AI Takeaway
Lockheed Martin (LMT) delivered solid FY2025 revenue growth of 5.6% to $75.0B and strong operating cash flow of $8.6B, but net income declined 6.0% to $5.0B, partly offset by a 25% jump in R&D spending and higher interest costs on elevated long-term debt of $21.7B.
Revenue
$75.05B
++5.64% YoY
EPS (Basic)
$21.56
-3.71% YoY
Gross Margin
10.2%
++0.40% YoY
Operating Income
$7.73B
++10.24% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-K filing
Total revenue grew 5.6% year-over-year to $75.0B in FY2025 (from $71.0B in the prior year), reflecting sustained demand for defense programs across Lockheed Martin's business segments, consistent with elevated global defense budgets.
Source: Source: 10-K Income Statement
Operating income rose 10.2% to $7.73B, with operating margin improving approximately 43 basis points to 10.3%, indicating better cost discipline and program execution relative to revenue growth.
Source: Source: 10-K Income Statement
Net income fell 6.0% to $5.02B (from $5.34B), suggesting that below-the-line items such as higher interest expense on $21.7B in long-term debt and/or tax impacts offset strong operating performance.
Source: Source: 10-K Income Statement & Balance Sheet
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Upgrade to unlockLockheed Martin carries $21.7B in long-term debt against stockholders' equity of only $6.7B, resulting in a debt-to-equity ratio of approximately 7.9x. This elevated leverage increases interest expense, which is a key contributor to the gap between operating income ($7.73B) and net income ($5.02B), and limits financial flexibility in a rising-rate environment.
Source: Source: 10-K Balance Sheet
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Upgrade to unlockReported EPS of $7.43 versus the $5.76 analyst consensus — a +29.0% beat for FY2025.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $75.05B | $71.04B | +5.64% |
Cost of Revenue | $67.43B | $64.11B | +5.17% |
Gross Profit | $7.62B | $6.93B | +9.94% |
Operating Income | $7.73B | $7.01B | +10.24% |
Net Income | $5.02B | $5.34B | -5.98% |
EPS (Basic) | $21.56 | $22.39 | -3.71% |
EPS (Diluted) | $21.49 | $22.31 | -3.68% |
R&D Expense | $2B | $1.6B | +25.00% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $59.84B | $55.62B | +7.59% |
Current Assets | $25.36B | $21.85B | +16.08% |
Total Liabilities | $53.12B | $49.28B | +7.78% |
Current Liabilities | $23.34B | $19.42B | +20.16% |
Stockholders' Equity | $6.72B | $6.33B | +6.13% |
Cash & Equivalents | $4.12B | $2.48B | +65.97% |
Long-Term Debt | $21.7B | $20.27B | +7.05% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $8.56B | $6.97B | +22.73% |
Investing Cash Flow | $-1.98B | $-1.79B | -10.32% |
Financing Cash Flow | $-4.94B | $-4.14B | -19.40% |
Share Buybacks | $3B | $3.7B | -18.92% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Gross Margin | 10.2% | 9.8% | +0.40% |
Operating Margin | 10.3% | 9.9% | +0.43% |
Net Margin | 6.7% | — | — |
ROE | 74.6% | — | — |
ROA | 8.4% | — | — |
Current Ratio | $1.087 | — | — |
Debt to Equity | $7.903 | — | — |
Other companies in Aerospace & Defense
LMT reported FY2025 revenue of $75.0B, up 5.6% year-over-year, with operating income growing 10.2% to $7.73B. However, net income declined 6.0% to $5.02B, likely due to higher interest costs on the company's $21.7B long-term debt load.
Despite revenue growing 5.6% and operating income rising 10.2%, LMT's net income dropped 6.0% to $5.02B, suggesting significant below-the-line headwinds such as higher interest expense on $21.7B in long-term debt. The gap between operating income ($7.73B) and net income ($5.02B) of over $2.7B points to substantial financing and/or tax costs.
LMT generated $8.56B in operating cash flow in FY2025, a 22.7% increase from the prior year. After accounting for investing outflows of approximately $1.98B, estimated free cash flow was roughly $6.6B, providing strong capacity for shareholder returns and debt management.
LMT increased R&D spending by 25% to $2.0B in FY2025, up from $1.6B in the prior year. This significant investment signals the company's focus on next-generation defense technologies, though it adds cost pressure on near-term margins.
The most prominent risks are LMT's high financial leverage — with $21.7B in long-term debt and a debt-to-equity ratio of ~7.9x — which drives substantial interest expense that compressed net income 6.0% despite strong operating results. Additionally, the company's thin gross margin of ~10.2% leaves limited buffer against cost overruns on fixed-price government contracts, and rapidly rising R&D costs (up 25%) could further pressure profitability if new programs face delays.