CI Systems: How Much of the Growth Still Depends on Elbit and the Defense Backlog

What This Follow-up Is Testing

The main article argued that 2025 was a proof year: revenue came back, microelectronics showed real spark, but the quality of the step-up was still the open question. This follow-up strips the story down to the current engine of visibility, not the longer-term option value. The narrower question is straightforward: how much of the recovery already depends on the defense-science segment, how much of it is tied to Elbit, and how much of 2026 is already visible through backlog.

The short answer is fairly blunt. At the consolidated level, 2025 was still much more of a defense year than a diversification year. The defense-science segment delivered $37.4 million, about 77% of total sales, and roughly 72% of the annual increase in revenue. At the same time, Elbit Group alone accounted for 21.9% of consolidated sales, or about $10.6 million. The backlog reinforces that same reading: by year-end 2025, about 90.5% of consolidated backlog came from defense-science, and by March 18, 2026 that share had already moved up to about 91.9%.

But there is one important nuance. In the fourth quarter, microelectronics actually drove most of the marginal growth. Out of the $5.0 million increase in quarterly revenue, about $3.2 million came from microelectronics and only about $1.8 million came from defense. So if the question is what financed 2025, the answer is defense. If the question is what could dilute concentration later, the answer already sits in microelectronics. The problem is that backlog still does not confirm that handoff.

What matters here is not simply that CI Systems reports three segments. It is which segment is carrying the company right now. At the levels of revenue and backlog, CI Systems has not yet reached the point where it can be read as a genuinely diversified revenue base. It does have a diversification option, but as of 2025 and early 2026 that option remains much smaller than the defense engine.

Where Elbit Actually Sits in the Numbers

The concentration is not just sectoral. It also sits on a named customer. In defense-science, the company discloses two customers that were above 10% of consolidated sales in at least one of the past three years. In 2025, Customer A, Elbit Group in Israel and abroad, reached 21.9% of consolidated sales. The company also translates that into an absolute number: about $10.6 million. Customer B added another roughly $2.2 million, or 4.5% of sales.

That Elbit number changes the reading of the whole company. Against $37.4 million of defense-science revenue, Elbit alone represents roughly 28% of segment sales. The two largest customers together represent about 34% of segment sales and about 26% of consolidated revenue. That is no longer footnote noise. It is a concentration layer that materially shapes how both growth and risk should be read.

There is also a less obvious finding here. In 2024, Elbit's share was 13.7% of consolidated sales. Using the disclosed percentage against that year's consolidated revenue, that points to roughly $4.6 million. On that basis, the increase attributable to that named customer alone was roughly $6.0 million in 2025. That equals about 40% of total company growth for the year and more than half of defense-segment growth. This is the point where a large customer stops being just a commercial advantage and becomes part of the macro explanation for the year itself.

Elbit's identity matters for another reason: it sits exactly where the year moved forward. The company says defense growth in 2025 came mainly from Israel and Europe, while defense sales in Israel jumped to $15.46 million from $7.49 million a year earlier. That does not mean all of that jump was Elbit. The filing does not say that. But it does strengthen the broader reading that the largest named customer, the dominant segment, and the geographies that pushed the year higher all sit in the same gravity field.

This is also where concentration starts to change the cash reading, not just the revenue reading. The company says receivables rose by $3.383 million, mainly in defense-science. At the same time, payment terms for the two largest defense customers range from advance payment to net 120 days. The filing does not tie the receivables increase specifically to Elbit, so that claim cannot be made. But it is clear enough that customer concentration in a segment with relatively long credit terms changes the risk profile: the same growth can look strong in the income statement and still come through more slowly in cash.

What the Backlog Really Covers in 2026

This is where the picture becomes even sharper than the top line. At the end of 2024, defense backlog stood at $27.7 million. By the end of 2025 it had reached $29.5 million, and by March 18, 2026 it was already $31.5 million. The core engine did not just finish a strong year. It entered the next one with a thicker layer of work in hand.

The quarterly breakdown matters more than the headline number. Out of the $31.5 million defense backlog on March 18, 2026, about $2.15 million was scheduled for Q1, about $8.80 million for Q2, about $9.75 million for Q3 and about $7.69 million for Q4. Only about $3.14 million was pushed out to 2027 and beyond. In other words, roughly $28.4 million, about 90% of defense backlog at that date, was already mapped into 2026.

At the company level, the result is close to extreme. If one counts only what is already mapped to defined 2026 buckets, the company entered mid-March with at least about $30.3 million visible for the current year: about $28.4 million from defense, about $1.92 million from microelectronics in Q1 and Q2, and another $18 thousand in SENSING. Under that reading, about 94% of the revenue already anchored on the 2026 calendar comes from defense.

If one goes one step further and also includes the $827 thousand in microelectronics that the company estimates will still be delivered during 2026, even though it does not assign a quarter to it, total 2026 coverage rises to about $31.2 million. Even then, about 91% of that coverage still depends on defense. That is why the conclusion here is not simply that backlog looks good. The real conclusion is that 2026 backlog is, in practice, a defense backlog, with a micro layer that is still too small to change the weighting.

The missing part matters as much as the visible part. The company discloses backlog by segment, not by customer. So it is possible to say with high confidence that 2026 visibility is defense-heavy. It is not possible to say from this filing how much of the $31.5 million defense backlog belongs specifically to Elbit. That is the disclosure boundary. Anyone presenting 2026 backlog as if it were Elbit backlog is going beyond the evidence. Anyone ignoring Elbit's sales weight is missing a central part of the story.

Why This Changes the Read on CI Systems

The message for a serious reader should work in two steps. First, there is no reason to pretend the company is already diversified. In 2025 and early 2026, the backbone of CI Systems is defense-science, and within that backbone there is one very large customer, Elbit. That is not automatically negative. In fact, it is also the reason the company looks sturdier today than it did two years ago. But it is very clearly a concentration that needs to be weighted properly.

Second, the reader also needs to watch where that concentration could start to dilute. The fourth quarter already provided a first sign: microelectronics reached $5.5 million, about 36% of quarterly revenue, and generated roughly two thirds of quarterly growth. That matters because it is exactly the path through which CI Systems could move from a company with one dominant defense engine to a company with a more balanced revenue base. The problem is that backlog has not validated that shift yet. In microelectronics, backlog stood at $3.0 million at the end of 2024, fell to $2.75 million at year-end 2025, and was still $2.75 million on March 18, 2026.

That is why the thesis here still needs discipline. Right now, defense funds the visibility, while micro is trying to fund the next chapter. Until micro backlog starts to grow, and until Elbit's weight starts to dilute inside a company that is still growing, it is hard to argue that CI Systems has already moved from concentrated recovery into broad-based growth.

Bottom Line

CI Systems' growth still depends far more on defense backlog than a superficial reading of three segments would suggest. Defense delivered most of 2025 revenue, most of the annual increase, and almost all of the visibility already sitting on the 2026 calendar. At the same time, Elbit alone already represents more than one fifth of consolidated sales and almost one third of defense-segment revenue.

That does not negate the microelectronics option. If anything, the fourth quarter shows exactly why the market keeps watching WETALYZER. But until micro starts turning first sales into fresh backlog, and until the largest customer's weight starts to fall without slowing the company down, the correct reading remains disciplined: CI Systems is clearly stronger today, but 2026 still rests on defense, and on one customer that is too large to dismiss as just another material account.