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14 Mar 25. Europe’s top money managers start to bring defence stocks in from the cold.

Summary

  • Europe eyes billions of euros in investment, stocks hit records
  • Some end-clients push fund managers to lift curbs on defence
  • Asset managers reviewing ESG policies, defence sector limits

European asset managers are reconsidering their policies on investing in defence, under pressure from clients and some politicians to loosen restrictions and help fund the continent’s race to re-arm. Under European Union rules, a number of funds badged as sustainable, opens new tab need to ensure their investments ‘Do No Significant Harm’. Many have avoided the sector entirely, with even engine maker Rolls Royce and Airbus, which has a big commercial aviation division, judged off limits. But as the EU now seeks around 800bn euros ($870bn) of investment to bolster defence after U.S. President Donald Trump said Europe must take more responsibility for its own security, the sector is too important to ignore. (Source: Reuters)

 

14 Mar 25. Britain to boost lending for defence exports by 2bn pounds. Britain said on Friday it would increase the overall amount it lends other countries to buy from British defence firms, in an effort to boost exports of missiles and aircraft and bolster its defence industry. The government will increase its credit agency UK Export Finance’s (UKEF) direct lending capacity for defence by 2bn pounds ($2.6bn) to 10bn, the finance ministry said. The Reuters Daily Briefing newsletter provides all the news you need to start your day. Sign up here. The boost comes weeks after Britain pledged to increase defence spending to 2.5% of GDP by 2027, saying it was necessary in light of global instability and the war in Ukraine.

“The world is changing, and we must bring about a new era of security and renewal that protects working people and keeps our country safe,” finance minister Rachel Reeves said.

“This increase to UKEF’s lending capability is our Industrial Strategy in action, bolstering our defence industry and supply chains, creating jobs and driving growth across the UK.”

Reeves will announce the increase later on Friday during a visit to a defence company in Scotland. ($1 = 0.7729 pounds) (Source: Reuters)

 

13 Mar 25. Israel Aerospace sales, profit jump in 2024 during war. State-run Israel Aerospace Industries (IAI) (ISRAI.UL) reported a 55% rise in profit for 2024, saying it was its best year ever and citing sales gains to both Israel’s military and to foreign customers. IAI, one of Israel’s largest defence contractors, said it earned a net $493m last year, up from $318m in 2023. Revenue increased 15.5% to $6.1bn.

Exports rose to $4.3bn from $3.8bn, although they comprised 66% of sales, down from 71% in 2023.

With Israel fighting wars on multiple fronts, sales in the Israeli market increased to $2.1bn from $1.5bn, with its share increasing to 34% of sales from 29%.

IAI’s order backlog jumped to $25bn from $18bn, reflecting four years of operation at current capacity.

IAI President and CEO Boaz Levy said the significant gain in contracts was a vote of confidence in Israel’s technological leadership.

(Source: Google/Reuters)

 

12 Mar 12. Arlington Capital Partners Forms GRVTY, Defense Technology Company. Arlington Capital Partners, (“Arlington”), a Washington, D.C.-area private investment firm specializing in government regulated industries, today announced the formation of GRVTY, a next generation leader in defense technology solutions for national security priorities across the Department of Defense, Intelligence Community and Homeland Security. GRVTY supports the U.S. government’s growing intelligence, surveillance, reconnaissance and targeting (ISR&T) challenges with advanced capabilities in geospatial intelligence (GEOINT), signals intelligence (SIGINT) and cyber combined with proven expertise to solve complex national security mission challenges. The company is led by CEO Katie Selbe, who has held senior leadership roles at two prior Arlington portfolio companies.

“At a time when the country is facing an increasingly complex national security environment, it is more important than ever for decisionmakers to receive rapid and trusted intelligence and analysis,” said Katie Selbe, CEO of GRVTY. “GRVTY was created to deliver American dominance from outer space to cyberspace, and I look forward to delivering critical situational awareness to support our customers’ national security missions.”

“GRVTY will deliver innovation at speed and scale to support our national security customers,” said David Wodlinger, a Managing Partner at Arlington Capital Partners. “We plan to provide significant resources to GRVTY as it grows rapidly to become the next major defense technology company.”

GRVTY has over 325 employees across eleven states with primary locations including Arlington, Va., Annapolis Junction, Md., Dulles, Va., Chantilly, Va., Springfield, Va. and St. Louis and has more than $100 m in revenue.

About GRVTY

GRVTY is a defense technology company. Our automated ISR&T platforms, software and data solutions help our defense, intelligence and homeland security customers turn insight into action faster and with confidence. Every day, our dedicated employees answer the challenge to rapidly deliver mission and technical expertise to keep America safe and secure. Learn more at www.grvty.com and follow us on LinkedIn.

About Arlington Capital Partners

Arlington Capital Partners is a Washington, D.C.-area private investment firm specializing in government regulated industries. The firm partners with founders and management teams to build strategically important businesses in the government services and technology, aerospace and defense, and healthcare sectors. Since its inception in 1999, Arlington has invested in over 175 companies and is currently investing out of its $3.8bn Fund VI. For more information, visit Arlington’s website at www.arlingtoncap.com and follow Arlington on LinkedIn. (Source: BUSINESS WIRE)

 

12 Mar 25. Comtech Telecommunications Corp. (NASDAQ: CMTL) (“Comtech” or the “Company”), a global communications technology leader, today reported financial results for its second quarter ended January 31, 2025.

“When I became Comtech’s President and CEO on January 13, we announced both unsatisfactory financial results for the first quarter ended October 31, 2024 as well as a comprehensive transformation plan to address longstanding issues and better position the Company going forward. I am pleased to report that we are making strong progress in the execution of that transformation plan which has started to position the Company in a positive trajectory for a successful future,” stated Ken Traub, Chairman, President and CEO.

