Elbit Systems Ltd.

Thank you for standing by. Welcome to LB Systems' fourth quarter 2025 results conference call. All participants are at 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 Fein, LB Systems VP, Investor Relations. Daniela, please go ahead.

Thank you, Operator. Hello, everyone, and welcome to our fourth quarter 2025 earnings call. On the call we see today are Gusti Maslic, President and CEO, and Toby Cagan, CFO, and myself, Daniela Finn, VP, Investor Relations. Earlier today, we held an investor conference at the Tel Aviv Stock Exchange. A full recording of the event is available in the Investor Relations section of our website at www.investorrelations.com. Before I 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 would like to remind all listeners that the conference call today may contain forward-looking statements regarding the company and its subsidiary systems. Actual future results may differ materially from those 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 spectrum. Kobi will begin by discussing the financial results, followed by Busby, 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. We are closing another strong year and quarter, delivering double-digit growth in revenues operating profit, EPS, and backlog, which grew by $5.5 billion. In 2025, we also generated record free cash flow, surpassing the $0.5 billion mark. We are extremely proud of these results and outstanding execution by our global team. Taking a closer look into the fourth quarter results, Both quarter revenues increased by 11% to $2,149,000,000 compared to $1,930,000,000 in the fourth quarter of 2024. This is the first time our quarterly revenues surpassing the $2,000,000,000 mark. Full year 2025 revenues increased by 16% to $7,939,000,000 compared to $6,828,000,000 in 2024. In terms of quarterly revenues by segment, C4I and cyber revenues increased by 19% in the fourth quarter of 2025, as compared to the fourth quarter of 2024, mainly due to sales of radio and command and control systems in Europe and in Israel. ISTAR and EW revenues increased by 39%, mainly due to increased sales of maritime and electro-optic systems, which include electronic warfare and counter-UAS solutions. Land revenues increased by 22%, mainly due to ammunition and munition sales in Israel and Europe. Elbit systems of America revenues increased by 9%, mainly due to the increase in the sales of night vision and maritime systems, partially upset by the decrease in the sales of medical devices. Aerospace revenue decreased by 14%, mainly due to training and simulation in Europe, and higher sales of PGM in the fourth quarter of 2024. We take great pride in our diverse global customer base, which is a key differentiator for Elbit and ensures ensure we are not reliant on any single country's defense budget. For the full year of 2025, Europe contributed 27% of revenues, North America 21%, Asia-Pacific 16%, and Israel contributed 32% of revenues. We expect Europe to be a meaningful growth engine going forward, following by Asia-Pacific. Gap gross margin in the fourth quarter was 24.7% of revenues compared to 24.1% in the fourth quarter of 2024. Gap gross margin for the full year 2025 was 24.4% compared to 24% at 2024. Non-gap gross margin for the fourth quarter was 25%. compared to the fourth quarter of 2024 at 24.5%. Non-GAAP gross margin for the full year 2025 was 24.7%, compared to fourth quarter of 2024 at 24.5%. GAAP operating income in the fourth quarter was $192 million, or 9% of revenues, as compared to $141 million, or 7.3% of revenues in the fourth quarter of 2024. Non-GAAP operating income was $210 million, or 9.8% of revenues in the fourth quarter of 2025, as compared to $157 million, or 8.2% of revenues in the fourth quarter of 2024. GAAP operating income for the full year 2025 was $671 million or 8.5% of revenues as compared to $489 million or 7.2% of revenues in 2024. Non-GAAP operating income for 2025 was $737 million or 9.3% of revenues as compared to $550 million or 8.1% of revenues in 2024. I am happy we have reached our internal targets for operating profit margins. The operating expense breakdown for the full year was as follows. Net R&D expenses were $517 million or 6.5% of revenues as compared to $466 million or 6.8% of revenues in 2024. This increase is mainly due to investment in expanding our portfolio of precision-guided munitions, as well as increased investment in night vision solutions. Albert continues to invest heavily in disruptive R&D initiatives, including advanced AI capabilities to drive future profitable growth and reinforce the company's position as a market leader in the years ahead. Our strategy focuses on development of advanced solutions funded both internally and in some cases partially supported by the Israeli Ministry of Defense, ensuring sustainable growth today and well into the future. Marketing and selling expenses were $399 million, or 5% of revenues in 2025, as compared to $375 million, or 5.5% of revenues in 2024. G&A expenses were $347 million or 4.4% of revenues in 2025 as compared to $311 million or 4.6% of revenues in the same period last year. Financial expenses were $138 million in 2025 as compared to $151 million in 2024. The decrease in financial expenses next in 2025 is mainly due to lower interest expenses and lower levels of debt. We recorded the tax expense of $55 million in 2025 compared to $39 million in 2024. The effective tax rate in 2025 was 9.9% compared to 11.4% in 2024. The decrease in the tax rate in 2025 was as a result of the valuation allowance releases and adjustments to defer taxes related to prior years following tax settlements in some of the company's subsidiaries in Israel. Get diluted EPS for the fourth quarter of 2025 was $3.52 compared to $2 in the fourth quarter of 2024. Once again, a significant double digit EPS growth in the quarter. Our non-GAAP diluted EPS was $3.56 in the fourth quarter of 2025 compared to $2.66 in the fourth quarter of 2024. GAAP diluted EPS for 2025 was $11.39 compared to $7.18 in 2024. Non-GAAP diluted EPS was $12.75 in the full year of 2025, compared to $8.76 in 2024, well ahead of our internal targets. Our backlog of orders as of December 31st, 2025, was $28.1 billion, approximately $5.5 billion higher than the backlog at the end of 2024. Approximately 72% of the current backlog was generated from outside of Israel. Approximately 54% of the backlog at the end of December is scheduled to be performed during 2026 and 2027, while the rest is scheduled to be performed during 2028 and beyond. Backlog growth was driven by international customer demand. Natcash provided by operating activities in the year ended December 31st, 2025 was $778 million as compared to $535 million in the year ended December 31st, 2024. Operating cash flows in 2025 were affected mainly by the increase in contract liabilities, upset by the increase in inventories and trade receivables. During 2025, we also delivered $553 million of free cash flow, up 73% from the $322 million free cash flow generated in 2024. The Board of Directors has declared a dividend of $1 per share. Yet another dividend increase for 2025 on the back of our strong results. I will now turn the call over to Mr. Maklis, Albert's President and CEO.