AI Takeaway
Northrop Grumman (NOC) delivered steady FY2025 results with revenue growing 2.2% to $41.95B and net income essentially flat at $4.18B, supported by strong operating cash flow of $4.76B and disciplined balance sheet management.
Revenue
$41.95B
++2.24% YoY
EPS (Basic)
$29.14
++2.64% YoY
Operating Income
$4.51B
++3.23% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-K filing
NOC grew total revenue by 2.2% YoY to $41.95B in FY2025, reflecting continued demand across its defense and government services portfolio. The growth was steady but measured, consistent with the company's large-scale, long-cycle contract base.
Source: Source: 10-K Income Statement (XBRL Financial Data)
Operating income rose 3.2% to $4.51B, pushing operating margin slightly higher to 10.75% from 10.65% in the prior year. This marginal improvement reflects disciplined cost management despite inflationary pressures common in the defense sector.
Source: Source: 10-K Income Statement (XBRL Financial Data)
Operating cash flow increased 8.4% YoY to $4.76B, significantly outpacing net income growth of 0.2%, indicating high-quality earnings with strong cash conversion. This provides NOC with substantial financial flexibility for capital allocation.
Source: Source: 10-K Cash Flow Statement (XBRL Financial Data)
2 more insights available
Upgrade to unlockNOC carries $15.70B in long-term debt against $16.67B in stockholders' equity, resulting in a debt-to-equity ratio of approximately 2.08x. While the company generates strong cash flows, elevated leverage increases vulnerability to interest rate changes and limits financial flexibility in downturns.
Source: Source: 10-K Balance Sheet (XBRL Financial Data)
Unlock 4 more detailed risk analysis
Upgrade to unlockReported EPS of $7.23 versus the $7.04 analyst consensus — a +2.8% beat for FY2025.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $41.95B | $41.03B | +2.24% |
Operating Income | $4.51B | $4.37B | +3.23% |
Net Income | $4.18B | $4.17B | +0.19% |
EPS (Basic) | $29.14 | $28.39 | +2.64% |
EPS (Diluted) | $29.08 | $28.34 | +2.61% |
R&D Expense | $1.1B | $1.1B | 0.00% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $51.38B | $49.36B | +4.09% |
Current Assets | $15.29B | $14.27B | +7.10% |
Total Liabilities | $34.7B | $34.07B | +1.86% |
Current Liabilities | $13.88B | $14.13B | -1.74% |
Stockholders' Equity | $16.67B | $15.29B | +9.05% |
Cash & Equivalents | $4.4B | $4.35B | +1.15% |
Long-Term Debt | $15.7B | $16.27B | -3.55% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $4.76B | $4.39B | +8.41% |
Investing Cash Flow | $-1.16B | $-1.75B | +33.96% |
Financing Cash Flow | $-3.55B | $-1.4B | -154.62% |
Share Buybacks | $1.62B | $2.51B | -35.40% |
D&A | $1.47B | $1.37B | +7.45% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Margin | 10.8% | 10.6% | +0.10% |
Net Margin | 10.0% | — | — |
ROE | 25.1% | — | — |
ROA | 8.1% | — | — |
Current Ratio | $1.101 | — | — |
Debt to Equity | $2.081 | — | — |
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Northrop Grumman's revenue grew 2.2% YoY to $41.95B in FY2025, up from $41.03B in the prior year. The growth reflects continued demand from U.S. government defense programs, though the pace was modest given the large contract base and long program cycles.
NOC delivered stable FY2025 results with revenue of $41.95B, operating income of $4.51B, and net income of $4.18B, while generating strong operating cash flow of $4.76B. Operating margin improved slightly to 10.75%, and the company reduced long-term debt by 3.6% to $15.70B, signaling disciplined financial management.
NOC's balance sheet shows total assets of $51.38B, stockholders' equity of $16.67B, and long-term debt of $15.70B, with a debt-to-equity ratio of approximately 2.08x. The current ratio of 1.10x and operating cash flow of $4.76B indicate adequate liquidity and strong cash generation to service obligations.
Key risks for NOC include heavy dependence on U.S. government defense appropriations, elevated financial leverage with a debt-to-equity ratio above 2x, and flat R&D spending at $1.10B that could limit long-term competitive differentiation. Additionally, net income growth of only 0.2% despite 2.2% revenue growth suggests ongoing cost pressures.
NOC spent $1.62B on share repurchases in FY2025, a significant decline of 35.4% from $2.51B in the prior year. The reduction in buybacks appears to reflect a prioritization of debt repayment, as total financing outflows increased sharply to $3.55B from $1.40B.