Key Takeaways
- Israel Aerospace Industries reported a 21% increase in annual revenue, reaching $7.38 billion for 2025.
- Net income surged 45% to $712 million, marking a record high for the company.
- The company’s order backlog rose to nearly $29 billion, driven largely by military and defense system sales.
Record Financial Performance in 2025
Israel Aerospace Industries (IAI) announced unprecedented financial results for 2025, driven by a significant demand for advanced defense systems and aerospace technology. The company, state-owned and pivotal in Israel’s defense spectrum, experienced a 21% increase in annual revenue, amounting to $7.38 billion, up from $6.11 billion in 2024. Additionally, net income soared by 45% to $712 million, marking the highest figure in IAI’s history.
Profitability metrics also demonstrated remarkable growth. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) rose by 37% to $1.08 billion, while gross profit increased to $1.43 billion from $1.14 billion a year prior. Operating income surged 51% to $751 million, reflecting improved efficiency across IAI’s various divisions.
The company’s order backlog reached nearly $29 billion by the end of 2025, an increase from $25 billion in 2024, which equates to roughly four years’ worth of work at current production levels. Notably, around 71% of this backlog comes from international customers, underscoring strong export demand.
CEO Boaz Levy remarked that these robust results were achieved amid ongoing security challenges in Israel. “A highly complex security reality marked the year 2025 for the State of Israel,” Levy noted, emphasizing IAI’s role in supporting Israel’s defense operations.
Much of IAI’s growth was attributed to its military divisions, particularly the Systems, Missiles & Space Group and the ELTA radar and electronics unit. Sales from these military operations rose by 23%, totaling $6.4 billion, compared to $5.19 billion the previous year. The aviation division, focused on aircraft maintenance and upgrades, also reported a 9% increase in sales to $1.61 billion.
IAI’s strong financial performance was complemented by a substantial positive operating cash flow of approximately $612 million in 2025 and about $4 billion in free cash flow. The company invested $318 million into research and development, maintaining a commitment of around 4% of total sales. Furthermore, net financial income climbed to $172 million, while tax payments amounted to $204 million.
The final quarter of 2025 showcased considerable growth, with fourth-quarter sales reaching $2.25 billion—up 31% from $1.72 billion in the same period of 2024. Net income for the quarter surged to $228 million compared to $77 million a year earlier, while operating income experienced a near quadrupling effect, rising to $262 million.
IAI’s remarkable results are reflective of a broader global trend of increasing military spending amid geopolitical tensions. The company remains committed to investing in advanced technologies while collaborating closely with Israel’s defense establishment to maintain a competitive edge. Looking ahead, IAI plans to further expand its global footprint and focus on innovative solutions to meet future security challenges.
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