01—Abstract
Summary
Summary of the 10-K filed January 27, 2026. Cited figures are marked; the original filing is the authoritative source.
Northrop Grumman Corporation (NOC) reported solid performance for the fiscal year ending December 31, 2025, with total sales reaching $41.95 billiona, a 2% increase year-over-year.
The company's backlog remained robust at $95.7 billionb, indicating strong demand for its advanced aerospace and defense solutions. Net earnings were $4.18 billion, largely in line with the previous year, supported by a $231 million pre-tax gain from the divestiture of its training services business and positive mark-to-market pension adjustments.
The company's strategic focus on key national security priorities, including space systems, military aircraft, missile defense, and advanced weapons, continues to drive growth across its major segments, particularly in Mission Systems and Defense Systems. Despite some program-specific challenges, such as the B-21 Raider program, Northrop Grumman's diversified portfolio and strong customer relationships with the U.S. government (representing 84%c of sales) position it favorably in the evolving global security landscape.
02—Key points
Key Highlights
- Total sales reached $41.95 billion, a 2% increase from the prior year, driven by growth in Mission Systems and Defense Systems.
- Backlog remained strong at $95.7 billion, up 5% from the previous year, signaling continued demand for its products and services.
- Net earnings were $4.18 billion, reflecting stable profitability despite a significant B-21 program loss provision recognized earlier in the year.
- The company successfully divested its Immersive Mission Solutions (IMS) training services business for $333 million, realizing a pre-tax gain of $231 million.
- Segment operating income saw contributions from Mission Systems (up 14%) and Defense Systems (up 22%), while Aeronautics Systems experienced a decline due to the B-21 provision.
- Free cash flow increased significantly by 26% to $3.31 billion, demonstrating strong cash generation capabilities.
- Northrop Grumman continued its commitment to shareholder returns, with share repurchases and dividends totaling $2.9 billion in 2025.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2025filed January 27, 2026Financial Statements
FY2025 against FY2024
| Line item | FY2025FY2024 | Change |
|---|---|---|
| Revenue | $41.95B$41.03B | +2.2% |
| R&D Expenses | $1.10B$1.10B | 0.0% |
| Operating Expenses | $37.67B$36.66B | +2.8% |
| Operating Income | $4.51B$4.37B | +3.2% |
| Net Income | $4.18B$4.17B | +0.2% |
| EPS (Basic) | $29.14$28.39 | +2.6% |
| EPS (Diluted) | $29.08$28.34 | +2.6% |
| Shares Outstanding (Basic) | 143.50M147.00M | −2.4% |
| Shares Outstanding (Diluted) | 143.80M147.30M | −2.4% |
05—Questions
Frequently Asked Questions
What is Northrop Grumman's primary customer base?
Northrop Grumman's primary customer is the U.S. government, which accounted for 84% of its sales in 2025. The company also serves international customers.
How did the B-21 Raider program impact financial results?
The B-21 Raider program incurred a $477 million loss provision in the first quarter of 2025, which negatively impacted the Aeronautics Systems segment's operating income and margin rate for the year. Despite this, the company continues to engage in discussions for potential production rate acceleration.
What is the company's outlook based on its backlog?
The company's backlog of $95.7 billion at the end of 2025 indicates a strong pipeline of future work. Approximately 35% of this backlog is expected to be recognized as revenue over the next 12 months, and 60% over the next 24 months, suggesting sustained revenue generation.
Has Northrop Grumman undertaken any significant corporate actions in 2025?
Yes, in May 2025, Northrop Grumman completed the sale of its training services business (Immersive Mission Solutions) for $333 million. Additionally, the company renewed its credit facilities and issued $1.0 billion in unsecured senior notes for general corporate purposes.
06—Continue