ELBIT SYSTEMS LTD (ESLT): Financial results for Q2 2026
ELBIT SYSTEMS LTD (ESLT) furnished an SEC Form 6-K — earnings release. Earnings Release ELBIT SYSTEMS REPORTS SECOND QUARTER 2026 RESULTS Order backlog at $32.0 billion; Revenues of $2.3 billion; GAAP net income of $173.6 million; Non-GAAP net income of $199.1 million; GAAP net EPS of $3.61; Non-GAAP net EPS of $4.14 Haifa, Israel, August 11, 2026 –
How this was made
The 30-second read
Why it matters
The earnings beat and record backlog provide a fresh catalyst for short‑term price appreciation and may influence sector sentiment.
Market read
First‑report earnings release with strong growth metrics; likely to drive immediate trading activity in ESLT and related defense stocks.
What to watch
Higher effective tax rate from OECD Pillar II and increased R&D spend may pressure margins.
Order backlog at $32.0 billion; Revenues of $2.3 billion; GAAP net income of $173.6 million; Non-GAAP net income of $199.1 million; GAAP net EPS of $3.61; Non-GAAP net EPS of $4.14
Second-quarter revenues, gross profit, operating income, net income and diluted EPS increased from the second quarter of 2025, while order backlog reached $32.0 billion and six-month operating cash flow rose to $517.8 million.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenuesGAAP | $2,287.1 million | – | – |
| GAAP gross profitGAAP | $579.0 million (25.3% of revenues) | – | – |
| Non-GAAP gross profitnon-GAAP | $586.5 million (25.6% of revenues) | – | – |
| Research and development expenses, netGAAP | $159.1 million (7.0% of revenues) | – | – |
| Marketing and selling expenses, netGAAP | $103.2 million (4.5% of revenues) | – | – |
| General and administrative expenses, netGAAP | $97.9 million (4.3% of revenues) | – | – |
| Total operating expensesGAAP | $360,213 | – | – |
| GAAP operating incomeGAAP | $218.8 million (9.6% of revenues) | – | – |
| Non-GAAP operating incomenon-GAAP | $237.5 million (10.4% of revenues) | – | – |
| Financial expenses, netGAAP | $22.0 million | – | – |
| Taxes on incomeGAAP | $32.7 million (effective tax rate of 16.4%) | – | – |
| GAAP net income attributable to the Company's shareholdersGAAP | $173.6 million (7.6% of revenues) | – | – |
| Non-GAAP net income attributable to the Company's shareholdersnon-GAAP | $199.1 million (8.7% of revenues) | – | – |
| GAAP diluted earnings per share attributable to the Company's shareholdersGAAP | $3.61 | – | – |
| Non-GAAP diluted net earnings per share attributable to the Company's shareholdersnon-GAAP | $4.14 | – | – |
| Order backlogother | $32.0 billion | – | – |
| Cash flow provided by operating activitiesGAAP | $517.8 million | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| AerospaceMainly due to a one-time unfavorable project mix and decreased sales of training and simulation systems in Europe partially offset by the increase in UAV sales in Israel. | $422.7 million | – | -8% |
| C4I and CyberMainly due to the increase in radio systems and command and control systems sales in Europe. | $241.1 million | – | 11% |
| ISTAR and EWMainly due to increased sales of airborne and land High Power Laser, Electronic Warfare and Maritime systems in Asia-Pacific. | $402.1 million | – | 22% |
| LandMainly due to ammunition and munition sales in Israel. | $749.5 million | – | 32% |
| Elbit systems of AmericaMainly due to a one-time favorable project mix and the increase in sales of Night-Vision Systems, Maritime systems and Electronic systems. | $471.7 million | – | 17% |
Capital returns
- The Board of Directors declared a dividend of $1.00 per share.
- The dividend’s record date is October 13, 2026.
- The dividend will be paid on October 26, 2026, after deduction of withholding tax, at the rate of 16.8%.
- Dividends paid were $81,771 for the six months ended June 30, 2026.
