Elbit Systems Ltd.

Ladies and gentlemen, thank you for standing by. Welcome to Elbit Systems' second quarter 2024 results conference call. All participants are present in listen-only mode. Following management's formal presentation, instructions will be given for the question and answer session. As a reminder, this conference is being recorded. I would now like to hand over the call to David Revia, Elbit Systems' Investor Relations Director. David, please go ahead.

Thank you, operator. Good day, everyone, and welcome to our second quarter 2024 earnings call. On the call with me today are Bouti Mahlis, our president and CEO, and Kobi Kagan, our CFO. Before we begin, I would like to point out that the safe harbor statement in the company's press release issued earlier today also refers to the contents of this conference call. As we do every quarter, we will provide you with both our regular GAAP financial data and certain supplemental non-GAAP information. We believe that this non-GAAP information provides additional details to help understand the performance of our business. You can find all the detailed GAAP financial data as well as the non-GAAP information and their reconciliation in today's press release. COPI will begin by providing a discussion of the financial results followed by Pussy, who will talk about some of the significant events during the quarter and beyond. We will then turn the call over to a Q&A session. With that, I would like now to turn the call over to Kobi.

Kobi, please. Thank you, David. Hello, everyone, and thank you for joining us today. The second quarter of 2024 yielded positive results, driven by 12% year-over-year increase in revenues, additional growth of our backlog that now exceeds $21 billion and improved profitability. I will now highlight and discuss key figures and trends in our financial results. Second quarter revenues reached $1,626,000,000 compared to $1,454,000,000 in the second quarter of 2023. This reflects 12 percent growth and is the second quarter in a row in which we have experienced low double-digit revenue growth. In the second quarter of 2024, Europe contributed 29 percent of revenues, North America 23 percent of revenues, Asia Pacific 15 percent of revenues, and Israel contributed 27 percent of revenues. It should be noted that our diverse geographic revenue distribution is a very important factor for the long-term sustainability of our business. Israeli revenues grew from $245 million in the second quarter of 2023 to $444 million in the second quarter of 2024. This growth reflects the increased demand for a broad range of our solutions following the breakout of the sorts of Iran war. In addition, we see growth in North America revenues due to the increasing demand for maritime and war priority assistance. The non-GAAP gross margin in the second quarter was 24.4% compared to 26.1% in the second quarter of 2023. GAAP gross margin in the second quarter was 24% of revenues compared to 25.6 percent in the second quarter of 2023. The second quarter non-GAAP operating income was $130.5 million, or 8 percent of revenues, compared with $116.5 million, or 7.9 percent of revenues in the second quarter of last year. GAAP operating income for the second quarter was $116.5 million, or 7.2 percent of revenues compared to $101.6 million, or 7 percent of revenues in the second quarter of 2023. This growth in operating income and expansion in operating margin are the result of increased operating expenses efficiency. The operating expense breakdown in the second quarter was as follows. Net R&D expenses were $116.8 million or 7.2% of revenues compared to $93.4 million or 6.4% of revenues in the second quarter of 2023. This increase was due to additional R&D efforts in our land segment and continuous investment in high-power laser solutions. Marketing and selling expenses were $87.7 million or 5.4% of revenues versus $101.7 million or 7% in the second quarter of 2023. G&A expenses were $68.7 million or 4.2% of revenues compared to $75.4 million or 5.2% of revenues in the second quarter of 2023. Financial expenses were $29.1 million in the second quarter of 2024, compared to $32.1 million in the second quarter of 2023. The financial expense amounts reflect the monitoring policy implemented by central banks in the markets in which LBIT operates, including the Bank of Israel and United States Federal Reserve in response to rising inflation by retaining interest rates at high level. Additionally, a rapidly growing backlog due to the source of iron ore required higher levels of working capital and capital expenditures. We recorded a tax expense of $11.3 million in the second quarter of 2024, compared to $9.2 million in the second quarter of 2023. The effective tax rate in the second quarter of 2024 was 13.2% compared to 13.6% in the second quarter of 2023. Our non-GAAP diluted EPS was $2.08 for the second quarter of 2024 compared to $1.65 in the second quarter of 2023. Gap diluted DPS was $1.76 for the second quarter of 2024 compared to $1.40 in the second quarter of 2023. We can see a 26% increase in both non-gap and gap diluted DPS in the second quarter of 2024 compared to the second quarter of 2023. We remain focused on profitability with the aim of achieving additional growth in the next quarter of 2024. I will now review the second quarter of 2024 year-over-year performance of our business segments. Note that our segmental disclosure is provided on gap basis. Aerospace revenues were almost similar year-over-year with small 1% decrease. C4I and cyber revenues increased by 11% year-over-year, mainly due to radio system sales. ISAR and EW revenues increased by 9% year-over-year, mainly due to electronic warfare and electro-optic system sales in Israel and Asia Pacific. Land revenues increased by 37% year-over-year, mainly due to increased ammunition and munition sales in Israel. Elbit Systems of America revenues increased by 11 percent year-over-year. Our order backlog as of June 30, 2024, reached $21.1 billion, $5 billion higher than our backlog at the end of the second quarter of 2023. Approximately $2.5 billion of this increase came from Israel. In the second quarter of 2024, the company recorded new orders of $2.4 billion, of which $1.1 billion came out from the Israeli market. Approximately 69% of the current backlog is attributable to orders from outside of Israel. Approximately 43% of the current backlog is scheduled to be performed during 2024 and 2025, while the rest is scheduled to be performed during 2026 and after, which demonstrates the potential growth of the company. Operating cash flow for the six months ending 30th of June 2024 was $26 million inflow, compared to $210.7 million outflow for the same period last year. We continue to increase inventories to support the increasing backlog. The board of directors has declared a dividend of 50 cents per share. I will now turn the call over to Mr. Marklis, Elbit CEO. Bootsy, please go ahead.