Elbit Systems Ltd. (ESLT Quick QuoteESLT - Free Report) used its first-quarter 2026 earnings call to underline a message bigger than the quarter itself: record backlog, stronger European demand and a broader production buildout are giving management more confidence in sustained growth.

Although the company is yet to provide formal guidance, executives sounded increasingly confident about mid-teens revenue growth, margin expansion, and further acquisition activity amid elevated defense demand across multiple regions.

ESLT Backlog Sets the Tone

Chief financial officer Yaacov Kagan opened with the clearest headline from the quarter: backlog topped $30 billion for the first time, reaching $30.2 billion as revenues rose 15.5% to $2.19 billion. Non-GAAP operating margin also moved above 10%, meeting an internal target management had emphasized.

That financial backdrop mattered because management framed it as evidence that demand is converting into profitable growth, not just order accumulation. Non-GAAP EPS rose to $3.87 from $2.57 a year earlier, while free cash flow increased to $210 million.

The quarter also topped the Zacks Consensus Estimate on both major financial metrics, reporting adjusted EPS of $3.87 compared with the expected $3.44 and revenues of $2.19 billion compared with the expected $2.14 billion, based on the provided Zacks data.

Elbit Systems Ltd. Price, Consensus and EPS Surprise

Elbit Systems Ltd. price-consensus-eps-surprise-chart | Elbit Systems Ltd. Quote

Elbit Presses Its Europe Advantage

Chief executive officer Bezhalel Machlis made Europe the center of the strategic narrative. He pointed to a newly announced $1.4 billion European modernization contract and described the region as a major growth engine as customers accelerate procurement and force modernization.

Kagan’s prepared remarks supported that view. Europe represented 23% of first-quarter revenues, and management said the shift in the region is profound, with strengthening demand trends.

In Q&A, Machlis expanded that point, highlighting Germany, Scandinavia and the Baltics as especially active opportunity zones. He paired that with Elbit’s long-standing local-production model, saying the company’s network of subsidiaries helps it embed into national defense ecosystems.

ESLT Expands Capacity and Deal Activity

Management also made clear that capacity is now a strategic priority. Machlis said Elbit is increasing capital spending in Israel and Europe, with a new Southern Israel facility progressing, a Romanian unmanned aerial system site launched and the UTACS acquisition in the U.K. completed.

Kagan added in the Q&A that Elbit expects CapEx to run at about 3% of revenue in the near future, with spending focused heavily on land-domain facilities, robotics, and automation following a multiyear ERP buildout.

Capital deployment is not stopping at organic investment. Kagan said the balance sheet remains strong, dividends have doubled to $1 a share, and management is actively pursuing further acquisitions to deepen the portfolio after the UTACS deal.

Elbit Leans Into AI and Counter-UAS

One of the more important thematic takeaways came in the discussion of anti-drone systems. Responding to a Morgan Stanley analyst, Machlis said Elbit’s counter-UAS offering extends well beyond high-power laser, combining radars, electro-optics, jammers, kinetic tools and AI-driven battle management.

That exchange added useful detail to the prepared remarks, where Kagan had already said R&D spending rose to 6.9% of revenues as Elbit prioritizes AI, autonomous systems, multispectral sensing and precision munitions.

Machlis also said Elbit is already deploying counter-drone systems in Israel and Europe, making this one of the clearest areas where technology investment, current demand and future order potential are lining up.

ESLT Signals Growth With Margin Focus

The strongest forward-looking statement came when Kagan said Elbit’s internal target remains around mid-teens revenue growth this year and that management sees the same for next year based on demand and order conversion.

He also told a Jefferies analyst that Land should lead segment growth through the rest of the year, with strong demand also continuing in ISTAR, C4I and Elbit Systems of America.

Margins were the other key thread. Kagan and Machlis both stressed that expanding profitability remains a company priority, supported by scale, product mix, automation and disciplined capital spending.

Elbit Leaves the Call in Expansion Mode

The overall tone of the call was assertive but operationally grounded. Machlis repeatedly returned to execution, local presence and capacity expansion rather than treating the current order environment as a short-term windfall.

That posture was reinforced when management said supply chain bottlenecks have largely eased and labor availability is not a major constraint, even as the company recruits roughly 2,000 people again this year.

Zacks Signals on ESLT

The provided Zacks data shows ESLT carries a Zacks Rank #2 (Buy) with Value Score D, Growth Score C, Momentum Score C and VGM Score D. In Zacks terms, the Rank points to favorable estimate-revision momentum over the next one to three months, while the Style Scores indicate the stock is not screening as especially strong on value, growth or momentum factors versus higher-scoring names. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

That mix suggests the estimate trend is constructive, but the stock does not stand out as a top Style Score candidate. Under the Zacks framework, the strongest combinations typically pair a Zacks Rank #1 or #2 with Style Scores or a VGM Score of A or B, and that ranking can still change as analysts revise estimates after the quarter.