What drove it
- The order backlog as of June 30, 2026 totaled $32.0 billion, and the increase in backlog during the quarter came mainly from Europe.
- Approximately 73% of the current backlog is attributable to orders outside of Israel.
- Approximately 42% of the order backlog is scheduled to be performed during the remainder of 2026 and 2027.
- The cash flow in the second quarter of 2026 was affected mainly by the strong increase in net income and an increase in contract liabilities.
- The Company implemented the new R&D Law for the first time and recognized a cumulative year-to-date impact of approximately $40 million.
- The Company announced a contract valued at approximately $350 million to deliver upgrades for Main Battle Tanks, to be performed over a period of four years.
- Elbit Systems of America, LLC received multiple awards from U.S. Customs and Border Protection totaling over $370 million, with work to be performed through May 2029.
Concerns
- Taxes on income were $32.7 million with an effective tax rate of 16.4%, compared with $7.1 million and an effective tax rate of 5.6%, mainly driven by the implementation of the OECD Pillar II global minimum tax rules.
- Aerospace revenues decreased by 8%, mainly due to a one-time unfavorable project mix and decreased sales of training and simulation systems in Europe.
- Operations have experienced disruptions due to supply chain and operational constraints, including increased transportation costs, delays, material and component shortages and elevated prices, employee reserve-duty call-ups, limitations imposed by some countries on engagement with Israel, and attacks on global facilities.
- The Company stated that operational effects from the conflicts had been reduced following ceasefire agreements, but could increase again depending on future developments.
What to watch
- Conversion of the $32.0 billion order backlog into revenue and earnings growth.
- Execution and capital investments in production infrastructure intended to increase capacity and support delivery at scale.
- Demand from the Israel Ministry of Defense, which the Company said had experienced a continued material increase compared with levels prior to the war.
- The duration and scope of Middle East conflicts, the continuity and stability of ceasefire arrangements, and related supply-chain and operational effects.
- The effect of the OECD Pillar II global minimum tax rules and the R&D Law on taxes and reported results.
Balance sheet and cash flow
- Cash and cash equivalents were $255,336 as of June 30, 2026, compared with $635,141 as of December 31, 2025. (US Dollars in thousands)
- Short-term bank deposits were $707,599 as of June 30, 2026, compared with $180,604 as of December 31, 2025. (US Dollars in thousands)
- Short-term bank credit and loans were $— as of June 30, 2026, compared with $50,532 as of December 31, 2025. (US Dollars in thousands)
- Long-term loans, net of current maturities were $4,592 as of June 30, 2026, compared with $18,000 as of December 31, 2025. (US Dollars in thousands)
- Series B, C and D Notes, net of current maturities were $175,384 as of June 30, 2026, compared with $237,625 as of December 31, 2025. (US Dollars in thousands)
- Net cash provided by operating activities was $517,782 for the six months ended June 30, 2026, compared with $303,970 for the six months ended June 30, 2025. (US Dollars in thousands)
- Purchase of property, plant and equipment and other assets, net of investment grants and evacuation grants was $(157,557) for the six months ended June 30, 2026, compared with $(72,474) for the six months ended June 30, 2025. (US Dollars in thousands)
- Net cash used in investing activities was $(691,484) for the six months ended June 30, 2026, compared with $(810,358) for the six months ended June 30, 2025. (US Dollars in thousands)
- Net cash used in financing activities was $(206,103) for the six months ended June 30, 2026, compared with net cash provided by financing activities of $350,149 for the six months ended June 30, 2025. (US Dollars in thousands)
Analysis
Elbit Systems reported a stronger second quarter of 2026. Revenues were $2,287.1 million, compared with $1,972.7 million in the second quarter of 2025. GAAP gross profit was $579.0 million, or 25.3% of revenues, compared with $472.9 million, or 24.0% of revenues. GAAP operating income rose to $218.8 million, or 9.6% of revenues, from $157.8 million, or 8.0% of revenues. Non-GAAP operating income was $237.5 million, or 10.4% of revenues, compared with $175.1 million, or 8.9% of revenues.
