With a record backlog and several major signed deals for air-defense solutions, Israel Aerospace Industries (IAI) is shifting away from single platforms toward fully integrated, multi-domain solutions to protect Israel and its global customers.
IAI chairman Boaz Levy told The Magazine that the company no longer develops platforms as isolated systems, but as layers of a single operational network designed to increase resilience and security. The approach has shaped recent upgrades across the company’s missile-defense, radar, and unmanned-aircraft programs.
“The defense industry is moving from an era of products to an era of multi-systems solutions that think, communicate, and operate together. When multiple threats come from different directions at the same time, decisions must be made very quickly,” Levy said. “IAI’s technologies across all domains – space, air, sea, land, electromagnetic spectrum, cyber, and AI – are part of a holistic solution, from the satellite to the forces on the ground.”
Integrated air-defense programs
Europe has increasingly turned to Israeli air defense technology over the past decade, especially after Russia invaded Ukraine, leading to a growing demand for rapid, combat-proven systems. IAI’s integration strategy is central to several major European air-defense programs.
Last month, the Defense Ministry signed a €3 billion defense agreement with Greece for the Achilles Shield program. It is one of the largest defense export agreements in Israel’s history and the first time Israel will deliver an end-to-end air-defense array to another country.
Signed in Tel Aviv by Maj.-Gen. (Res.) Amir Baram, director-general of the Defense Ministry, and Ioannis Bouras, his Greek counterpart, the agreement marks a significant expansion of bilateral defense cooperation and places Israeli missile defense systems as the backbone of Greece’s long-term air defense modernization program.
The project will integrate several Israeli-made systems into a unified national network. At its core are BARAK MX, David’s Sling, and SPYDER missile defense systems developed by Israeli defense companies and already deployed operationally within Israel’s own air defense array.
The package also includes MMR radars produced by IAI subsidiary ELTA for air surveillance coverage and a new national command-and-control system developed by Rafael to integrate all layers into a single operational picture.
Germany has purchased and deployed IAI’s Arrow 3 as a response to Russia’s war against Ukraine and the growing proliferation of advanced missile systems. Germany signed the $3.5 billion Arrow 3 contract in November 2023, the largest defense deal in Israel’s history at the time. In December, the two countries signed an additional $3.1b. follow-up contract to expand interceptor and launcher stocks.
The Arrow program, long a cornerstone of Israel’s defense posture, continues to evolve to meet new threats, with engineers racing to stay ahead of adversaries’ capabilities. Arrow 3 is a highly maneuverable system designed to provide ultimate air defense by intercepting ballistic missiles when they are still outside the Earth’s atmosphere. The company’s Arrow 2 and Arrow 3 have been used extensively during the past few years, intercepting countless ballistic missiles fired toward Israel by Iran and the Houthis in Yemen.
That operational experience from recent conflicts provided real-time feedback and has already led to updates across the Arrow program, including radar integration and interceptor production.
Last year, then IAI CEO and now chairman Boaz Levy, who is considered the founding father of the Arrow 3, told The Jerusalem Post that the Arrow 4 will provide even better interception capabilities.
“When we plan for a new [military] campaign, we look at the solutions for the threats of tomorrow, and not only on the existing threats. In this way we advance our response to the varying threats. This is exemplified in the Arrow 4 system, which will replace Arrow 2.”
“The Arrow 3 and the new Arrow 4 system will bring new and advanced interception capabilities against aerial targets. With Arrow 4, we will elevate the success of Israeli interception capabilities,” said the then IAI chief, adding that “we have to be ready for the next war. A lot of lessons were learned, and many changes were made in the systems. We always look two steps ahead to future threats.”
The platform is becoming a network
As the modern battlefields become more complex and interconnected, defense customers are requiring companies such as IAI to provide solutions that are capable of integrating multiple capabilities, not just one specific product or platform.
IAI has therefore shifted from beyond individual platforms or standalone systems toward integrated, multi-domain solutions that connect sensors, intelligence, communications, autonomous capabilities, air and missile defense, and more.
These transformations reinforce each other.
IAI is Israel’s national space house, with the company leading the Israeli national space program for over four decades. The company develops and produces both observation satellites and space communications satellites.
Levy noted that the company is currently developing the next generation of solutions designed to maximize the availability of data from space by leveraging advanced AI algorithms and distributing it to all users through a unique communications network.
IAI’s unmanned systems also remain an important part of the company’s portfolio. The Heron family, for example, continues to provide intelligence, surveillance, and reconnaissance capabilities to customers around the world, with the company adapting the platform through new sensors, payloads, and endurance requirements.
Electronic warfare and radar integration
But newer systems increasingly combine capabilities that once might have been associated with separate platforms. At the Farnborough Airshow this past July, IAI unveiled ELLYON, its newest next-generation multi-role aircraft designed to operate from stand-off ranges of hundreds of kilometers, allowing it to influence contested environments while remaining outside the reach of hostile threats.
