Northrop Grumman Corporation · NYSE:NOC
Northrop Grumman — Q2 2025 Earnings Presentation
18 slides from Northrop Grumman's earnings presentation, Jul 22, 2025
Slide 1: Second Quarter 2025 Conference Call
Second Quarter Kathy Warden Ken Crews 2025 Conference Call Chair, Chief Executive Officer Corporate Vice President and President and Chief Financial Officer July 22, 2025
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 Global defense demand is increasing significantly Reconciliation bill includes increased funding for missile defense, nuclear triad, and weapons Delivered strong operating performance in Q2 Sales increased 9% sequentially and Segment OM rate1 expanded to 11.8% Expect 2025 organic
Slide 4: Sales
Sales Organic Sales1 Three Months Ended June 30 ($M) 2024 2025 ▲% 2% Aeronautics Systems $3,060 $3,114 2% Defense Systems 1,859 1,991 7% Organic Sales1 Defense Systems 1,787 1,951 9% Mission Systems 2,773 3,157 14% $10,146 $10,311 Space Systems 3,002 2,646 (12)% Intersegment Eliminations (476) (557)
Slide 5: Segment Operating Income and Margin Rate
Segment Operating Income1 and Margin Rate1 +100 Three Months Ended June 30 bps ($M) 2024 2025 ▲% Aeronautics Systems $312 $321 3% Defense Systems 191 253 32% 11.8% Mission Systems 361 441 22% 10.8% Space Systems 304 280 (8)% Intersegment Eliminations (67) (76) Total $1,101 $1,219 11% 2024 2025 Stron
Slide 6: Q2 Diluted EPS Bridge
Q2 Diluted EPS Bridge 28% Q2 2024 Diluted EPS $6.36 Training Services Divestiture1 1.04 Segment Performance 0.80 $8.15 Net Pension2 0.17 $6.36 Unallocated Corporate Expense (0.29) Marketable Securities and Other 0.07 Q2 2025 Diluted EPS $8.15 Q2 2024 Q2 2025 Higher earnings per share driven by dives
Slide 7: 2025 Segment Guidance
2025 Segment Guidance1 As of 7/22/2025 Sales ($B) OM Rate % Aeronautics Systems Low $13 Low to Mid 6% Defense Systems Low $8 Mid 10% Prior: Mid to High 9% Mission Systems Low to Mid $12 Mid 14% Prior: ~$12 Space Systems Mid to High $10 High 10% Prior: ~$11 Intersegment Eliminations ~($2.1) High 13%
Slide 8: 2025 Company Level Guidance
2025 Company Level Guidance1 ($M), except per share amounts As of 7/22/2025 Sales $42,050 — $42,250 Prior: $42,000 — $42,500 Segment operating income2 $4,275 — $4,375 Prior: $4,200 — $4,350 MTM-adjusted EPS2 $25.00 — $25.40 Prior: $24.95 — $25.35 Free cash flow2 $3,050 — $3,350 Prior: $2,850 — $3,25
Slide 9: Summary
Summary Dynamic global defense landscape presents significant opportunities for Northrop Grumman Committed to accelerating development and production of new capabilities with speed Diverse portfolio and strong backlog provides foundation for continued profitable growth Laser focused on performance a
Slide 10: Appendix
Appendix Second Quarter 2025 Conference Call 10
Slide 11: 2025 Supplemental Guidance
2025 Supplemental Guidance1 ($M) As of 7/22/2025 Total Net FAS/CAS pension adjustment2 ~$800 Unallocated corporate expense: Intangible asset amortization and PP&E step-up depreciation ~$(90) Other items ~$(280) Training Services divestiture benefit ~$211 Prior: ~$205 Operating income $4,375 — $4,475
Slide 12: Segment Realignment
Segment Realignment Segment Sales ($M) 2023 2024 Three Months Ended REALIGNED, Total Year Total Year Mar 31 Jun 30 Sep 30 Dec 31 effective July 1, 20241 Aeronautics Systems $10,786 $2,969 $2,963 $2,878 $3,220 $12,030 Defense Systems 8,289 1,990 2,153 2,084 2,333 8,560 Mission Systems 10,895 2,659 2,
Slide 13: Segment Realignment
Segment Realignment 3 Segment Operating Income ($M) 2023 2024 Three Months Ended REALIGNED, Total Year Total Year Mar 31 Jun 30 Sep 30 Dec 31 effective July 1, 20241 Aeronautics Systems $(473) $297 $295 $298 $292 $1,182 Defense Systems 829 187 231 196 252 866 Mission Systems 1,609 378 361 390 469 1,
Slide 14: Non-GAAP Definitions
Non-GAAP Definitions Non-GAAP Financial Measures Disclosure: This presentation contains non-GAAP (accounting principles generally accepted in the United States of America) financial measures, as defined by SEC Regulation G and indicated by a footnote in this presentation. Definitions for the non-GAA
Slide 15: Non-GAAP Reconciliations
Non-GAAP Reconciliations Segment Operating Income and Margin Rate Three Months Ended June 30 Six Months Ended June 30 ($M) 2024 2025 2024 2025 Total sales $10,218 $10,351 $20,351 $19,819 Operating income $1,090 $1,425 $2,161 $1,998 Operating margin rate 10.7% 13.8% 10.6% 10.1% Reconciliation to segm
Slide 16: Non-GAAP Reconciliations
Non-GAAP Reconciliations Free Cash Flow Three Months Ended June 30 Six Months Ended June 30 ($M) 2024 2025 2024 2025 Net cash provided by (used in) operating activities $1,425 $868 $719 $(697) Capital expenditures (320) (231) (590) (487) Free cash flow $1,105 $637 $129 $(1,184) Second Quarter 2025 C
Slide 17: Non-GAAP Reconciliations
Non-GAAP Reconciliations Organic Sales Three Months Ended June 30 Six Months Ended June 30 % % ($M) 2024 2025 Change 2024 2025 Change Sales $10,218 $10,351 1% $20,351 $19,819 (3)% Less: Training services sales (72) (40) (156) (112) Organic Sales $10,146 $10,311 2% $20,195 $19,707 (2)% Second Quarter
Slide 18: Second Quarter 2025 Conference Call
Second Quarter 2025 Conference Call 18