Elbit Systems Ltd.

Ladies and gentlemen, thank you for standing by. Welcome to Elbit Systems' fourth 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 Daniela Finn, Elbit Systems' VP, Investor Relations. Daniela, please go ahead.

Thank you, Anit. Hello, everyone, and welcome to our annual and fourth quarter 2024 earnings call. On the call with me today are Bootsy Machlis, President and CEO, Kobi Kagan, CFO, and myself, Daniela Sen, VP, Investor Relations. Earlier today, we hosted an investor conference at the Tel Aviv Stock Exchange. A recording of the event is available in our investor relations section of our website at www.elbetsystems.com. 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. I'd like to remind all listeners that the conference call today may contain forward-looking statements regarding the company and its subsidiary's business, and actual future results may differ materially from these forward-looking statements. As usual, we will provide you with both GAAP financial data as well as certain supplemental non-GAAP information. We believe that this non-GAAP information provides additional transparency to better understand the performance of the ongoing business. You can find all the detailed GAAP financial data, as well as the non-GAAP information and the reconciliation in today's press release. Kobi will begin by discussing the financial results, followed by Busi, who will elaborate on the main events during the quarter and beyond. We will then turn the call over to a Q&A session. With that, I'd like to now turn the call over to Kobi. Kobi, please go ahead.

Thank you, Daniela. Hello, everyone, and thank you for joining us today. The strong set of financial results for the fourth quarter of 2024 continues to reflect the ongoing demand for our cutting-edge solutions as we present another quarter of double-digit growth in revenues, backlog, operating profit, and non-GAAP EPS. During 2024, we also delivered $320 million of free cash flow, we are very pleased with these results. Diving into the fourth quarter results in detail. Fourth quarter revenues increased by 19% to $1,930,000,000 compared to $1,626,000,000 in the fourth quarter of 2023. Full year 2024 revenues increased by 14% to $6,000,000,000 $828 million compared to $5,975 million in the 2023. In terms of quarterly revenues by segment, aerospace revenues increased by 27% in the fourth quarter of 2024 compared to the fourth quarter of 2023, mainly due to increased UAS sales in Israel and Europe. and increased precision-guided munitions revenue. C4I and cyber revenues increased by 7% year-over-year, mainly due to radio systems and command-and-control system sales. I-STAR and EW revenues increased by 8%, mainly due to electronic warfare and electro-optical system sales in Israel. Land revenue increased by 29%, due to increase in ammunition and munition sales in Israel. Elbit Systems of America revenues increased by 6% mainly due to increase in night vision systems and medical instrumentation sales. Elbit System diverse geographic revenue base as well as its product portfolio help to reduce revenue volatility and support the long-term sustainability of our business. Only recently, the president of the European Commission stated in a letter that Europe needs to be in charge of its own defense. Subsequently, she announced a dedicated budget of 150 billion euros to support this rearmament effort in Europe. For the full year of 2024, Europe contributed 27% of revenues, North America 22% of revenues, Asia Pacific 17% of revenues, and Israel contributed 29% of revenues. As in previous quarter, Israel revenue continued to grow on the back of the swords of iron war. This growth came mainly from the land segment. The non-GAAP gross margin for the fourth quarter was 24.5% compared to the fourth quarter of 2023 at 25.3%. The non-GAAP gross margin for the full year 2024 was 24.5 percent compared to 2023 at 25.7 percent. Gap gross margin in the fourth quarter was 24.1 percent of revenues compared to 23.5 in the fourth quarter of 2023. Gap gross margin for the full year 2024 was 24 percent compared to 2023 at 24.8 percent. Fourth quarter non-GAAP operating income was $157.5 billion or 8.2% of revenues in the fourth quarter of 2024 as compared to $104.8 million or 6.4% of revenues in the fourth quarter of 2023. GAAP operating income for the fourth quarter was $141.4 billion or 7.3% of revenues as compared to $67.6 million or 4.2% of revenues in the fourth quarter of 2023. Full year 2024 non-GAAP operating income was $550 million or 8.1% of revenue as compared to $448 million or 7.5% of revenues in 2023. GAAP operating income for 2020 2024 was $489 million, or 7.2 percent of revenue, as compared to $369 million, or 6.2 percent of revenues in 2020. The operating expense breakdown for the full year was as follows. Net R&D expenses were $466 million, or 6.8 percent of revenues, as compared to $424 million or 7.1 percent of revenues in 2023. The increase is mainly due to investment in expanding our portfolio of precision-guided munition as well as increased investment in high-power laser. Marketing and selling expenses were $375 million or 5.5 percent of revenues in 2024 as compared $359 million or 6% of revenues in 2023. G and A expenses were $311 million or 4.6% of revenues in 2024 as compared to $330 million or 5.5% of revenues in the same period last year. Financial expenses were $151 million in 2024 as compared to $137 million in 2023. The increase in financial expenses net in 2024 is mainly due to factoring expenses related to the extension of the premise evacuation agreements. The effective tax rate in 2024 was 11.4% compared to 10.1% in 2023. The tax expenses in 2024 and 2023 were affected by the tax benefits related to adjustments for peer years following tax settlements in some of the company's subsidiaries in Israel. Our non-GAAP diluted EPS was $2.66 in the fourth quarter of 2024, compared to $1.56 in the fourth quarter of 2023. GAAP diluted EPS was $2 for the fourth quarter of 2024 compared to 67 cents in the fourth quarter of 2023. This is the third consecutive quarter of double-digit EPS growth. Non-GAAP diluted EPS was $8.76 in the full year of 2024 compared to $6.70 in the full year of 2023. Gap diluted EPS was $7.18 for the full year of 2024, compared to $4.82 in 2023. Our backlog of orders as of December 31st, 2024 was $22.6 billion, approximately $4.8 billion higher than the backlog at the end of 2023. Approximately 65 percent of the current backlog was generated from outside of Israel. Approximately 57 percent of the backlog at the end of December is scheduled to be performed during 2025 and in 2026, while the rest is scheduled to be performed during 2027 and beyond, a testimony of the potential of the company's continuing growth trajectory. Net cash flow provided by operating activities in the year ended December 31st, 2024 was $535 million as compared to $114 million in the year ended December 31st, 2023. Operating cash flow in 2024 were affected mainly by the increase in contract liabilities, upset by the increase in inventories and trade receivables. During 2024, we also delivered $320 million of free cash flow. It should be noted that our free cash flow generation is usually back-end loaded. The board of directors has declared a dividend of 60 cents per share. I will now turn the call over to Mr. Maklis, Albert's president and CEO. Bootsy, please go ahead.