Israeli protection companies orders backlog balloons to $80b
Israel protection firms are at present publishing their monetary stories for 2025, that are exhibiting an enormous leap of their orders backlogs. An investigation by “Globes” finds that the general public firms within the protection sector, along with government-owned Rafael Superior Protection Techniques and Israel Aerospace Industries (IAI), have an enormous orders backlog of over $80 billion. For comparability, that is an quantity considerably greater than Israel’s well being finances or the nation’s complete annual curiosity repayments.
The most recent to publish its monetary report exhibiting a rise within the order backlog is Elbit Techniques Ltd. (Nasdaq: ESLT; TASE:ESLT), probably the most worthwhile Israeli firm traded on the TASE and Wall Road. Elbit ended 2025 with an order backlog at a document degree of $28.1 billion – a rise of $2.9 billion in the course of the fourth quarter alone and a rise of $5.5 billion from 2024..
By geographic area, Israel accounted for 32.2% of gross sales in 2025, with over $2.5 billion – a development of 28.6%. Europe, the place gross sales grew by 17.5% to $2.1 billion, accounted for 27% of gross sales, and North America with a share of 20.9% and an annual development of 9.1%.
Elbit’s document orders backlog displays the rising demand for protection techniques. In recent times, because of the warfare within the Center East and, earlier, the Russia-Ukraine warfare, there was a change within the insurance policies of nations, that are growing protection budgets.
Elbit just isn’t alone
Elbit Techniques is on no account the one Israeli firm benefiting from the large demand for protection merchandise. Others have already printed their monetary stories together with IAI, which had an orders backlog of $29 billion on the finish of 2025, in contrast with $25 billion on the finish of 2024.
Subsequent Imaginative and prescient (TASE: NXSN) had an orders backlog of $218 million on the finish of 2025, which had already climbed to $288 million final week. Rafael, will report its newest figures within the coming few days, however a number of months in the past its orders backlog was $22 billion. At Rafael, which in contrast to IAI and Elbit which might be extra targeted abroad, the orders backlog is cut up roughly 50-50 between Israel and overseas.
Between the backlog and money
The backlog of orders of Israeli protection firms will translate into gross sales within the coming years and supplies affluent prospects for the businesses and their buyers. At a convention held by Elbit on the Tel Aviv Inventory Trade, CFO Dr. Kobi Kagan stated, “The outcomes are very robust. We’ve got crossed the $500 million mark in free money stream, and for the primary time we reported quarterly income of over $2 billion – a document quarter.”
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In response to Kagan, Elbit moded final 12 months in direction of the long-term goals it had set for itself. “The backlog grew by 24% in contrast with the earlier 12 months, and gross sales grew by 16%, and therefore it’s clear that the backlog helps continued gross sales development,” stated Kagan. Referring to the corporate’s divisions, he stated, “The distribution is nearly balanced between the divisions, and that’s vital. Elbit doesn’t depend on one division or one geographic area.”
Regardless of the spectacular numbers, analysts level out {that a} backlog of orders doesn’t instantly translate into money. David Levinson, an analyst at Financial institution Hapoalim’s analysis unit, explains that protection industries have a restricted “high pace.” In response to him, firms can develop at a double-digit fee of 15% to twenty% in gross sales per 12 months at most, as a consequence of infrastructural limitations of factories and an extended coaching time for expert personnel.
“Investing in factories and hiring employees takes time,” says Levinson. He provides that there’s a world bottleneck within the ammunition sector and firms are cautious to not signal contracts that they can not ship: “They merely is not going to signal a contract if they can not ship the ammunition. They won’t achieve this on the expense of an current dedication to a different nation.”
Nevertheless, Idan Seri, funding supervisor and analyst at Anek Capital Israel, claims that the reported backlog doesn’t but mirror the complete demand. “There’s a distinction between a signed backlog and a backlog of alternatives,” says Sari. “The US protection finances is rising to historic proportions, and we don’t but see its influence within the numbers.” In response to him, strategic tasks at present in growth, such because the Golden Dome (laser system), are anticipated to inject extra billions into the backlog within the coming years as soon as they attain the procurement stage.