Consolidated Financial Results

  • Net sales of $126.6m
  • Gross margin of 26.7%
  • Operating loss of $10.3m, net loss of $48.7m and Adjusted EBITDA (a Non-GAAP measure) of $2.9m
  • Net bookings of $79.4m, representing a book-to-bill ratio of 0.63x
  • Funded backlog of $763.8m and revenue visibility of approximately $1.6bn

Recent Major Corporate Developments

  • Ken Traub joined the Board of Directors on October 31, 2024, was appointed Executive Chairman on November 27, 2024 and became President and Chief Executive Officer on January 13, 2025.
  • Under Mr. Traub’s leadership, Comtech is executing a comprehensive transformation plan, which includes actions to improve operational discipline, streamline the Company’s cost structure, support the growth and development of differentiated, higher margin business initiatives, strengthen the capital structure, explore strategic alternatives and improve the corporate culture by strengthening accountability and enhancing employee morale and productivity.
  • Subsequent to quarter end, on March 3, 2025, Comtech entered into a series of transactions to improve its capital structure and financial flexibility:
  • The Company received a $40.0m capital infusion in the form of subordinated debt, from existing investors, that enabled a favorable re-negotiation of certain terms of its senior secured loan facility with a syndicate of lenders (the “Credit Facility”);
  • Of the proceeds received, $27.3m was immediately used to prepay a portion of the term loan, and $3.2m was applied as a reduction in the revolver loan commitment. The lenders agreed to waive the prepayment penalties that were applicable under the terms of the Credit Facility;
  • The amended Credit Facility waived all events of default, specifically the Net Leverage Ratio and the Fixed Charge Coverage Ratio covenants as of January 31, 2025 (that the Company disclosed it anticipated breaching in its SEC filings, press release and conference call on January 13, 2025) and suspended testing of these covenants such that the next test will be for the quarter ending on October 31, 2025;
  • The amended Credit Facility immediately lowered the interest rates on the Term Loan and Revolver Loan by approximately 470 and 215 basis points, respectively, and lowered the minimum quarterly Average Liquidity covenant from $20.0m to $17.5m; and
  • Comtech is conducting a comprehensive review of strategic alternatives with TD Cowen and Imperial Capital serving as financial advisors.

Mr. Traub continued,

“As we discussed on January 13, a vital element of our transformation plan is to earn the trust and confidence of all of our stakeholders, and we intend to do that by being transparent, holding ourselves accountable and delivering on our promises. We disclosed at that time that the Company anticipates breaching financial covenants under its Credit Facility as of the next testing date of January 31, 2025 and this could have significant consequences for the Company. We are fortunate to have earned the support of our subordinated debt investors as well as our secured creditors that has enabled us to not only cure these breaches but has also provided us with more financial flexibility going forward. I believe this is a testament to the confidence that our lenders have in our transformation plan and the progress that they see we are making, including improving operational discipline, reducing the cost structure, supporting the growth of higher margin business initiatives and exploring strategic alternatives.” Mr. Traub added, “It is particularly gratifying to see the brightening of the corporate culture as employees are increasingly taking pride in the positive trajectory toward a stronger and healthier future for Comtech.”

Second Quarter Fiscal 2025 Consolidated Results Commentary

Consolidated net sales were $126.6m in the second quarter, a decrease of 5.7% compared to the prior year period and an increase of 9.3% sequentially from last quarter. While net sales in the Satellite and Space Communications (“S&S”) and Terrestrial and Wireless Networks (“T&W”) segments were both lower compared to the period year period, the sequential increase was due to higher sales of SATCOM and VSAT equipment to the U.S. Army in the S&S segment.

Consolidated gross profit was $33.7m, or 26.7% of consolidated net sales, in the second quarter, which is a decline from the prior year period gross profit of $43.2m, or 32.2%, but is a sequential increase from the $14.5m, or 12.5%, reported in the immediately preceding quarter. Gross profit in the first quarter of fiscal 2025 reflected an $11.4 m non-cash charge in the S&S segment related to the write down of certain inventory associated with discontinued products.

Consolidated operating loss was $10.3m in the second quarter, compared to operating income of $3.0m in the prior year period. Operating loss in the more recent quarter significantly improved from the $129.2 m operating loss reported in the immediately preceding quarter, due in large part to the improvement in gross profit described above, and non-cash charges in the first quarter of fiscal 2025 in the S&S segment related to a $79.6m impairment of goodwill and $17.4m unbilled receivable contract asset reserve. Operating loss in the more recent period includes, among other things: $5.0m of amortization of intangibles; $3.4m of restructuring costs; $1.2m of amortization of stock-based compensation; and $1.1m of proxy solicitation costs.

Consolidated net loss was $48.7m in the second quarter, compared to a net loss of $10.6m in the prior year period. Net loss in the more recent quarter improved from the $148.4m net loss reported in the immediately preceding quarter.

Consolidated Adjusted EBITDA (a non-GAAP measure) was $2.9m in the second quarter, compared to Adjusted EBITDA of $15.1m in the prior year period. Adjusted EBITDA in the more recent quarter improved from the Adjusted EBITDA loss of $19.4m in the immediately preceding quarter. Adjusted EBITDA loss in the first quarter of fiscal 2025 included a non-cash charge of $17.4m for fully reserving for an unbilled receivable contract asset in the S&S segment.

Consolidated net bookings were $79.4m in the second quarter, a decrease of 44.0% and 37.9%, respectively, compared to the prior year period and immediately preceding quarter. The book-to-bill ratio in the more recent quarter was 0.63x. The fluctuation in bookings was due in part to the timing of receipt of large, long-term contracts within the Company’s T&W segment in prior periods and decisions not to accept low margin customer bookings.

Consolidated backlog was $763.8m as of January 31, 2025, compared to $811.0 m as of October 31, 2024 and $798.9m as of July 31, 2024. Revenue visibility, measured as the sum of funded backlog and the total unfunded value of certain multi-year contracts, was approximately $1.6 bn at the end of the second quarter.

Satellite and Space Communications Segment Commentary

S&S net sales were $73.7m in the second quarter, a decrease of 6.2% compared to the prior year period and an increase of 25.1% sequentially from last quarter. Compared to the prior year period, S&S experienced a decline in net sales of troposcatter solutions given, for example, the anticipated winddown of certain U.S. government contracts, as well as a large COMET order to an international customer which did not repeat this quarter, offset in part by higher net sales of its satellite communications (“SATCOM”) and satellite ground infrastructure solutions. The sequential increase in S&S net sales was due to higher sales of SATCOM and VSAT equipment to the U.S. Army.

