• Revenue: Fourth-quarter 2024 revenue increased by 19% to $1.930 billion; full-year 2024 revenue increased by 14% to $6.828 billion.
• Segment Revenue Growth: Aerospace revenue increased by 27%; C4I and Cyber by 7%; ISTAR and EW by 8%; Land by 29%; Elbit Systems South America by 6%.
• Non-GAAP Gross Margin: Fourth-quarter 2024 at 24.5%; full-year 2024 at 24.5%.
• GAAP Gross Margin: Fourth-quarter 2024 at 24.1%; full-year 2024 at 24%.
• Non-GAAP Operating Income: Fourth-quarter 2024 at $157.5 million or 8.2% of revenues; full-year 2024 at $550 million or 8.1% of revenues.
• GAAP Operating Income: Fourth-quarter 2024 at $141.4 million or 7.3% of revenues; full-year 2024 at $489 million or 7.2% of revenues.
• Net R&D Expenses: $456 million or 6.8% of revenues in 2024.
• Marketing and Selling Expenses: $375 million or 5.5% of revenues in 2024.
• G&A Expenses: $311 million or 4.6% of revenues in 2024.
• Financial Expenses: $151 million in 2024.
• Effective Tax Rate: 11.4% in 2024.
• Non-GAAP Diluted EPS: $2.66 in Q4 2024; $8.76 for full-year 2024.
• GAAP Diluted EPS: $2 in Q4 2024; $7.18 for full-year 2024.
• Backlog of Orders: $22.6 billion as of December 31, 2024.
• Net Cash Flow from Operating Activities: $535 million for the year ended December 31, 2024.
• Free Cash Flow: $320 million delivered in 2024.
• Dividend: $0.60 per share declared by the Board of Directors.

• Warning! GuruFocus has detected 9 Warning Signs with ESLT.

Release Date: March 18, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Elbit Systems Ltd (NASDAQ:ESLT) reported a 19% increase in fourth-quarter revenues, reaching $1.930 billion compared to $1.626 billion in the same quarter of 2023.
• The company's backlog of orders reached a record $22.6 billion, with 65% generated from outside Israel, indicating strong international demand.
• Elbit Systems Ltd (NASDAQ:ESLT) achieved a non-GAAP diluted EPS of $2.66 in Q4 2024, a significant increase from $1.56 in Q4 2023.
• Free cash flow generation was strong at $320 million for 2024, supported by $535 million in net cash flow from operating activities.
• The company continues to expand its production capacity, with new facilities in Israel and Europe, to meet growing demand for its products and solutions.

Negative Points

• The non-GAAP gross margin for the fourth quarter decreased to 24.5% from 25.3% in Q4 2023, indicating a slight decline in profitability.
• GAAP gross margin for the full year 2024 was 24%, down from 24.8% in 2023, reflecting ongoing margin pressures.
• Financial expenses increased to $151 million in 2024 from $137 million in 2023, primarily due to factoring expenses.
• The effective tax rate rose to 11.4% in 2024 from 10.1% in 2023, impacting net income.
• Marketing and selling expenses increased to $375 million in 2024, up from $359 million in 2023, which could pressure operating margins.

Q & A Highlights

Q: Congrats on the quarter. Can you explain the drivers behind the strong free cash flow performance? A: Yaacov Kagan, CFO, explained that the company achieved $535 million in operational cash flow, significantly better than previous years, with $320 million in free cash flow. This was driven by contract liabilities, alongside an expansion in inventories and receivables.

Q: Can you confirm the export revenue figures and explain how Elbit managed high exports during a time of conflict? A: Yaacov Kagan, CFO, confirmed export revenues were $4.8 billion, with Israeli revenues close to $2 billion. Bezhalel Machlis, CEO, highlighted Elbit's global subsidiaries and workforce, which allowed them to support both local and international customers, demonstrating the company's resilience and strategic advantage.

Q: Is the $4.8 billion export revenue a record high for Elbit, and do you see potential for future growth? A: Bezhalel Machlis, CEO, confirmed it is a record high and expressed confidence in continued growth potential, driven by innovative solutions and a strong global presence.

Q: Is the new facility in the south of Israel fully operational, and what is the capacity for additional ammunition volumes? A: Yaacov Kagan, CFO, stated that the company is expanding capacity with investments in the Ramat Beka site and other locations, both in Israel and abroad, to meet growing demand.

Q: What are your expectations for growth across regions and end markets in the coming years? A: Yaacov Kagan, CFO, anticipates strong growth in Europe due to increased defense budgets, continued growth in Israel with a $3 billion backlog increase, and sustained demand in Asia Pacific.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.