.88 billion, or 66% of overall revenue, while $2.5 billion came from the Israeli market.
Strong cash flow and continued investment
IAI reported positive operating cash flow of about $612 million in 2025 and said it currently holds roughly $4 billion in free cash flow. The company invested $318 million in internal research and development, slightly lower than the previous year but still representing about 4% of total sales.
Net financial income rose to $172 million, while the company paid $204 million in taxes during the year.
The final quarter of 2025 also showed significant growth. Fourth-quarter sales reached $2.25 billion, up 31% from $1.72 billion in the same period of 2024.
Net income for the quarter jumped to $228 million, compared with $77 million a year earlier, while operating income rose to $262 million, nearly four times the level reported in the fourth quarter of 2024.
Global demand for defense technology
IAI’s results reflect a broader surge in demand for defense technology as geopolitical tensions and regional conflicts drive military spending worldwide. The company produces a range of systems including missile defense technologies, unmanned aerial vehicles, radar systems and satellite technologies.
Levy said the company will continue investing in advanced technologies while working closely with Israel’s defense establishment and international customers.
“Our deep, longstanding strategic partnership with the defense establishment and the IDF enables us to continue developing advanced technological solutions that provide Israel with a competitive advantage on the battlefield and ensure the protection of the country’s citizens,” he said.
Looking ahead, the company said it plans to continue expanding its global operations while investing in innovation and new technologies aimed at addressing future security challenges.