S&S operating income was $1.2m in the second quarter, compared to operating income of $1.9m in the prior year period. Operating income in the more recent quarter significantly improved from the $118.8m operating loss reported in the immediately preceding quarter, which had been impacted by a non-cash goodwill impairment charge, a non-cash charge to fully reserve for an unbilled receivable contract asset and a non-cash charge related to the write-down of certain inventories, among other things.

S&S net income was $1.6m for the second quarter, compared to a net loss of $0.5 m in the prior year period. Net income in the more recent quarter significantly improved from the $119.4m net loss reported in the immediately preceding quarter.

S&S Adjusted EBITDA was $4.7m in the second quarter, compared to Adjusted EBITDA of $7.1m in the prior year period. Adjusted EBITDA in the more recent quarter improved from the $21.1 m Adjusted EBITDA loss reported in the immediately preceding quarter. Compared to the prior year period, Adjusted EBITDA reflects lower net sales and gross profit (both in dollars and as a percentage of related segment net sales), offset in part by lower selling, general and administrative and research and development expenses. S&S Adjusted EBITDA in the first quarter includes the aforementioned $17.4m non-cash charge to fully reserve for an unbilled receivable contract asset.

S&S net bookings were $47.4m in the second quarter, a decrease of 29.9% and 18.8%, respectively, compared to the prior year period and immediately preceding quarter. This decrease reflects, in part, deliberate decisions not to accept low margin customer bookings. The book-to-bill ratio in the quarter was 0.64x. At quarter end, S&S had $252.1m in funded backlog.

In addition to the business highlights presented above, key S&S contract awards and product launches during the second quarter included, among others:

  • A sole source follow-on contract from L3Harris, valued in excess of $15.0m, that calls for the delivery of modem technologies supporting the U.S. Air Force and U.S. Army Anti-Jam Modem (“A3M”); Comtech’s A3M technologies are engineered to deliver software-defined, secure, and resilient anti-jam SATCOM capabilities for U.S. Air Force and U.S. Army platforms operating around the world; to-date, Comtech has received multiple sole source, follow-on production contracts from L3Harris in excess of $26.0m;
  • A contract from an international military end customer, valued in excess of $4.5m, calling for the delivery of software-defined SLM-5650B and CDM-625 modems, upgrade kits, firmware and technical support;
  • Approximately $4.0m in funded orders from a long-time, existing international customer for the procurement of EEE space parts and services;
  • Approximately $4.0m of incremental funding for ongoing training and support of complex cybersecurity operations for U.S. government customers;
  • In excess of $2.0m in funded orders calling for the supply of Very Small Aperture Terminal (“VSAT”) equipment and related services for the U.S. Army; and
  • A sole source production order, valued at approximately $2.0 m, from an existing customer for multi-orbit frequency converters.

Terrestrial & Wireless Networks Segment Commentary

T&W net sales were $52.9m in the second quarter, a decrease of 4.9% and 7.0%, respectively, compared to the prior year period and immediately preceding quarter. Compared to the prior year period, T&W experienced lower net sales of its location based solutions and NG-911 services, offset in part by higher net sales of its call handling solutions. Such decrease reflects T&W’s repositioning to sell its 5G and related location-based solutions to international customers, which have long sales cycles, and the timing of performance on statewide NG-911 contracts, such as with the State of Ohio.

T&W operating income was $3.4m in the second quarter, compared to operating income of $8.1m in the prior year period and operating income of $5.3m in the immediately preceding quarter.

T&W net income was $3.4m in the second quarter, compared to net income of $7.6m in the prior year period and $5.3m in the immediately preceding quarter.

T&W Adjusted EBITDA was $8.9m in the second quarter, compared to Adjusted EBITDA of $13.7m in the prior year period and $11.0m in the immediately preceding quarter. Compared to the prior year period, Adjusted EBITDA reflects lower gross profit (both in dollars and as a percentage of related segment net sales) and higher selling, general and administrative expenses and research and development expenses.

T&W net bookings were $32.0m in the second quarter, a decrease of 56.9% and 53.9%, respectively, compared to the prior year period and immediately preceding quarter. The book-to-bill ratio in the quarter was 0.61x. At quarter end, T&W had $511.8m in funded backlog. The fluctuation in bookings was due in part to the timing of receipt of large, long-term contracts in prior periods and decisions not to accept low margin customer bookings.

In addition to the business highlights presented above, key T&W contract wins and renewals during the second quarter included, among others:

  • A funded order, valued at approximately $8.0m, from a long-time, existing customer for location and mapping services intended for motorcycles and off-road vehicles;
  • Various funded orders, valued in excess of $3.0m, primarily for location and maintenance and support services for one of the largest wireless carriers in the U.S.;
  • Incremental funding related to its NG-911 deployment in South Carolina, valued in excess of $2.0m;
  • Incremental funding, valued in excess of $2.0m, from an existing customer requesting the continuation of NG-911 call routing services for voice over internet protocol (“VoIP”) communications; and
  • A funded order, valued in excess of $1.5m, from an existing U.S. military customer requesting the extension of call handling maintenance and support services.

Cost-Savings and Profit Improvement Initiatives

As previously announced on January 13, 2025, the Company is conducting a thorough review of processes, product lines, staffing levels and cost structures to identify actions that are expected to meaningfully reduce costs, enable a more efficient and effective organization and improve its cash conversion cycle. To that end, the Company notes that since July 2024, it has significantly progressed with its plans to wind down its steerable antenna operations located in the U.K. (GAAP operating losses related to this product line in fiscal 2024, 2023 and 2022 were $32.3 m, $8.2 m and $9.9 m, respectively). In addition to discontinuing products within the Company’s satellite ground infrastructure product line to focus on higher margin revenue opportunities, the Company has also reduced its global workforce by approximately 13% since July 31, 2024, which represents approximately $26.0m in annualized labor costs. Severance associated with such actions approximated $2.8m. The Company expects to take further cost reduction actions in the second half of fiscal 2025.