Tight schedules
Will Isarael’s protection firms be capable to fulfil this large orders backlog overseas, along with the excessive demand in Israel as a consequence of home safety challenges? Levinson makes it clear that the enterprise mannequin of the big firms, and particularly Elbit, is constructed to forestall such conflicting calls for.
“Protection industries are basically native,” he explains. “Elbit Israel produces for Israel, and Elbit England produces for England. Every subsidiary is ‘regionally patriotic’ and is prioritized in relation to the native nation during which it operates. If there’s a scarcity, Israeli manufacturing will likely be directed first to the IDF, however this doesn’t come on the expense of the worldwide market, which depends on subsidiaries overseas.
Probably the most shocking determine, in line with Elad Kraus, analysis director at Meitav Brokerage, is not only the scale of the backlog however the pace with which clients anticipate to obtain the products. Not like up to now, the place the backlog of orders was unfold over a few years, at present clients around the globe are in a pressured arms race. “The primary factor is that these are orders for right here and now,” Kraus explains. “At Elbit, for instance, over half of this large backlog – about 54% – is meant for supply within the subsequent two years. This determine illustrates not solely the excessive demand, but additionally the big strain positioned on the shoulders of the industries to ship the techniques on extraordinarily tight schedules.”
Kraus provides that the present backlog provides the most important gamers extraordinary operational stability. “You would say that Elbit is kind of closed for the following three years,” he says. “This can be a very excessive operational energy that can also be being felt within the aerospace business, the place we’re seeing jumps in backlog ranges that we’ve got not seen earlier than. This increase can also be permeating medium-sized firms, reminiscent of Subsequent Imaginative and prescient, that are exhibiting a big enhance in orders, primarily from the worldwide market.”
Extra staff and factories
Elbit Techniques CEO Bezhalel Machlis introduced the corporate’s technique, which is constructed on a number of pillars together with strategic partnerships with clients, a global presence with subsidiaries, funding in innovation and R&D, and the standard of the corporate’s staff. Machlis famous that the variety of staff elevated by about 2,000 to 24,000 up to now 12 months, of which 14,000 are in Israel.
These developments are happening all through the business. In response to Kraus, the flexibility to satisfy commitments is the primary problem within the coming 12 months. “To satisfy demand, firms should make structural adjustments, open new manufacturing strains and factories, and maybe even purchase extra actions. This requires rethinking the complete provide chain with a view to ship the products on time.”
Machlis says, “The market is present process very main adjustments. There may be an ongoing warfare within the Center East, and the scenario in Iran has an awesome influence on the corporate’s actions.” In response to him, within the warfare towards Iran, the Ministry of Protection makes use of quite a lot of Elbit’s armaments, together with munitions that the majority importantly the air power drops on Iran and drone techniques which might be used to destroy missile batteries and launchers. “Elbit’s involvement in fight is important, and it impacts different nations within the area, a few of which we’re energetic in,” stated Machlis, noting that the corporate additionally operates by means of a subsidiary within the UAE.
“This connects to different conflicts on this planet: the Russia-Ukraine warfare, which is creating a big provide hub in Europe, the rise in stress between the US and China, and just lately, rising tensions between India and Pakistan,” added Machlis.
This has all led to a rise in protection budgets, and the need of nations to acquire “right here and now” and acquire confirmed operational options as quickly as doable. One other pattern is that nations are searching for to scale back dependence on exterior elements within the provide chain and produce at house, and Elbit has ready for this by means of its subsidiaries around the globe.
Revealed by Globes, Israel enterprise information – en.globes.co.il – on March 18, 2026.
© Copyright of Globes Writer Itonut (1983) Ltd., 2026.
