Northrop Grumman Corporation · NYSE:NOC
Northrop Grumman — Q3 2025 Earnings Presentation
20 slides from Northrop Grumman's earnings presentation, Oct 21, 2025
Slide 1: Third Quarter 2025 Conference Call
Third Quarter 2025 Conference Call Kathy Warden Ken Crews Chair, Chief Executive Officer Corporate Vice President and President and Chief Financial Officer October 21, 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 Strong demand drove a Q3 book-to-bill ratio of 1.17x Received a $1.8B award for new missile defense capabilities to help defend the homeland Delivered another quarter of outstanding operating performance Q3 organic sales1 increased 5% year-over-year and segment OM rate1 expanded t
Slide 4: Sales
Sales Three Months Ended September 30 Organic Sales1 ($M) 2024 2025 ▲% 5% Aeronautics Systems $2,961 $3,142 6% Defense Systems 1,800 2,059 14% Organic Sales1 Defense Systems 1,730 2,059 19% Mission Systems 2,823 3,093 10% $9,926 $10,423 Space Systems 2,870 2,698 (6)% Intersegment Eliminations (458)
Slide 5: Segment Operating Income and Margin Rate
Segment Operating Income1 and Margin Rate1 80 Three Months Ended September 30 bps ($M) 2024 2025 ▲% Aeronautics Systems $309 $305 (1)% Defense Systems 160 234 46% 12.3% 11.5% Mission Systems 390 515 32% Space Systems 345 298 (14)% Intersegment Eliminations (58) (75) Total $1,146 $1,277 11% 2024 2025
Slide 6: Q3 Diluted EPS Bridge
Q3 Diluted EPS Bridge 10% Q3 2024 Diluted EPS $7.00 Segment Performance 0.85 Marketable Securities 0.35 Net Pension1 0.10 $7.67 Unallocated Corporate Expense (0.31) $7.00 Federal Tax Rate (0.29) Interest Expense and Other (0.03) Q3 2025 Diluted EPS $7.67 Q3 2024 Q3 2025 Growth in EPS driven by outst
Slide 7: 2025 Company Level Guidance
2025 Company Level Guidance1 ($M), except per share amounts As of 10/21/2025 Sales $41,700 — $41,900 Prior: $42,050 — $42,250 Segment operating income2 $4,275 — $4,375 MTM-adjusted EPS2 $25.65 — $26.05 Prior: $25.00 — $25.40 Free cash flow2 $3,050 — $3,350 Updated guidance at the midpoint reflects ~
Slide 8: 2025 Segment Guidance
2025 Segment Guidance1 As of 10/21/2025 Sales ($B) OM Rate % Aeronautics Systems High $12 Low to Mid 6% Prior: Low $13 Defense Systems Low $8 High 10% Prior: Mid 10% Mission Systems Mid $12 Mid 14% Prior: Low to Mid $12 Space Systems Mid to High $10 High 10% Intersegment Eliminations ~($2.25) High 1
Slide 9: 2026 Outlook as of 10/21/2025
2026 Outlook as of 10/21/20251 • Mid-single digit organic sales2 growth • Segment OM rate2 in the low to mid 11% range • Reaffirm free cash flow2 range of $3.1 to $3.5 billion Well positioned for a broad range of new opportunities 1. See the company’s third quarter earnings release for a description
Slide 10: 2026 Net Pension Income Sensitivities ($M)
2026 Net Pension Income Sensitivities ($M) Asset Returns FAS(2)(3) 4.5% 6.0% 7.5% 9.0% 10.5% -50 bps 360 395 425 460 490 Discount -25 bps 335 365 400 430 460 Rate 0 bps 305 340 370 405 435 Change(5) Prior 25 bps 280 315 345 380 410 estimates(1) Current 50 bps 255 290 320 350 380 as of estimates(1) 1
Slide 11: Summary
Summary Dynamic global defense landscape presents significant opportunities for Northrop Grumman Committed to accelerating development and production of new capabilities with speed Diverse portfolio and strong backlog provides foundation for continued profitable growth Laser focused on performance a
Slide 12: Appendix
Appendix Third Quarter 2025 Conference Call 12
Slide 13: 2025 Supplemental Guidance
2025 Supplemental Guidance1 ($M) As of 10/21/2025 Total Net FAS/CAS pension adjustment2 ~$810 Prior: ~$800 Unallocated corporate expense: Intangible asset amortization and PP&E step-up depreciation ~$(90) Other items ~$(250) Prior: ~$(280) Training Services divestiture benefit ~$211 Operating income
Slide 14: Segment Realignment
Segment Realignment Segment Sales ($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 $12,030 Defense Systems 8,289 1,990 2,153 2,084 2,333 8,560 Mission Systems 10,895 2,659 2,
Slide 15: Segment Realignment
Segment Realignment Segment Operating Income 3 ($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 $1,182 Defense Systems 829 187 231 196 252 866 Mission Systems 1,609 378 361 390 469 1,
Slide 16: Non-GAAP Definitions
Non-GAAP Definitions Non-GAAP Financial Measures Disclosure: This presentation contains non-GAAP (accounting principles generally accepted in the United States of America) financial measures, as defined by SEC Regulation G and indicated by a footnote in this presentation. Definitions for the non-GAA
Slide 17: Non-GAAP Reconciliations
Non-GAAP Reconciliations Segment Operating Income and Margin Rate Three Months Ended Nine Months Ended September 30 September 30 ($M) 2024 2025 2024 2025 Total sales $9,996 $10,423 $30,347 $30,242 Operating income $1,120 $1,242 $3,281 $3,240 Operating margin rate 11.2% 11.9% 10.8% 10.7% Reconciliati
Slide 18: Non-GAAP Reconciliations
Non-GAAP Reconciliations Free Cash Flow Three Months Ended Nine Months Ended September 30 September 30 ($M) 2024 2025 2024 2025 Net cash provided by operating activities $1,091 $1,557 $1,810 $860 Capital expenditures (361) (301) (951) (788) Free cash flow $730 $1,256 $859 $72 Third Quarter 2025 Conf
Slide 19: Non-GAAP Reconciliations
Non-GAAP Reconciliations Organic Sales Three Months Ended Nine Months Ended September 30 September 30 % % ($M) 2024 2025 Change 2024 2025 Change Sales $9,996 $10,423 4% $30,347 $30,242 —% Less: Training services sales (70) — (226) (112) Organic Sales $9,926 $10,423 5% $30,121 $30,130 —% Third Quarte
Slide 20: Third Quarter 2025 Conference Call
Third Quarter 2025 Conference Call 20