Liquidity

As previously disclosed on March 3, 2025, the Company amended its Credit Facility and Subordinated Credit Facility to, among other things, waive all defaults, specifically the Net Leverage Ratio and Fixed Charge Coverage Ratio covenants under both facilities as of January 31, 2025 and suspend testing of these covenants until the quarter ending on October 31, 2025, reduce the interest rate associated with the Credit Facility’s Term Loan and Revolver Loan, reduce the minimum quarterly Average Liquidity requirement from $20.0m to $17.5m and allow for a new $40.0m capital infusion in the form of subordinated debt from existing holders of the Company’s convertible preferred stock and subordinated debt. Of the proceeds received, $27.3m was immediately used to prepay, without prepayment penalty, a portion of the Term Loan, and $3.2m was applied as a reduction in the Revolver Loan commitment. As of January 31, 2025 and March 10, 2025, Comtech’s:

  • Qualified cash and cash equivalents were $26.3m and $21.5m, respectively;
  • Total outstanding borrowings under the Credit Facility were $202.9 m and $168.0m, respectively, of which $32.5m and $23.4m was drawn on the Revolver Loan;
  • Total outstanding borrowings under the Subordinated Credit Facility (excluding accreted interest) were $25.0m and $65.0m, respectively; and
  • Available sources of liquidity, as of March 10, 2025, approximated $27.4m, consisting of qualified cash and cash equivalents and the remaining available portion of the committed Revolver Loan.

 

11 Mar 25. Rocket Lab to expand into laser communications with Mynaric acquisition. Rocket Lab announced plans March 11 to buy its optical communications terminal supplier Mynaric, which entered restructuring last month following production delays and supply chain issues. The deal is contingent on Germany-based Mynaric completing its restructuring process, which would eliminate all publicly traded shares and transfer full ownership to a lender affiliated with U.S. investment firm PIMCO. U.S.-headquartered Rocket Lab would then acquire a majority stake in Mynaric for an initial $75m, payable in cash or shares, with an additional $75m tied to revenue targets. The initial purchase price is a fraction of the more than $300m invested in Mynaric to date, Rocket Lab noted in a news release, and would give the launch provider, spacecraft maker and satellite component supplier a foothold in Europe to chase growth opportunities in the region. The deal would also further vertically integrate a company originally founded in 2006 with a focus on small satellite launch services.

“Rocket Lab would acquire extensive production assets, Intellectual Property, product inventory and committed backlog related to satellite-to-satellite optical connectivity solutions for next generation constellations,” the company said in the news release, “augmenting Rocket Lab’s already extensive portfolio of satellite components, subsystems and software.”

Optical terminals enable satellites to send and receive high bandwidth data to and from each other using laser beams. They are integral to the mesh satellite network the U.S. Space Development Agency (SDA) is planning to enhance communications, surveillance and missile tracking capabilities. Mynaric supplies optical terminals as a subcontractor to Rocket Lab under its $515m prime contract with SDA to produce 18 satellites for the Tranche 2 Transport Layer-Beta. The company is also supplying these terminals to other manufacturers, including Northrop Grumman, York Space and Loft Federal, for their own SDA contracts supporting the agency’s mesh network. However, Mynaric said it entered restructuring under German law last month after extended product development and higher-than-expected costs left it unable to generate sufficient earnings to service its debt. The company said it had heavily invested in production, manufacturing and market expansion for its CONDOR Mk3 optical terminal, but delays drove up costs and cash burn.

“The Company remains in pre-profit state and despite cash-in from customers as milestones were achieved, earnings have recently not been sufficient to achieve a sustainable positive operating result that is able to service the debt burden,” Mynaric said Feb. 7.

Demand for optical communications is high in the space sector, industry executives said March 10 during the Satellite Conference here, but satellite makers continue to struggle with sourcing laser communication systems, along with propulsion and radiation-hardened components, due to limited availability and high costs. Through past acquisitions, Rocket Lab said it has scaled satellite subsystems previously limited to low production volumes and long lead times. It plans to do the same with Mynaric’s optical terminals to meet growing demand from large constellations and an expanding customer base. Mynaric said it expects to complete its restructuring process before the end of June. (Source: Defense News Early Bird/Space News)

 

11 Mar 25. Italy’s Leonardo lifts guidance for next four years, alliances seen key to growth.

  • Group to “update the concept of defence” with new technologies
  • Cumulative orders in 2025-2029 seen at 118bn euros
  • Revenue of newly-created space division up 10% to 2029
  • Aerostructures business core profit break-even by end-2028

Italy’s Leonardo (LDOF.MI) on Tuesday lifted its guidance for the next four years as the defence and aerospace group continues to look at broad international alliances and cooperation with peers to boost its growth. The state-controlled company aims to “update the concept of traditional defence”, it said, focusing on its core business of defence electronics and helicopters as well as developing digital and space technologies, seen as key for future warfare.

“The start of the alliances and international partnerships undertaken in recent months is the element enabling us to accelerate our development,” Chief Executive Roberto Cingolani said in a statement.

Since launching its ambitious five-year industrial plan in March last year, the company has signed a joint venture for the development and manufacturing of military combat vehicles with Germany’s Rheinmetall (RHMG.DE) and a partnership with Turkey’s Baykar to produce unmanned aerial vehicles (UAVs). (Source: Google/Reuters)

 

12 Mar 25. Boom at Rheinmetall: Result and order backlog with new all-time records.

Fiscal year 2024

  • Consolidated sales grow significantly by 36% to €9,751m,

sales in the defence business increase by 50%

  • Operating result climbs by 61% to a new record value of €1,478m (previous year: €918m)
  • The Group’s operating margin rises to 15.2% and even reaches 19% in the defence business
  • Rheinmetall backlog reaches a new record high of €55.0bn,  an increase of 44% (previous year €38.3bn)
  • Proposed dividend of €8.10 per share, compared to €5.70 in the previous year

Outlook 2025: Continued strong sales growth with unchanged high return expectations

  •    Rheinmetall forecasts sales and earnings growth to continue in fiscal year 2025
  •    Group sales are currently expected to grow by 25% to 30%
  •    Group’s operating result margin expected to be approximately 15.5%

The Düsseldorf based Rheinmetall Group continued on its profitable growth trajectory and closed fiscal year 2024 with record figures once again. A new record high was achieved in the consolidated operating result. As in the previous year, the technology group’s Rheinmetall backlog also reached a record level. Major high-volume orders from military customers will ensure capacity utilization in the coming years.

