The following is a summary of the Elbit Systems Ltd. (ESLT) Q2 2024 Earnings Call Transcript:

Financial Performance:

• Elbit Systems reported Q2 2024 revenues of $1,626 million, a 12% increase from $1,454 million in Q2 2023.

• GAAP gross margin was 24%, down from 25.6% in Q2 2023, while non-GAAP gross margin was 24.4%, down from 26.1%.

• GAAP operating income was $116.5 million or 7.2% of revenues, up from $101.6 million or 7% of revenues year-over-year, reflecting improved operating expense efficiency.

• Non-GAAP diluted EPS was $2.08, up 26% from $1.65 in the same quarter last year.

Business Progress:

• Elbit Systems continues to invest in expanding production capacity, including the construction of a new manufacturing facility, and implementing new ERP systems across 90% of the company.

• Notable contracts include a $270 million deal to supply rocket artillery to an international customer, a $130 million contract with BAE Systems for Iron Fist Active Protection System, and a $190 million deal with the Israeli MoD for Iron Sting Guided Mortar Munition.

• Elbit America delivered the 3,000th F-35 Helmet Mounted Display System, marking significant progress in their aerospace contributions.

Opportunities:

• The growing international demand for Elbit's diverse product offerings, especially from the U.S. and European markets, presents opportunities for further expansion.

• Increased backlog, which reached $21.1 billion, demonstrates strong ongoing demand and future revenue potential, especially from international markets which constitute 73% of total revenues.

Risks:

• The company faces lower gross margins primarily influenced by increased sales in Israel and changes in geographic revenue mix, with potential impacts from supply chain disruptions.

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