Financial Data and Key Metrics Changes - Third Quarter 2025 revenues were $1,922 million, a 12% increase from $1,718 million in the Third Quarter of 2024, with 18% growth for the nine months ended September 30 [4][10] - GAAP gross margin improved to 24.9% in the Third Quarter from 24% in the same quarter last year, while non-GAAP gross margin rose to 25.2% from 24.4% [5][8] - GAAP diluted EPS increased to $2.80 from $1.77 year-over-year, and non-GAAP diluted EPS rose to $3.35 from $2.21 [8] Business Line Data and Key Metrics Changes - Aerospace segment revenues decreased by 3% year-over-year, primarily due to lower precision-guided munitions sales in Asia-Pacific, offset by increases in Israel and Europe [8] - SIFRAE and CYBER revenues increased by 14% year-over-year, driven by sales in Europe [9] - Land segment revenues surged by 41% in the third quarter, attributed to ammunition and munitions sales in Israel and Europe [9] Market Data and Key Metrics Changes - Revenue contributions for the Third Quarter 2025 were as follows: Europe 28%, North America 21%, Asia-Pacific 14%, and Israel 33% [4] - The order backlog as of September 30, 2025, was $25.2 billion, an increase of $3.1 billion from the same quarter last year [10] Company Strategy and Development Direction - The company aims to focus on growth outside of Israel, particularly in Europe, as indicated by a backlog increase of $1.2 billion from international orders [22] - Elbit Systems is expanding its operations in Europe with new facilities in Sweden and Germany to enhance local delivery capabilities [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued growth driven by strong demand for solutions, particularly in Europe and Israel, amidst rising global defense budgets [11] - The company anticipates that the ceasefire will allow for a return to normal business operations and potentially more opportunities for new business [36] Other Important Information - The Board of Directors declared a dividend of $0.75 per share to be paid on January 5, 2026, reflecting the company's strong financial performance [10] - Elbit signed a significant international contract worth approximately $2.3 billion, marking the largest contract in the company's history [12] Q&A Session Summary Question: How enduring is domestic demand with the ceasefire? - Management noted an increase in backlog, with $200 million in Israel and $1.2 billion outside Israel, indicating a focus on growth outside Israel, especially in Europe [22] Question: What is the outlook for the air and aerospace business? - Management expects continued growth in the aerospace segment, driven by international sales and demand for UAVs [25][26] Question: Are there opportunities in directed energy solutions? - Management confirmed significant interest in high-powered laser systems, with potential orders expected based on success in Israel [28][30] Question: What are the drivers behind the strong margin performance? - The margin expansion is attributed to improved backlog profitability and operational excellence initiatives, including AI utilization [34][35] Question: Any updates on profitability targets for 2026? - Management refrained from providing specific targets but emphasized ongoing efforts to improve profitability and cash conversion [40] Question: How does Elbit plan to leverage the US DOD's budget expansion? - Management highlighted the strategic importance of the US market and ongoing exploration of acquisition opportunities [41][42]