Group sales increased primarily in the divisions of the defence business, which now accounts for around 80% of Group sales. In the civilian sector, however, the picture is mixed. While the highest sales in the company’s history was achieved in the Trade business unit, business with car manufacturers is declining, as is typical for the industry.

Rheinmetall forecasts continuing strong sales and earnings growth for fiscal year 2025. Given the dramatically changed security policy situation, the Group sees itself in a promising position to play a significant role in the upcoming increase in defence capability with security-related products in Germany and partner countries.

Armin Papperger, CEO of Rheinmetall AG: “Rheinmetall is facing the challenges of Zeitenwende 2.0. We are well prepared for this: We have massively increased our capacities already and will continue to do so. Over the past two years, we have invested nearly €8 bn to build new plants, make acquisitions and secure supply chains. We are aware of our responsibility for the security of our country and for the defence capability of Europe. With a 50% sales growth in the defence business, Rheinmetall is on its way from being a European systems supplier to a global champion.”

Armin Papperger: “An era of rearmament has begun in Europe that will demand a lot from all of us. However, it also brings us at Rheinmetall growth prospects for the coming years that we have never experienced before. We are an important player in key areas of military equipment. With our capital strength, broad technological positioning and highly motivated employees, we will be a reliable and efficient partner for governments.”

Group sees another significant rise in profits with rising sales

In fiscal year 2024, the Rheinmetall Group generated consolidated sales of €9,751m. Compared with the previous year’s sales of €7,176m, this is an increase of €2,575m or 36%. The Group thus achieved the sales expectation for 2024, which had been forecast at around €10bn.  As in the two previous years, the 2024 fiscal year was characterized by significant increases in sales in the defence technology divisions, which benefited from rising demand in the wake of the turnaround in security policy. By contrast, Power Systems, which emerged from the merger of the Sensors and Actuators and Materials and Trade divisions at the start of 2024, fell slightly short of the previous year’s sales due to changes in the general conditions.  The growing volume of business with the German armed forces increased the national share of Group sales and caused the foreign share to fall to 70% in the reporting year (previous year: 76%).  On December 31, 2024, the Rheinmetall backlog was €55bn, a new high, after €38bn in the previous year. This figure includes binding order backlog and orders from framework agreements (frame backlog) as well as the nominated backlog of the civilian business. Consolidated operating result climbed significantly by 61% to a new record level of €1,478m and thus increased over proportionately compared to the sales growth achieved. The previous year’s figure of €918m, which had already been reported as the highest earnings figure in the company’s recent history, was thus once again clearly exceeded. The Group’s operating margin stood at 15.2%, which was likewise significantly higher than the previous year’s figure of 12.8%. In terms of the defence business, i. e. excluding the Group’s civilian activities, the margin even reached 19%. Earnings after taxes increased to €808 m and exceeded the previous year’s figure of €586m by 38%. After deduction of earnings attributable to non-controlling interests of €91m (previous year: €51m), earnings attributable to shareholders of Rheinmetall AG were €717m, compared to €535m in the previous year. This results in earnings per share of €16.51, compared with €12.32 in the previous year.  On this basis, a dividend payment for fiscal year 2024 of €8.10 per share will be proposed to the Annual General Meeting on May 13, 2025, compared to €5.70 in the previous year. This corresponds to a payout ratio of 39.0% (previous year: 38.9%) in relation to earnings per share from continuing operations before PPA effects. The operating cash flow from continuing operations generated in the Rheinmetall Group in fiscal year 2024 reached €1,045 m and thus 71% of the operating result. It is therefore also clearly above the strategic target range of >40% of the operating result due to unexpectedly good customer payments. Compared to €356m in the previous year, cash flow from continuing operations nearly tripled in the reporting period.

Vehicle Systems: Sales and operating result continue to increase significantly

Vehicle Systems generated sales of €3,790 m in the 2024 fiscal year with its activities in the area of wheeled and tracked military vehicles. The previous year’s figure of €2,609m was thus clearly exceeded by 45%. Significant sales contributions were attributable to the delivery of military swap body trucks and the launch of tactical vehicle programs, among other things.

The Rheinmetall Nomination – the order intake, including framework agreements – of Vehicle Systems exceeded the previous year’s figure of €7,144m at €8,349m, which had already quadrupled in fiscal year 2023 compared to the previous year due to the turning point or “Zeitenwende”. The largest individual projects here relate to a new framework agreement to supply unprotected transport vehicles with a value of €2,935m, the commissioning of the “Heavy Weapon Carrier” boxer vehicle with an order value of €1,666m and the associated service contract.

The operating result improved by around €100m to a total of €425m in reporting year 2024. The operating margin was slightly below the previous year’s figure of 12.4% at 11.2% due to the changed product mix.

Weapon and Ammunition: Operating result almost doubled to €790m

Weapon and Ammunition is a key sales driver in the Rheinmetall Group with its activities in weapon systems and ammunition as well as protection systems. As the fastest-growing division in the Group, it significantly increased its sales from €1,756m in the previous year to €2,783m, which corresponds to growth of 58%. As in the previous year, significant growth impetus came from Germany, other NATO countries and Ukraine. Here, direct deliveries were increased by a further €609m. The Spanish subsidiary Rheinmetall Expal Munitions made a significant contribution to this.  The Rheinmetall nomination of Weapon and Ammunition reached a new record high with an increase of €4,070m to €12,307m. In fiscal year 2023, the order intake had already more than doubled compared to the previous year. The increase in a multi-year framework agreement for artillery ammunition with the German customer by €7.1bn should be highlighted. This increase alone significantly exceeds the value of both framework agreements from the previous year: over €3.2bn for tank ammunition and over €1.4bn for artillery ammunition. Due to the changed European security situation and the need for artillery ammunition, the framework agreement from 2023 was already fully utilized, making it necessary to increase the overall volume.

