Israel Aerospace Industries (IAI) has reported its strongest quarterly performance to date, marking the most profitable period in the company’s history. For the first quarter of 2025, IAI recorded a net income of USD 164 million, a 21% increase compared to USD 135 million in the same period last year. This figure represents 10.2% of sales, up from 9.4% in Q1 2024.
Sales for the quarter reached USD 1.61 billion, a 12% rise from USD 1.43 billion in Q1 2024. EBITDA grew by 11% to USD 240 million, and operating income increased 12% to USD 165 million. Gross profit also climbed 12%, totaling USD 305 million for the quarter. Positive cash flow from operating activities amounted to USD 495 million, raising the company’s free cash flow to USD 4.3 billion.
The company’s order backlog reached an all-time high of USD 26.1 billion, reflecting about 4.3 years of operation at current sales levels. Of this total, 72% is allocated for foreign customers across a diverse geographical spread, reinforcing IAI’s strong international standing.
Boaz Levy, IAI President and CEO stated, “We are proud to present strong business results for the first quarter of 2025, marking a phenomenal start for the year and reflecting an outstanding period for the State of Israel and for IAI, which plays a central role in ensuring the country’s security. Our order backlog has reached an all-time high, evidencing our long-term capabilities in years to come, based on contracts with international customers and the Israeli defense establishment. While IAI’s systems are actively defending the country against a wide range of threats, our business results greatly contribute to Israel’s economic resilience. In this challenging geopolitical landscape, marked by increased global demand for defense procurement from a diverse range of customers, IAI continues to stand out as a global leader with combat-proven solutions that serve as a true force multiplier for all our customers.”
Eran Anchikovsky CPA, IAI’s CFO remarked, “IAI is continuing to grow, demonstrating unsurpassed results in the first quarter of 2025 in all financial parameters, including sales, profits and new contracts. The results reflect the continuous and consistent leverage and growth the Company has been experiencing in recent years and the continued implementation of operating cost-efficiency measures, which have significantly improved profits. The order backlog grew to USD 26 billion and is a testament to IAI’s fortitude and the vote of confidence in its products expressed by its customers. Integrating innovative technology with financial stability and valuable human capital allows us to successfully face the challenges of tomorrow and continue achieving feats in the future.”
Segment-wise, the Military Groups reported a 14% increase in sales, rising to USD 1.389 billion, with operating income jumping 19% to USD 139 million. The Aviation Group also saw growth, with sales rising to USD 372 million and operating income increasing to USD 16 million, up from USD 11 million in the previous year.
Export sales in Q1 2025 totaled USD 1.041 billion, accounting for 65% of total revenue, while domestic sales were USD 569 million, making up the remaining 35%. This compares to Q1 2024 export and local sales of USD 939 million (66%) and USD 493 million (34%), respectively.
Net finance income nearly doubled to USD 49 million, compared to USD 25 million in the prior year. Net tax expenses also rose to USD 50 million, up from USD 38 million, consistent with Israel’s corporate tax rate of 23%. As a wholly government-owned company, IAI is not currently eligible for reduced tax rates under Israel’s Law for the Encouragement of Capital Investments, though a sale of any government interests could change its tax classification in the future.
In-house research and development expenses for the quarter were USD 60 million, slightly down from USD 63 million in Q1 2024.
IAI’s financial results for Q1 2025 reflect strong performance across all business segments and markets, underscoring its critical role in both Israel’s security infrastructure and the global defense landscape.