In presenting record financial results for 2024, Rafael Advanced Defense Systems CEO Yoav Turgeman has told "Globes" that the main focus for 2025 will be supplying Israel's air defenses with the Iron Beam high energy laser weapon system, as promised.
He says, "We are the first company in the world to bring such an operational laser product. Despite all the challenges, we are meeting our commitment. This is a significant global achievement." The system is expected to be of significant benefit in terms of defense spending. In some cases where until now interceptions have been carried out using the Iron Dome system, whose cost is estimated at about $30,000 per interception, Iron Beam will be used.
Turgeman adds, "Iron Dome provides interception capabilities for a wide range of targets and at a relatively low interception price. Some said there would be a shortage of missiles, but that did not happen, despite tens of thousands of rockets. Those that needed to be intercepted were intercepted. The Iron Beam system will reduce interception costs and increase efficiency, due to interception at the speed of light."
At the same time, one of Rafael's most interesting missile defense systems, which has been operational for several years and brought a unique deal with Finland, is David's Sling. Turgeman says that there will be news about the medium range interception system in the future. "This is a system with exceptional capabilities compared to its counterparts, with a lower price lower than systems that are not as good."
Rafael ended 2024 with record revenue in both the full year and fourth quarter. Revenue in 2024 was NIS 17.8 billion, up 27% from 2023, and the backlog of orders at the end of the year was NIS 64.7 billion, representing 3.6 years work, up 24% from the end of 2023. Half of revenue was from exports.
Israel's defense sales segmentation shows that Rafael's export sales share (46%) in 2024 remains similar to 2023. The most significant increase was in net profit, which jumped 64% to NIS 950 million in 2024. Net profit was affected by Rafael's particularly strong fourth quarter, with NIS 5.4 billion revenue, up 20% from the corresponding quarter in 2023. At the same time, new orders in the fourth quarter alone totalled NIS 11 billion.
Turgeman says, "During the year, we provided the Ministry of Defense with what they traditionally receive from us, but there were also new products. In 2024, we faced mobilization of nearly 20% of employees into the reserves, we suffered rocket and missile attacks, hundreds of employees were evacuated, an education system that was not always operating, and challenging supply chains - and yet, we managed to achieve impressive growth. The backlog of orders could have grown even more, if we had been able to sign additional contracts, and these will be closed in the near future."
Rafael is the biggest employer in the north
As first reported two weeks ago by "Globes," Rafael's trapped profits, which amount to NIS 444 million ($121.2 million), have been approved after lengthy delays. In total, Rafael has transferred dividends to the state to date totaling more than NIS 2.5 billion. Due to the significant growth in demand in the defense sector, Rafael hired about 1,800 new employees in 2024 at the company's plants in Haifa Bay and Gush Segev in the western Galilee, as well as at its development centers in Beersheva, Jerusalem, Tel Aviv and Hadera.
Rafael is now the largest employer in the north of the country, with about 10,000 employees and 20,000 indirect employees. The company's annual purchases from subcontractors amount to NIS 4 billion, mainly in the northern region. "Rafael's local procurement is a growth engine for the Israeli economy and for northern communities in particular," says Rafael chairman Dr. Yuval Steinitz. "Rafael's growth enables exceptional opportunities, which effectively have helped to rehabilitate the north."
Rafael invests about 8% of its total revenue in R&D budgets every year. "We have invested NIS 6 billion in R&D, some of our own money and some from customers who commissioned development," concludes Turgeman, declaring that in 2025 "We will invest about 30% more in R&D."
Published by Globes, Israel business news - en.globes.co.il - on March 26, 2025.
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