Government company developing & producing air, space, sea, land systems.
IAI exited 2025 with exceptional defense demand and a record backlog, but the real 2026 test is whether it can convert that load into revenue and cash without letting working capital, dividends, and labor costs eat into the advantage.
In 2025 IAI showed strong labor leverage, but the peak year still does not reveal a stable labor-cost base: demand and staffing growth sat alongside a temporary salary cut, a new bonus layer, paid shutdown days, and a broad wage settlement that is not yet fully closed.
The Germany-Arrow thread lengthens and deepens IAI’s Missiles and Space backlog through 2030, but it adds very little weight to 2026. That improves long-duration visibility while layering more work onto an original German program that was already 52% complete at the end of 2025.
At IAI in 2025, cash is getting stuck mainly after billing and before collection. Inventory is not the core problem, and contract assets are not the main incremental drag either. The sharp change is in receivables, just as the company is also committing to a $242 million dividen…