Growth was broad across four of the five reported segments. Land revenue was $749.5 million and increased 32%, mainly due to ammunition and munition sales in Israel. ISTAR and EW revenue was $402.1 million and increased 22%, driven by airborne and land High Power Laser, Electronic Warfare and Maritime systems in Asia-Pacific. C4I and Cyber revenue was $241.1 million and increased 11%, while Elbit systems of America revenue was $471.7 million and increased 17%, with the latter benefiting from a one-time favorable project mix. Aerospace revenue was $422.7 million and decreased 8%, reflecting a one-time unfavorable project mix and lower training and simulation systems sales in Europe, partly offset by UAV sales in Israel.
GAAP net income attributable to shareholders was $173.6 million, or 7.6% of revenues, compared with $125.7 million, or 6.4% of revenues. GAAP diluted EPS was $3.61 compared with $2.69. Non-GAAP net income attributable to shareholders was $199.1 million, or 8.7% of revenues, and non-GAAP diluted EPS was $4.14, compared with $151.0 million, or 7.7% of revenues, and $3.23, respectively. Financial expenses declined to $22.0 million from $31.2 million, mainly due to a reduction in average debt. Tax expense increased to $32.7 million from $7.1 million, with the effective tax rate rising to 16.4% from 5.6%, mainly because of OECD Pillar II global minimum tax rules.
Backlog reached $32.0 billion as of June 30, 2026, with the quarterly increase mainly from Europe. Approximately 73% of backlog was attributable to orders outside Israel, and approximately 42% was scheduled for performance during the remainder of 2026 and 2027. Cash flow provided by operating activities for the six months ended June 30, 2026 was $517.8 million, compared with $304.0 million in the prior-year period, affected mainly by higher net income and increased contract liabilities. The Company increased capital investment, with purchase of property, plant and equipment and other assets of $(157,557) for the six-month period, and declared a $1.00 per-share dividend.
The release provided no financial outlook. Management emphasized continued investment in R&D and production infrastructure to scale capacity and convert backlog into revenue and earnings growth. The report also identifies execution risks from Middle East conflicts, including transportation costs, component shortages, supply-chain disruptions, workforce call-ups, engagement limitations in some countries, and attacks on certain global facilities. The Company said these effects had been reduced following ceasefire agreements but could increase again depending on future developments.
Management, verbatim
The strong momentum in the second quarter was sustained, delivering double-digit growth in sales, backlog and earnings per share, improved profitability, and strong cash flow generation.
Bezhalel (Butzi) Machlis, President and CEO of Elbit Systems
Our backlog reached a new record of $32 billion, providing long-term visibility and demonstrating the continued confidence of customers worldwide in Elbit Systems’ technologies and capabilities.
Bezhalel (Butzi) Machlis, President and CEO of Elbit Systems
Not in the filing
stated, not guessed- Forward financial guidance
- Previous-release outlook for comparison
- Free cash flow
- Quarterly cash flow from operating activities
- Share repurchases
- Prior-quarter comparisons for reported metrics
- Percentage changes for total revenue, gross profit, operating income, net income and EPS
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Elbit Systems is a leading Israeli defense technology firm listed on NASDAQ (ESLT). The Q2 2026 filing is its first public disclosure of the quarter's results.
Ticker impact
Elbit Systems reported Q2 2026 results with $2.3B revenue, $173.6M GAAP net income and a $32B order backlog.
Potential price rally on earnings beat and backlog growth.
Quarterly numbers exceed prior year, EPS up ~34%, and backlog at record levels indicate higher future revenue.
Market effects
Defense and aerospace sector may see broader buying pressure.
European and Asia‑Pacific defense contractors could benefit from similar backlog trends.
Elevated interest in defense spending globally may lift related equities.
Counterpoint
If the backlog is heavily weighted to uncertain geopolitical regions, execution risk could temper upside.
Key entities
- ExecutiveBezhalel (Butzi) Machlis
President and CEO of Elbit Systems, provided commentary on the results.
