Northrop Grumman (NOC) investor relations material

Industry environment and demand trends

• Defense sector experiencing heightened U.S. and global demand, driven by recapitalization and increased focus on sovereign defense and peace through strength.

• U.S. and allies are prioritizing modernization, with significant funding increases and new opportunities in areas like Golden Dome and nuclear triad recapitalization.

• Consistent U.S. defense priorities over the past decade, with new emphasis on homeland defense and supporting allies, especially in Europe.

• International business is a key growth area, with 18% year-over-year growth and expectations for continued double-digit expansion.

• Escalating global threat environment is driving demand but also raising concerns about global stability.

Program updates and growth outlook

• Over $13 billion invested in R&D and CapEx in recent years to build capacity and readiness for new opportunities.

• Golden Dome program involves both existing and new capabilities, with parallel development and acquisition strategies.

• B-21 Raider and Sentinel programs are receiving increased funding, with discussions underway to accelerate production and fielding.

• Sentinel program restructuring aims to reduce costs and accelerate progress, with recent design breakthroughs improving certainty and profitability.

• F-35 program outlook remains stable, with strong international demand and ongoing modernization and sustainment activities.

International strategy and portfolio management

• International growth is broad-based, especially in defense systems (integrated air and missile defense, tactical missiles) and mission systems (sensors, electronic warfare).

• Go-to-market strategy emphasizes local partnerships to integrate products into sovereign offerings, tailored by country and product line.

• International business is expected to be accretive to margins and outpace domestic growth, though no specific sales mix target is set.

• Recent portfolio realignments aim to create synergies and leverage expertise across business units, supporting lifecycle management and engineering efficiency.

• Ongoing portfolio review may lead to minor divestitures, but major changes or M&A are not anticipated in the near term.