Elbit Systems Ltd.

Ladies and gentlemen, thank you for standing by. Welcome to Elbit Systems' second quarter 2025 results conference call. All participants are as 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 Sim, Elbit Systems VP Investor Relations. Daniela, please go ahead. Thank you, Hila.

Good day, everyone, and welcome to our second quarter 2025 earnings call. On the call with me today are Bootsy Matlis, President and CEO, and Kobi Hayden, CFO. Before we begin, I would like to point out that the same part of the statement in the company's press release issued earlier today also refers to the contents of this conference call. As usual, We will provide you with both gaps, financial data, as well as certain supplements, non-gap information. We believe that this non-gap information provides additional detail to help understand the performance of the ongoing business. You can find all the details, gaps, financial data, as well as the non-gap information and the reconciliation in today's press release. As usual, Cody will begin by providing a discussion of the financial results, followed by Bootsy, who will talk about some of the significant developments during the quarter and beyond. We will then turn the call over to question and answer session. With that, I would like to now turn the call over to Cody. Cody, please go ahead.

Thank you, Daniela. Hello, everyone, and thank you for joining us today. We are very pleased to announce another set of quarterly results with strong double-digit year-over-year growth across all parameters. We recorded growth across all business segments and geographies, especially in Europe, as well as margin expansion. Backlog increased 12% from the corresponding quarter in 2024, and free cash flow generated this quarter totaled $71 million. I will now highlight and discuss some of the key figures and trends in our financial results this quarter. Second quarter 2025 revenues were $1,973,000,000 compared to $1,626,000,000 in the second quarter of 2024. In the second quarter of 2025, Europe contributed 29%, North America 21%, Asia-Pacific 13%, and Israel was 34% of revenues. Demand continues to be rabat in all three geographies, as evident in the higher sales in all geographies this quarter. Gap growth margin in the second quarter was 24% of revenues, compared to 24% in the second quarter of 2024. The non-gap margin for the second quarter was 24.4% of revenues, compared to 24.4% in the second quarter of 2024. GAAP operating income for the second quarter was $157.8 million or 8% of revenues versus $116.5 million or 7.2% of revenues in the second quarter of 2024. Non-GAAP operating income was $175.1 million or 8.9% of revenues, compared with $130.5 million, or 8% of revenues, in the second quarter of last year. We are very pleased with this margin extension, which is a result of the company's joint effort to improve profitability. The operating expense breakdown in the second quarter was as follows. Net R&D expenses were $129.7 billion, or 6.6% of revenues, compared to $116.8 billion, or 7.2% of revenues, in the second quarter of 2024. Albit continues to invest in R&D to develop cutting-edge technological products and solutions, which will maintain Albit's position as a market leader. Marketing and selling expenses were $91.5 million or 4.6% of revenues versus $87.7 million or 5.4% in the second quarter of 2024. GMA expenses were $93.9 million or 4.8% of revenues compared to $68.7 million or 4.2% of revenues in the second quarter of 2024. The increase in GNA expenses for the second quarter of 2025 was mainly due to one-time expenses incurred during the current quarter. GNA expenses during the second quarter of 2024 were lower than average. Financial expenses were $31.2 million in the second quarter compared to $29.1 million in the second quarter of 2024. Financial expenses during the quarter were impacted by the relatively sharp fluctuations of exchange rates, by the strong free cash flow from the beginning of the year, and from the offering proceeds that in the short term decreased the company's loan portfolio. We recorded a tax expense of $7.1 million in the second quarter, compared to $11.3 million in the second quarter of 2024. The effective tax rate in the second quarter of 2025 was 5.6% compared to 13.2% in the second quarter of 2024. The decrease in effective tax rates for the second quarter of 2025 was mainly due to the increase in deferred tax assets and the settlement of tax assessments. Yet diluted EPS was $2.69 for the second quarter of 2025, compared to $1.76 in the second quarter of 2024. Our non-GAAP diluted EPS was $3.23 for the second quarter of 2025, compared to $2.08 in the second quarter of 2024. Quarterly segment revenue for the second quarter of 2025. Aerospace revenue increased by 12% year-over-year, mainly due to increase in precision-guided munition sales in Israel and Asia-Pacific, and UAF sales in Europe. C4I and cyber revenues increased by 21% year-over-year, mainly due to radio systems and command-and-control system sales in Israel and in Europe. I-Star and EW revenues increased by 15% in the second quarter of 2025, mainly due to electro-optical system sales in Israel and electronic warfare system sales in Europe. Land revenues increased by 45% in the second quarter of 2025 due to ammunition and munition sales in Israel and in Europe. Algae systems of America revenues increased by 4% due to the increase in maritime and warfighter systems sales. Our order backlog as of June 30, 2025, was $23.8 billion, $2.6 billion higher than the backlog at the end of the second quarter of 2024, and $626 million higher than the backlog in the first quarter of 2025. The increase in backlog during the quarter came mainly from new international orders. Approximately 68% of current backlog is delivered from orders outside of Israel. Approximately 46% of the current backlog is scheduled to be performed during the remainder of 2025 and during 2026, and the rest is scheduled for 2027 and beyond. Cash flow provided by operating activities in the sixth quarter ended June 30th, 2025 was $304 million, as compared to $26 million in the six months ended June 30th, 2024. The cash flow in the six months ended June 30th, June 30th, 2025 was affected mainly by the strong increase in net income. On the back of the continued strong financial performance of the company, the board of directors has decided to increase the dividend and declare a dividend of 75 cents per share, 60% higher than the dividend distributed last year and the second dividend raise this year. I will now turn the call over to Mr. Matlis, LBCO. Butsy, please go ahead.