Elbit Systems Ltd. (ESLT) shares climbed Tuesday after the Israeli defense contractor reported third-quarter earnings that blew past Wall Street expectations, showcasing how global conflicts and rising defense budgets are translating into serious business momentum.

The Numbers Tell a Growth Story

The company posted adjusted earnings per share of $3.35, well above the $2.78 consensus estimate and significantly higher than the $2.21 reported in the same quarter last year. Revenue came in at $1.92 billion for the quarter, slightly missing analyst expectations of $2.02 billion, but the profitability gains more than made up for it.

Margins expanded across the board. Adjusted gross margin grew to 25.2% from 24.4% a year earlier, while adjusted operating margin jumped to 9.7% from 8.2% in the prior year quarter. That's the kind of operational efficiency investors like to see.

Perhaps most impressively, cash provided by operating activities for the nine-month period totaled $461 million, a massive leap from just $82.5 million in the same period last year.

That Order Backlog Though

Here's where things get interesting. As of September 30, 2025, Elbit's order backlog stood at $25.2 billion. That's not just a nice cushion, it's visibility that extends well into the future. About 69% of those orders come from outside Israel, and 38% are scheduled for delivery through the remainder of 2025 and 2026.

Where the Growth Is Coming From

The segment breakdown reveals a defense industry adapting to new threats. Land revenues absolutely exploded, surging 41% year over year to $593.7 million, fueled by ammunition and munition sales across Israel and Europe. C4I and Cyber revenues climbed 14% to $243.3 million, driven by strong demand for radio systems and command and control systems in Europe. ISTAR and EW revenues grew 5% to $340.7 million on increased sales of Electro-Optic and Electronic Warfare systems in Israel.

Not everything was up. Aerospace revenues dipped 3% to $477.7 million due to lower Precision Guided Munition sales in Asia Pacific, while Elbit Systems of America revenues fell 2% to $407.7 million on softer sales of electronic systems and medical instrumentation.

What Management Is Saying

Elbit CEO Bezhalel (Butzi) Machlis pointed to the company's growing international footprint: "These results reflect the significant contracts the company has secured across Europe and from customers worldwide, who continue to choose Elbit Systems' advanced systems amid the ongoing global conflicts and increasing defense budgets. Our tested and proven systems contribute to substantial operational successes and achievements, and they strengthen the national security of many countries, including those in Europe, which has become a major market for the company."

Recent Contract Wins

Just Monday, Elbit announced a massive international contract worth approximately $2.3 billion to be executed over the next eight years. That's the kind of deal that keeps the backlog growing.

Shareholder Returns

The board declared a dividend of 75 cents per share, payable on January 5, 2026 to shareholders of record on December 22, 2025.

ESLT shares were trading higher by 5.23% to $529.55 in premarket action Tuesday.