According to the company, the aircraft integrates electronic attack capabilities across the electromagnetic spectrum with advanced SIGINT (Signals Intelligence) and ISTAR (Intelligence, Surveillance, Target Acquisition, and Reconnaissance) capabilities. It also has long-range SAR/GMTI radar, electro-optical sensors, and satellite communications, creating a unified platform capable of both gathering intelligence and shaping the electromagnetic battlespace.
Levy said the aircraft reflects the company’s broader development philosophy: combining intelligence, electronic warfare, and mission management into a single platform rather than separate systems.
The ELLYON multi-mission aircraft, he said, “continues the tradition of combining technological innovation with proven operational experience, unifying advanced intelligence, electronic warfare, and mission management into a single airborne platform that provides significant operational advantage in evolving combat arenas.”
The result is not simply an aircraft carrying a collection of sensors. It is a system designed to gather intelligence, manage missions and operate in the electromagnetic battlespace at the same time
As modern battlefields become more interconnected, a radar is no longer valuable only for what it can detect. Its value increasingly depends on how quickly that information can be shared, interpreted, and acted on.
The same goes for an interceptor like the Arrow, an EW system, or a UAS; they are only as effective as the data generated and shared from another platform on the network.
IAI’s ELTA group’s MMR radars already form a critical part of Israel’s air-defense architecture, and 250 systems have been exported to multiple countries since it was first unveiled.
IAI says the integration of radar, electronic warfare, and command-and-control is becoming a core requirement for both domestic and international customers. From October 2023 to June 2025, the radar detected around 40,000 aerial threats targeting Israel, around 10,000 of which were categorized as real concrete threats and shot down with the MMR’s assistance.
The electromagnetic environment is also becoming a battlefield in its own right. An air-defense network must be able to detect a threat, identify it, track it, and determine how best to respond, even when the electromagnetic environment itself is contested.
International expansion
With countries rearming around the globe, IAI’s presence in international markets continues to grow. In 2024, Israel’s defense exports stood at $14.8 billion, followed by $19.2 b. in 2025, marking five consecutive years of growth. Its Systems, Missiles and Space group leads, followed by the ELTA group.
The significant activity of the company has led it to focus on establishing a sustained presence in strategic countries and becoming part of the local defense ecosystem. IAI has done so in the United States, India, and Germany, where it has cemented long-term partnerships with those governments, as well as militaries and local industries.
IAI’s global strategy has led to a growing number of joint ventures, technology partnerships, and local industrial cooperation, allowing it to respond more effectively to different and evolving operational environments and requirements.
The knowledge accumulated by the company through that long-term engagement with global customers who are also facing hostile threats along their borders feeds back into the development and adaptation of various defense technologies.
“Modern battlefields are undergoing a major shift, with civilian and security organizations increasingly involved.
Cooperation among allies is critically important, in times of peace and in times of conflict alike. Defense arsenals can be distributed across several countries, building shared resilience and capabilities that can be used optimally, either together or separately,” Levy told The Magazine.
And as the company continues to expand, it, along with a handful of other Israeli defense companies, will attend the Marrakesh Airshow for the first time in early October. Since the Abraham Accords, the North African kingdom has turned into a significant customer for Israeli companies, especially IAI.
IAI plans to showcase a variety of systems at the Marrakesh Air Show, including BARAK, LORA, Heron MK II, OPAL collaborative-combat technology, and communications satellites. The company aims to pursue industrial cooperation and technology transfer with Moroccan partners.
IPO a ‘natural and necessary’ step for the future
IAI’s order backlog has grown significantly over the past year, driven by domestic procurement and several large export agreements. Some reports even state that it’s been the most profitable in the company’s history.
According to the company’s financial results for H1 and Q2 2026, it reached a record backlog of $35 billion in the first half of 2026, representing approximately 4.7 years of activity. Sales reached $4.275 b. in the first six months of the year, up from $3.228 b. in the first half of 2025, while net income rose 40% to approximately $449 million.
Levy said that the company’s IPO “is a natural and necessary next step, given the growing global demand for the company’s systems and the excellent financial results we have achieved in recent years.
The offering will mark a milestone for the company’s employees, the government of Israel, and the capital markets, and it will make a significant contribution to strengthening Israel’s national security and economy.”
The company’s development programs are being shaped by assessments from the Defense Ministry and the IDF regarding the types of threats Israel is expected to face in the coming years.
“It’s a new technological era where AI capabilities and human thinking out of the box will bring additional solutions to the user, utilizing effective tools that will reduce the time to market and the product cost,” stated Levy.
Levy said IAI is preparing for a future battlefield increasingly defined by multi-domain integration, electronic warfare, AI-driven capabilities, and long-range precision threats. Israel’s future defense posture, he continued, relies on systems that can operate together across air, land, sea, space, cyber, and electronic domains.
“The defining capability of the next generation will be connectivity: connecting sensors to intelligence, intelligence to decisions, and decisions to actions. By bringing our capabilities together across all domains, we can shift from delivering individual technologies to delivering outcomes, providing our customers with an integrated solution designed around the mission from the start,” he said.
“The most important innovation is not a new platform or a new technology. It is the ability to accomplish missions in ways that were previously impossible.”
This article was written in cooperation with IAI.