Israeli Arms Firms Increase Sales By 16% In 2024 To $16.2B, Arrow-3 Deal Completed With Germany

The total arms revenues of the three companies in the Top 100 based in
Israel increased by 16 per cent to $16.2 billion in 2024. The increase can be
attributed both to Israel’s ongoing military operations in Gaza and high global
demand for Israeli military equipment such as advanced UAV and counterUAV capabilities.

For example, in 2024 Elbit Systems (rank 25) reported that 65 per cent of its $22.6 billion order backlog was from international contracts, including deals with European countries for long-range UAVs. The company’s arms revenues went up by 14 per cent year-on-year to $6.3 billion.

Elbit was awarded more than $5.0 billion in new contracts by the Israeli defence ministry following the onset of Israel’s military campaign in Gaza in October 2023.

Israel Aerospace Industries (IAI) (rank 31) remained Israel’s second largest arms producer. Its arms revenues went up by 13 per cent in 2024 to reach $5.2 billion. In 2024 Rafael (rank 34) increased its arms revenues by 23 per cent to $4.7 billion. The value of its order backlog rose to $17.8 billion as Iran’s large-scale missile attacks on Israel in April and October 2024 pushed demand for Rafael’s military equipment, particularly its missile defence systems, to unprecedented levels.

On Wednesday, Israel will complete the transfer of the Arrow-3 ballistic missile defense system to Germany, Bloomberg reported. This is the first time another country will receive independent access to the advanced military asset. The contract between the Israeli and German governments was signed a little over two years ago and constitutes Israel’s largest defense-export deal ever.

The deal is valued at more than €3.6 billion ($4.2 billion), including launch systems, munitions, and radar, according to the German Defense Ministry. Arrow-3 was one of Germany’s first major procurement agreements following Russia’s invasion of Ukraine in 2022, which prompted European governments to reassess their defense capabilities. For Israel, the system has been a central component in efforts to intercept threats from Iran and the Houthis in Yemen.

The Arrow-3 system, jointly produced by Israel and the United States, will be stationed at the German Air Force base in Holzdorf, about 120 kilometers south of Berlin, and later at additional sites in northwestern and southern Germany. “The system was delivered to Germany on schedule over the past few months, ahead of on-site training for German Air Force officers, despite the challenges caused by the war,” said Boaz Levy, CEO of Israel Aerospace Industries, in an interview.

IAI is the lead contractor for Arrow-3 development, with Rafael and Tomer providing smaller components. “We integrated all the lessons learned during two years of war into the German Arrow system,” Levy said. Israel’s Ministry of Defense stated that Arrow-3 achieved an interception rate of 86 percent during the war with Iran.