Northrop Grumman (NOC) Q4 2025 earnings summary

Executive summary

• Achieved record backlog of $95.7 billion, driven by $46.3 billion in net awards in 2025 and robust global demand.

• 2025 organic sales rose 3% to $42.0 billion, with international sales up 20%.

• Free cash flow for 2025 was $3.3 billion, up 26% year-over-year.

• 2025 financial results met or exceeded guidance, positioning for sustainable growth.

• Strong demand for advanced defense capabilities, with significant investments in capacity and technology to meet U.S. and international needs.

Financial highlights

• Q4 2025 sales were $11.7 billion, up 10% year-over-year; full-year sales reached $42.0 billion, up 3% organically.

• Q4 segment operating income rose 10% to $1.3 billion, with a segment operating margin of 11.2%.

• Q4 adjusted/MTM-adjusted EPS was $7.23, up 13% year-over-year.

• 2025 diluted EPS was $29.08; MTM-adjusted EPS was $26.34.

• Capital expenditures for 2025 totaled $1.45 billion, or 3.5% of sales.

Outlook and guidance

• 2026 sales expected between $43.5–$44.0 billion, representing mid-single-digit growth.

• 2026 segment operating income projected at $4.85–$5.0 billion, with operating margins in the low to mid 11% range.

• 2026 adjusted/MTM-adjusted EPS expected at $27.40–$27.90; free cash flow guidance is $3.1–$3.5 billion.

• Capital expenditures for 2026 projected at $1.65 billion (4% of sales), reflecting increased investment in capacity.

• Growth expected to accelerate through 2026, with momentum carrying into 2027, especially in space and international segments.