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Israel Aerospace Industries reports most profitable year in its history

International demand for Israel’s military technology has surged as European countries increased their defense budgets in response to Russia’s war in Ukraine.

By Pesach Benson, TPS

Israel Aerospace Industries reported a record-breaking order backlog of approximately $25 billion and a 74% increase in net income in its third-quarter earnings report released on Thursday.

“During this time, we have achieved unprecedented milestones, not just in technological and business terms but as a testament to our commitment to excellence,” said IAI chairman Amir Peretz.

Net income for the nine months ending September 30 rose sharply to $416 million, up from $239 million in the same period last year, making it the most profitable period in the state-owned company’s history.

For the third quarter alone, net income increased to $122 million, a significant rise from $74 million in Q3 2023.

The growth was driven by IAI’s Missile and Space Systems Division, with $1.87 billion in sales for the first nine months of 2024, up from $1.63 billion in 2023. The Arrow missile system earned global acclaim, supported by increased R&D investment of $81 million in Q3, up from $65 million.

IAI also reported a record-breaking $25 billion order backlog as of September 30, 2024. This represents a $7.22 billion increase from the previous year and secures 3.5 years of operations at current sales volumes.

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International demand for Israel’s military technology has surged as European countries increased their defense budgets in response to Russia’s war in Ukraine. Israel is developing a multilayered aerial defense system that has drawn global attention.

The Arrow-3 system, which is designed to intercept ballistic missiles, had its first operational success when it shot down a ballistic missile fired by Iran-backed Houthi rebels in Yemen in November.

It is widely believed to be the first time a missile was intercepted in outer space, but Israeli officials have not confirmed this.

Operating income during the nine months grew to $431 million, up from $292 million in 2023.

Earnings before interest, taxes, depreciation, and amortization (EBITDA) for the nine-month period reached $646 million, a 33% increase year-over-year, while gross profit for the third quarter climbed 25% to $282 million, reflecting an 18% profit margin.

The company’s sales also rose, reaching $4.39 billion for the nine-month period, a 13% increase from $3.87 billion in the previous year. Third-quarter sales alone totaled $1.54 billion, up 16% from Q3 2023.

This growth was driven by increased demand across all business divisions, with particularly strong performance in the Military and Aviation groups.

“Despite a national crisis, IAI maintained supply chain continuity and expanded its global relationships. Our systems play a critical role in Israel’s defense while strengthening our international standing,” said IAI President and CEO Boaz Levy.