The operating result of Weapon and Ammunition almost doubled in the 2024 fiscal year, essentially due to the higher sales volume. It increased by €387m, or 96%, to €790m, compared to €403m in the previous year (2023). The operating profit margin improved from 23.0% in the previous year to 28.4% in the reporting year due to the high volume growth in the classic ammunition business.

Electronic Solutions: Further increase in sales and operating profit margin

Electronic Solutions, which develops and produces solutions in the field of defence electronics, generated sales of €1,726m in the 2024 fiscal year, exceeding the previous year’s figure by 31% (previous year: €1,318m). A significant contribution to this increase in sales was made by sales from major orders placed in the fiscal year 2024 for the delivery of air defence systems for short and very short-range protection (LVS NNbS) and the mobile air defence system Skyranger 30, both for the German customer, as well as from the delivery of combat helmets to the German Army. Other relevant sales resulted from the delivery of Skynex and Skyranger air defence systems to European customers. The Rheinmetall nomination of Electronic Solutions rose to a new record of €5,065m in the 2024 fiscal year (previous year: €2,183m). This corresponds to an increase of 132%. The largest individual orders related to the development contract for the short and very short range air defence protection system (Luftverteidigungssystem Nah- und Nächstbereichsschutz, LVS NNbS) and the delivery agreement for the Skyranger 30 mobile air defence system. Also worthy of mention are the German Army’s framework assignments for the digitalization of land-based operations (DLBO) and the delivery of headsets with hearing protection function (SmG), the assignment to deliver Skyranger air defence systems and the share of the assignment to manufacture and deliver the “Heavy Weapon Carrier” Boxer 8×8 vehicle.  At €217m, the division’s operating result was up 45% on the previous year’s figure of €150m. The operating margin rose further from 11.4% in the previous year to 12.6% in the reporting year due to successfully completed major orders.

Power Systems: General market weakness leads to slight decline – Trade division achieves highest sales in company history

Rheinmetall’s civilian business was reorganized with effect from January 1, 2024: Sensors and Actuators as well as Materials and Trade were combined to form Power Systems. Power Systems is Rheinmetall’s organizational umbrella for key technological competencies in civilian markets.  In the reporting year, there was a slight decline in sales of -2% or -€46m to €2,038m. On an exchange rate basis, the decline in sales was 1% (€-20m).  The sales declines in the product areas Air Management, Exhaust Gas Regulation, Plain Bearings, and Thermal Management was primarily due to the general weakness of the market. New projects in the field of electro mobility have not yet made significant contributions. Slight growth was achieved in the Electrification and Digitalization product area. The business of various solenoid valve variants remained largely stable and even increased for coolant valves. The Trade business unit achieved the highest sales in the company’s history in the past fiscal year. Compared to the previous year, a sales growth of 14% or €68 m was achieved.  The booked business in fiscal year 2024 was 28% below fiscal year 2023 at €2,508m (previous year’s figure: €3,480m). In absolute terms, significantly less business was booked in the electric drive as well as combustion engine categories, which is attributable to the slower development of the market for electric vehicles and the tightened new EU7 emissions standard.  Power Systems achieved an operating result of €86m in fiscal year 2024, which is €47m below the previous year’s figure. The operating result margin declined to 4.2% in 2024 (previous year 6.4%).

Rheinmetall Group Forecast for 2025:

Continued strong sales growth with stable high margin expectations

Based on the current market outlooks, the Rheinmetall Group expects significant sales growth and anticipates a stable, high operating margin combined with an improved operating result in fiscal year 2025. Annual sales in the Rheinmetall Group are set to increase by 25% to 30% in the 2025 fiscal year (sales in the 2024 fiscal year: €9.8bn). In the defence business, Rheinmetall is expecting a sales growth between 35% and 40%. Based on this sales forecast, Rheinmetall anticipates an improvement in the Group operating result and a Group operating margin of around 15.5% in the current fiscal year 2025 (margin in fiscal year 2024: 15.2%), taking into account holding costs.  This outlook does not yet take into account the improvement in market potential that is expected to arise in the markets that are particularly relevant for Rheinmetall in Europe, Germany and Ukraine as a result of the geopolitical developments in recent weeks. Rheinmetall will therefore make any necessary forecast adjustments as the respective requirements of military customers become more specific over the course of the year.

 

12 Mar 25.  Solid State – A solid play on the defence spending boom.

  • $25m UK defence order contract
  • Potential for more significant orders
  • 21 per cent earnings upgrades
  • Share price up 14 per cent

Redditch-based value-added electronics group Solid State (SOLI: 200p) has announced a $25m (£19.3m) communications equipment contract under a UK defence programme for delivery in the financial year to 31 March 2026. The order had previously been expected to be received and delivered in the current financial year, but as announced in November it was put on hold following the change in the UK government and pending the outcome of the Strategic Defence Review (‘Solid State order delay hits shares – but it’s not time to bail out’ 15 November 2024). While the defence review is expected to report in the Spring, this order has been approved by exception. Moreover, reflecting recent geopolitical developments and potential for additional defence contracts, Solid State’s management plans to increase investment in the group’s production capabilities in both the US and the UK to accelerate medium-term organic growth opportunities within the defence and security sector. Analysts at brokerage Zeus Capital conservatively raised their revenue estimate for the new financial year from £130mn to £145mn and upgraded both pre-tax profit and earnings per share (EPS) estimates by 21 per cent to £7.2mn and 9.5p, respectively. On this basis, the shares trade on a forward price/earnings (PE) ratio of 21 – a premium to peers. However, given that the contract value exceeds the revenue upgrade, analyst John Cummins rightly points out that it not only de-risks the group’s earnings from potential wider economic uncertainty in the year ahead, but offers scope for estimates to be raised in due course. Although Zeus’ net debt forecasts of £8mn (up from £3.7mn) and £3.8mn(from £0.3m) for the 2024-25 and 2025-26 financial years are higher than previous forecasts due to the planned investment and working capital movements, leverage ratios remain modest. Importantly, Solid State has funding facilities to support additional working capital requirements on further large defence contract wins. Solid State’s share price has risen 29 per cent since I recommended holding onto your shares at 155p after management downgraded earnings guidance last autumn. Of more importance, there is obvious potential for defence sector contract wins to drive both earnings upgrades and the share price back above my original (260p) entry point (Alpha Research: An overlooked share to benefit from rising defence spending’, 20 July 2023). Hold. (Source: Investors Chronicle)

