Northrop Grumman Corporation · NYSE:NOC
Northrop Grumman — Q3 2026 Earnings Presentation
23 slides from Northrop Grumman's earnings presentation, Oct 20, 2026
Slide 1: Third Quarter 2026 Conference Call
OCTOBER 20, 2026 THIRD QUARTER 2026 CONFERENCE CALL KATHY WARDEN JOHN GREENE Chair, Chief Executive Officer Corporate Vice President and President and Chief Financial Officer Photo: Sentinel, vertically assembled
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation and the information we are incorporating by reference, and statements to be made on the earnings conference call, Business and Operational Risks contain or may contain statements that constitute “forward-looking statements” within the meaning of the Priva
Slide 3: Enterprise Summary
Enterprise Summary Continued robust demand generated book-to-bill ratio of ~1.5x and record backlog of $110 billion Outstanding operational performance throughout portfolio drives Q3 segment OM rate1 of 12.1% Completed first vertical stack of full Sentinel Missile, positioning program for first laun
Slide 4: Third Quarter 2026 Financial Highlights
Third Quarter 2026 Financial Highlights Three Months Ended September 30 ($M), except per share amounts 2026 2025 ▲% Backlog 109,597 91,448 20% Sales 11,122 10,423 7% Segment Operating Income1 1,345 1,277 5% Segment Margin Rate1 12.1% 12.3% (20) bps Diluted EPS $7.89 $7.67 3% Capital Expenditures (30
Slide 5: Aeronautics Systems
Aeronautics Systems Sales ($M) Operating Income ($M) and Margin Rate 14% 10.5% 9.7% $3,575 $3,142 $377 $305 Q3 2025 Q3 2026 Q3 2025 Q3 2026 YFQ-48A Talon Blue • Sales: higher F-35 volume, B-21 ramp and B-2 sustainment Successful first • Margin: disciplined program execution across portfolio autonomo
Slide 6: Defense Systems
Defense Systems Sales ($M) Operating Income ($M) and Margin Rate 12% 11.4% 10.8% $2,307 $2,059 $234 $250 Q3 2025 Q3 2026 Q3 2025 Q3 2026 Raid HunterTM • Sales: Sentinel ramp, increased munitions and missile volume Cost-effective C-UAS • Margin: stable program performance, contract mix and missile de
Slide 7: Mission Systems
Mission Systems Sales ($M) Operating Income ($M) and Margin Rate1 2% 16.7% 15.8% $3,093 $3,155 $515 $500 Q3 2025 Q3 2026 Q3 2025 Q3 2026 FORTITUDETM • Sales: increased restricted airborne radar and marine systems volume Designing and developing • Margin: consistently strong program performance drivi
Slide 8: Space Systems
Space Systems Sales ($M) Operating Income ($M) and Margin Rate 2% 11.0% 11.3% $2,698 $2,749 $298 $312 Q3 2025 Q3 2026 Q3 2025 Q3 2026 Proliferated Warfighter Space Architecture • Sales: continued growth on National Security Space programs First 21 Tranche 1 • Margin: solid program execution supports
Slide 9: Q3 Diluted EPS Bridge
Q3 Diluted EPS Bridge +3% Q3 2025 $7.67 Segment Performance 0.43 Federal Tax Rate 0.32 $7.89 Marketable Securities (0.50) $7.67 Net Pension1 and Other (0.03) Q3 2026 $7.89 Q3 2025 Q3 2026 Outstanding segment operating performance across portfolio drives EPS growth 1. Net Pension tax effected on a 21
Slide 10: 2026 Company Level Guidance
2026 Company Level Guidance1 ($M), except per share amounts As of 10/20/2026 Sales $43,750 — $44,250 Segment operating income2 $4,940 — $5,040 Prior: $4,850 — $5,000 MTM-adjusted EPS2 $29.35 — $29.75 Prior: $28.60 — $29.10 Adjusted free cash flow2 $3,100 — $3,500 Building on performance and momentum
Slide 11: 2026 Segment Guidance
2026 Segment Guidance1 As of 10/20/2026 Sales ($B) OM Rate % Aeronautics Systems ~$14 High 9% Prior: Mid to High 9% Defense Systems Mid to High $8 ~10% Mission Systems High $12 Mid 15% Prior: ~15% Space Systems ~$11 Low 10% Intersegment Eliminations ~($2.7) Mid 13% Updated segment guidance1 reflects
