Lockheed Martin (LMT) Q3 2025 earnings summary

Executive summary

• Achieved record backlog of $179 billion, driven by significant multi-year contract wins and strong demand for key defense systems, especially F-35, CH-53K, and PAC-3 MSE programs.

• Q3 2025 sales reached $18.6 billion, up 9% year-over-year, with net earnings of $1.6 billion and EPS of $6.95, both nearly flat compared to Q3 2024.

• Free cash flow for Q3 was $3.3 billion, supporting investment and shareholder returns, with cash from operations at $3.7 billion.

• Board approved a 5% dividend increase to $3.45 per share, marking 23 consecutive years of dividend growth.

• Returned $1.8 billion to shareholders in Q3 via dividends and share repurchases; $4.6 billion year-to-date.

Financial highlights

• Segment operating profit for Q3 was $2.0 billion, up 9% year-over-year, with segment margins at 10.9%.

• Bookings exceeded $31 billion in Q3, resulting in a 1.7 book-to-bill ratio.

• Free cash flow for Q3 was $3.3 billion, with year-to-date free cash flow at $4.2 billion.

• Cash and cash equivalents at quarter-end were $3.5 billion.

• Gross margin for the quarter was $2.24 billion, up from $2.12 billion year-over-year.

Outlook and guidance

• 2025 sales guidance raised to $74.25–$74.75 billion, implying 5% organic growth.

• Segment operating profit outlook increased to $6.675–$6.73 billion, with a 9% margin midpoint.

• EPS guidance raised to $22.15–$22.35, reflecting higher segment profit and lower tax rate.

• Free cash flow for 2025 expected at $6.6–$6.8 billion, with any excess to pre-fund 2026 pension obligations.

• The company expects to recognize approximately 36% of its $179.1 billion backlog as revenue over the next 12 months.