Elbit Systems Q1 2025: Unpacking Contradictions in Export Revenue and Market Demand

Export Revenue Trends and Growth Expectations, Export Revenue Share and Breakdown, Iron Beam system deployment timeline, European Sales and Market Demand, and International Revenue vs. Israeli Revenue are the key contradictions discussed in Elbit Systems' latest 2025Q1 earnings call.



Revenue and Backlog Growth:
- Elbit Systems reported record revenue of $1.896 billion for Q1 2025, up 22% year-over-year.
- This growth was driven by high demand across all key geographies, including increased precision-guided munition sales and strong performance in its Land division.

Operating Income and Margin Expansion:
- Elbit's non-GAAP operating income was $165.1 million, or 8.7% of revenues, compared to $121.6 million, or 7.8% of revenues in the previous year.
- The increase in operating income was attributed to strong revenue growth and margin expansion across various segments.

Strong Free Cash Flow:
- The company generated free cash flow of $161 million in Q1 2025.
- This was primarily due to increased net income, strong contract liabilities, and a one-time payment from the Israeli Land Authority.

Backlog and Geographical Exposure:
- Elbit's order backlog reached $23.1 billion, up 40% from the previous year.
- Approximately 66% of the backlog is attributable to orders from outside of Israel, with strong exposure to Europe, North America, Asia Pacific, and Israel.

Defense Spending and Conflict Impact:
- Elbit's strong performance is partially attributed to ongoing conflicts and increased defense spending, particularly in Israel and Europe.
- The ongoing conflicts, such as the one in Ukraine, have driven demand for Elbit's advanced technological solutions.