Slide 12: 2027 Outlook as of 10/20/2026
2027 Outlook as of 10/20/20261 •Premier portfolio of leading franchise programs •Sales growth of 5% to 7%3 with further acceleration in 2028 •Segment operating margin rate2 expansion of 10 to 20 basis points3 •Adjusted free cash flow2 range of $3.3 to $3.7 billion Enduring strategy and adaptive appr
Slide 13: Disciplined Strategic Execution
Disciplined Strategic Execution Historic global demand environment translating to record company backlog Durable portfolio intentionally and continuously shaped to align with top defense priorities Leader in advanced technology, developing the world’s most important capabilities Building the capacit
Slide 14: Appendix
Appendix Third Quarter 2026 Conference Call 14
Slide 15: 2026 Supplemental Guidance
2026 Supplemental Guidance1 ($M) As of 10/20/2026 Total Net FAS/CAS pension adjustment2 ~$700 Unallocated corporate expense: Intangible asset amortization and PP&E step-up depreciation ~$(65) Other items ~$(300) Prior: ~$(280) Operating income $4,610 — $4,710 Prior: $4,540 — $4,690 Interest expense
Slide 16: Portfolio Well Supported in FY27 U.S. Base Budget Request
Portfolio Well Supported in FY27 U.S. Base Budget Request 2026 FY27 Role on % of Total U.S. Base Budget Key Program Area Program Company Sales1,2 Request 3 National Space Security Mix >15% B-21 Prime ~10% F-35 (Center Fuselage / Sensors / Comms) Sub ~10% Funding Legend Weapons Portfolio Mix ~8% Full
Slide 17: 2027 Net Pension Income Sensitivities ($M)
2027 Net Pension Income Sensitivities ($M) Asset Returns FAS2,3 1.5% 3.0% 4.5% 6.0% 7.5% 0 bps 370 400 435 470 500 Discount 25 bps 340 375 410 440 475 Rate Change5 50 bps 315 350 380 415 450 Current 75 bps 290 320 355 390 420 Prior estimates1 as estimates1 as 100 bps 265 300 330 365 400 of 9/30/2026
Slide 18: 2026 Working Days
2026 Working Days Number of Days in Reporting Period1 2026 2025 First Quarter 61 62 Second Quarter 64 64 Third Quarter 63 63 Fourth Quarter 63 62 Full Year 251 251 1. Quarterly information is labeled using a calendar convention; that is, first quarter is consistently labeled as ending on March 31, s
Slide 19: Non-GAAP Definitions
Non-GAAP Definitions Non-GAAP Financial Measures Disclosure: This presentation contains non-GAAP (accounting principles generally accepted in the United States of America) financial measures, as defined by SEC Regulation G and indicated by a footnote in this presentation. Definitions for the non-GAA
Slide 20: Non-GAAP Reconciliations
Non-GAAP Reconciliations Segment Operating Income and Margin Rate Three Months Ended Nine Months Ended September 30 September 30 ($M) 2026 2025 2026 2025 Total sales $11,122 $10,423 $31,879 $30,242 Operating income $1,269 $1,242 $3,354 $3,240 Operating margin rate 11.4% 11.9% 10.5% 10.7% Reconciliat
Slide 21: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted free cash flow Three Months Ended Nine Months Ended September 30 September 30 ($M) 2026 2025 2026 2025 Net cash provided by operating activities $1,745 $1,557 $1,369 $860 Capital expenditures (306) (301) (775) (788) Proceeds from sale of equipment to a customer 371
Slide 22: Non-GAAP Reconciliations
Non-GAAP Reconciliations Organic Sales Total Company Three Months Ended Nine Months Ended September 30 September 30 ($M) 2026 2025 % Change 2026 2025 % Change Sales $11,122 $10,423 7% $31,879 $30,242 5% Less: Training services sales — — — (112) Organic Sales $11,122 $10,423 7% $31,879 $30,130 6% Def
Slide 23: Third Quarter 2026 Conference Call
Third Quarter 2026 Conference Call 23