 

11 Mar 25. Cuashub.com said today that Epirus secures additional $250m funding for the Leonidas High-Power Microwave Weapon. Epirus has announced it has successfully secured an additional $250 m in funding for its Leonidas high-power microwave weapon program. In a statement earlier this week, the company said that this new investment will enable it to scale up production to meet the increasing global demand for directed-energy defense systems. This latest funding round brings the total venture funding to more than $550 m. Leonidas is a ground-based, directed-energy weapon designed to unleash an electromagnetic pulse that disrupts the electronic systems of unmanned aerial vehicles. The system can also be used to counter drone swarms as it covers a wide area with a broad beam, with Epirus Founder Joe Lonsdale describing it as “the best protection against drone swarms today.” According to Epirus, the Leonidas program is designed to help militaries transition from a traditional “1-to-1” defense model to a more scalable “1-to-many” approach, highlighting that today’s battlefields – notably those in Ukraine and the Middle East – are “littered with thousands of low-cost, highly networked and highly distributed threats”. As a result, there is a necessity for “technologies that are scalable and easily upgraded to fit a range of use cases, effective against a spectrum of threats, and capable of processing many threats simultaneously by a single operator.” In addition, Epirus plans to use the funding to significantly expand its workforce, enhance supply chain resilience, and upgrade internal systems and processes related to the manufacturing of Leonidas. Furthermore, the investment will be used to support the expansion of the company’s manufacturing footprint in the U.S. and aims to help broaden its market reach. The company also plans to open an immersive simulation center in Oklahoma – home to U.S. Army Garrison Fort Sill and the Joint Counter-Small UAS University at the Fires Center of Excellence – in Q3 2025. The center is being designed to deliver a realistic and immersive training environment to prepare warfighters for contemporary threats. This additional funding will support the company in providing its Leonidas system to its military customers, including the U.S. Navy who awarded Epirus a $5.5 m contract in September 2024, and the U.S. Army’s Rapid Capabilities and Critical Technologies Office (RCCTO), who granted the company a $17 m contract in October 2024.

Epirus secures additional $250M funding for the Leonidas High-Power Microwave Weapon

(Source: https://cuashub.com/)

 

07 Mar 25. MDA Space Ltd. (TSX: MDA), a trusted space mission partner to the rapidly expanding global space industry, today announced financial results for the fourth quarter and year ended December 31, 2024.

“In 2024, the MDA Space team delivered another year of strong execution reflected in 34% and 25% increases in revenue and adjusted EBITDA, helping to further solidify our position as a trusted mission partner and leader in the expanding space industry,” said Mike Greenley, Chief Executive Officer of MDA Space.

  • Q4 2024 Highlights
  • Backlog of $4.4bn at quarter-end, up 42% YoY
  • Revenues of $347m, up 69% YoY
  • Adjusted EBITDA1 of $71m, up 68% YoY; adjusted EBITDA margin1 of 20.5%
  • Adjusted net income1 of $35m, up 26% YoY
  • Full year 2024 Highlights
  • Revenues of $1,080m, up 34% YoY
  • Adjusted EBITDA of $217m, up 25% YoY; adjusted EBITDA margin of 20.1%
  • Adjusted net income of $111m, up 13% YoY
  • Operating cash flow of $816m; Free cash flow of $615m
  • Net cash position of $167m at year-end
  • Introduction of 2025 Financial Outlook
  • Revenues expected to be $1.50 – $1.65bn, representing ~ 45% YoY growth
  • Adjusted EBITDA expected to be $290 – $320m, representing ~ 40% YoY growth, with adjusted EBITDA margin of 19%-20%

“We continued to grow our backlog, securing the next phases of the Canadarm3 program valued at $1 bn, while advancing work on a number of important programs including the Telesat Lightspeed and Globalstar LEO constellations, Canadarm3 robotic program and MDA CHORUSTM, our next generation Earth observation constellation.”

“Post quarter-end, MDA Space was awarded a $1.1bn contract from Globalstar to manufacture its next generation LEO constellation which will include 50+ MDA AURORATM digital satellites. This award marks our third LEO constellation contract in three years and our second constellation with Globalstar, further highlighting the continued momentum we are seeing in our Satellite Systems business driven by strong customer demand for our differentiated technology.”

“With a solid backlog of approximately $5bn today, and a robust opportunity funnel, MDA Space is well positioned to deliver another successful year in 2025 as we continue to execute our strategy to capitalize on growing market demand and deliver shareholder value.”

1 As defined in the “Non-IFRS Financial Measures” section

FULL YEAR 2024 HIGHLIGHTS

  • Order bookings for the full year totalled $2.4bn and were largely driven by awards in our Robotics & Space Operations and Satellite Systems businesses. Backlog of $4.4bn as of December 31, 2024 was up 41.6% compared to December 31, 2023.
  • Full year revenues of $1,080.1m were up 33.7% year-over-year, exceeding the Company’s full year revenue guidance of $1,045 – $1,065m. The year-over-year increase was driven by execution on our backlog, with strong contributions from our Satellite Systems and Robotics & Space Operations businesses.
  • Full year adjusted EBITDA of $217.1m was up 24.6% year-over-year driven by higher volumes across our businesses. Adjusted EBITDA margin of 20.1% in 2024 is consistent with the Company’s full year margin guidance of 19%-20% and compares to 21.6% in 2023.
  • Full year net income of $79.4m was up 62.7% year-over-year due to higher operating income. Diluted earnings per share of $0.63 in 2024 were up 57.5% compared to 2023.
  • Full year adjusted net income of $111.1m was up 13.5% year-over-year driven by higher operating income. Adjusted diluted earnings per share of $0.88 in 2024 were up 8.6% year-over- year.
  • Operating cash flow of $815.6m in 2024 compared to $13.5m in the prior year. The year-over-year increase in operating cash flow was driven by favourable working capital contributions primarily related to the Telesat Lightspeed program.
  • Free cash flow of $614.8m in 2024 compared to $(179.7)m in 2023. The year-over-year increase was driven by improving operating cash flow as a result of the aforementioned favourable working capital contributions.
  • Net cash position of $166.7m at year-end compared to net debt to adjusted EBITDA ratio of 2.4x as of December 31, 2023 as the Company utilized its strong operating cash flow in 2024 to make repayments to its revolving credit facility and deleverage the balance sheet while continuing to invest in its growth initiatives.

