Northrop Grumman Corporation · NYSE:NOC
Northrop Grumman — Q2 2026 Earnings Presentation
20 slides from Northrop Grumman's earnings presentation, Jul 21, 2026
Slide 1: Second Quarter 2026 Conference Call
JULY 21, 2026 SECOND QUARTER 2026 CONFERENCE CALL KATHY WARDEN JOHN GREENE Chair, Chief Executive Officer Corporate Vice President and President and Chief Financial Officer Photo: Great American State Fair B-2 flyover
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 Robust global demand environment continues to fuel record levels of backlog — now $105 billion Second quarter sales grew to $10.9 billion — 10% sequential / 5% year-over-year growth Ten new multi-year agreements in work as a supplier for Tactical Weapons — capacity in place Contin
Slide 4: Second Quarter 2026 Financial Highlights
Second Quarter 2026 Financial Highlights Three Months Ended June 30 ($M) 2026 2025 ▲% Backlog 104,692 89,737 17% Sales 10,876 10,351 5% Segment Operating Income1 1,158 1,219 (5)% Segment Margin Rate1 10.6% 11.8% (120) bps Diluted EPS $7.68 $8.15 (6)% Capital Expenditures (302) (231) 31% Adjusted Fre
Slide 5: Aeronautics Systems
Aeronautics Systems Sales ($M) Operating Income ($M) and Margin Rate 13% 10.3% 10.3% $3,519 $3,114 $362 $321 Q2 2025 Q2 2026 Q2 2025 Q2 2026 • Sales growth driven by B-21, TACAMO and volume on mature production programs • Strong performance across mature production and sustainment programs Agreement
Slide 6: Defense Systems
Defense Systems Organic Sales1 ($M) Operating Income ($M) and Margin Rate 7% 12.7% $1,951 $2,093 7.5% $253 $156 Q2 2025 Q2 2026 Q2 2025 Q2 2026 • Sales increase driven by continued ramp on Sentinel and missile defense programs • Operating income reflects investments in our tactical missile business
Slide 7: Mission Systems
Mission Systems Sales ($M) Operating Income ($M) and Margin Rate 3% 15.4% 14.0% $3,157 $3,250 $501 $441 Q2 2025 Q2 2026 Q2 2025 Q2 2026 • Diverse portfolio of advanced solutions continues to drive sustained sales growth • Outstanding execution fueling increased margin outlook Competitive differentia
Slide 8: Space Systems
Space Systems Sales ($M) Operating Income ($M) and Margin Rate 4% 10.6% $2,753 8.6% $2,646 $280 $236 Q2 2025 Q2 2026 Q2 2025 Q2 2026 • Space business driven by work on National Security Space programs • Progressed on the root-cause investigation on GEM 63XL, expect second half margins greater than 1
Slide 9: Q2 Diluted EPS Bridge
Q2 Diluted EPS Bridge Training Services Q2 2025 $8.15 Divestiture Training Services Divestiture1 (1.04) Segment Performance (0.26) $8.15 Federal Tax Rate 0.77 $7.68 Marketable Securities 0.20 Net Pension2 and Other (0.14) Q2 2026 $7.68 Q2 2025 Q2 2026 Year-over-year EPS growth adjusted for Training
Slide 10: 2026 Company Level Guidance
2026 Company Level Guidance1 ($M), except per share amounts As of 7/21/2026 Sales $43,750 — $44,250 Prior: $43,500 - $44,000 Segment operating income2 $4,850 — $5,000 MTM-adjusted EPS2 $28.60 — $29.10 Prior: $27.40 — $27.90 Adjusted free cash flow2 $3,100 — $3,500 Raising sales guidance by $250M and
Slide 11: 2026 Segment Guidance
2026 Segment Guidance1 As of 7/21/2026 Sales ($B) OM Rate % Aeronautics Systems ~$14 Mid to High 9% Prior: Mid $13 Prior: Low to Mid 9% Defense Systems Mid to High $8 ~10% Mission Systems High $12 ~15% Prior: High 14% Space Systems ~$11 Low 10% Prior: ~11% Intersegment Eliminations ~($2.7) Mid 13% P
Slide 12: Momentum continues to build...
Momentum continues to build... Purpose built portfolio with strategic alignment to global defense priorities Enduring demand and record backlog position the company for accelerating growth Consistent strong financial performance Industry leading capital investments in defense industrial base enables
Slide 13: Appendix
Appendix Second Quarter 2026 Conference Call 13
Slide 14: 2026 Supplemental Guidance
2026 Supplemental Guidance1 ($M) As of 7/21/2026 Total Net FAS/CAS pension adjustment2 ~$700 Unallocated corporate expense: Intangible asset amortization and PP&E step-up depreciation ~$(65) Other items ~$(280) Operating income $4,540 — $4,690 Interest expense ~$(620) Effective tax rate % Mid 14% Pr
Slide 15: 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 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 Six Months Ended June 30 June 30 ($M) 2026 2025 2026 2025 Total sales $10,876 $10,351 $20,757 $19,819 Operating income $1,096 $1,425 $2,085 $1,998 Operating margin rate 10.1% 13.8% 10.0% 10.1% Reconciliation to segm
Slide 18: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted free cash flow Three Months Ended June 30 Six Months Ended June 30 ($M) 2026 2025 2026 2025 Net cash provided by operating activities $1,280 $868 $(376) $(697) Capital expenditures (302) (231) (469) (487) Adjusted free cash flow $978 $637 $(845) $(1,184) Second Quar
Slide 19: Non-GAAP Reconciliations
Non-GAAP Reconciliations Organic Sales Total Company Three Months Ended Six Months Ended June 30 June 30 ($M) 2026 2025 % Change 2026 2025 % Change Sales $10,876 $10,351 5% $20,757 $19,819 5% Less: Training services sales — (40) — (112) Organic Sales $10,876 $10,311 5% $20,757 $19,707 5% Defense Sys
Slide 20: Second Quarter 2026 Conference Call
Second Quarter 2026 Conference Call 20