FOURTH QUARTER 2024 HIGHLIGHTS

  • Revenues of $346.6m in Q4 2024 were up 69.1% year-over-year driven by strong contributions from Satellite Systems business.
  • Adjusted EBITDA of $70.9m in Q4 2024 was up 68.4% year-over-year driven by higher volume of work as we execute on our backlog. Adjusted EBITDA margin of 20.5% in Q4 2024 was in line with the 20.5% margin reported in Q4 2023 and consistent with the Company’s full year adjusted EBITDA margin guidance of 19%-20%.
  • Net income of $25.1m in Q4 2024 was up 85.9% year-over-year driven by higher operating income. Diluted earnings per share of $0.20 were up 81.8% year-over-year.
  • Adjusted net income of $35.1m in Q4 2024 was up 26.3% year-over-year largely due to higher operating income. Adjusted diluted earnings per share of $0.28 were up 21.7% year-over- year.
  • Operating cash flow was $383.1m in Q4 2024 compared to $(41.2)m in Q4 2023. The year-over-year increase in operating cash flow was driven by positive working capital contributions primarily related to the Telesat Lightspeed program and the Globalstar Authorization to Proceed (ATP) contract.

2025 FINANCIAL OUTLOOK

As a trusted mission partner and leading global space technology provider, we are leveraging our capabilities and expertise to execute on targeted growth strategies across our end markets and business areas. Our strategic initiatives, which span across our three businesses, include investing in next generation space technology and services, expanding our presence in high growth markets and geographies, scaling and expanding skills, talent and operations to meet current and future market demand and leveraging strategic M&A to complement organic growth. We continue to make good progress against our long-term strategic plan. MDA Space is well positioned to capitalize on strong customer demand and robust market activity given our diverse and proven technology offerings. Our growth pipeline is significant and underpinned by existing and new programs and our book of business is healthy. We see activities ramping up in line with our expectations and are encouraged by the team’s solid execution. For fiscal 2025, we expect full year revenues to be $1.50 – $1.65bn, representing year-over-year growth of approximately 45% at the mid-point of guidance. We expect full year adjusted EBITDA to be $290 – $320 m, representing year-over-year growth of approximately 40% at the mid-point of guidance, and approximately 19% – 20% adjusted EBITDA margin. We expect capital expenditures to be $210 – $240m in 2025, comprising of growth investments to support the previously outlined growth initiatives across our business areas. We expect full year free cash flow to be neutral to positive in 2025. For Q1 2025, we expect revenues to be $315 – $335m as we continue to execute on our backlog. Note that the provided 2025 financial outlook does not incorporate any potential impact from the recently announced U.S. tariffs on articles imported from Canada or the retaliatory Canadian tariffs imposed on Canadian imports from the U.S. MDA Space continues to work collaboratively with our customers to identify solutions and explore mitigation strategies. The Company will continue to closely monitor developments and may elect to update its financial outlook if deemed necessary. (Source: PR Newswire)

 

07 Mar 25. inTEST Reports Fourth Quarter 2024 Revenue Grew 31% and Operating Income Increased 87% Year-over-Year

  • Achieved record $36.6m in revenue in fourth quarter; at high end of guidance range
  • Demonstrated effectiveness of market diversification strategy as improving back-end semi market helped offset weak front-end semi and slow industrial market
  • One-time acquisition inventory step-up expense1 in fourth quarter negatively impacted margin by 430 basis points resulting in gross margin of 39.7%
  • Operating income grew 87% year-over-year to $2.1m, or 5.7% of sales, in the fourth quarter
  • Net earnings increased 3% to $1.5m; Adjusted EBITDA2 increased to $4.4m from $2.4m in prior-year period, an 82% increase
  • Orders3 improved 11% year-over-year and 9% sequentially to $30.7m; backend semi business offset weakness in front-end with orders up 18% year-over-year; sequentially semi orders doubled
  • Generated $3.8m in cash from operations in 2024; paid down $7.8m in debt for the year

inTEST Corporation (NYSE American: INTT), a global supplier of innovative test and process technology solutions for use in manufacturing and testing in key target markets which include semiconductor (“semi”), industrial, automotive/EV, life sciences, defense/aerospace and security, today announced financial results for the fourth quarter and year ended December 31, 2024. Results include Alfamation S.p.A. (“acquisition” or “Alfamation”) from the date of the acquisition, which was March 12, 2024. Alfamation is included in the Electronic Test division.

Nick Grant, President and CEO, commented, “Our team delivered record revenue and strong operational results in the fourth quarter further validating the effectiveness of our market and customer diversification strategy as well as our focus on innovation. Growth in sales from our core business was driven by defense/aerospace, semi and life sciences and the benefit of $2m in shipments that had been pushed out from the previous quarter. Automotive/EV sales grew from the addition of Alfamation. Excluding the one-time acquisition inventory step-up1 impact, our gross margin exceeded our guidance for both the quarter and the year. Net earnings in the fourth quarter benefited from volume and cost actions. Importantly, we continued to demonstrate positive cash generation, and we believe we have the financial strength and flexibility to further drive organic and inorganic growth.”

He added, “Given stubbornly soft end markets, we are being cautious with our outlook for 2025. Nonetheless, we have seen gradual improvements in some back-end semi applications, and we continue to see new opportunities in defense/aero. We also expect benefits from our continued geographic expansion initiatives with our new partner in Japan and our ongoing investments in Southeast Asia. To further cost reduction efforts and to better serve customers, we are planning to consolidate the Netherlands-based operations of our Videology image capture business into our Mansfield, MA, facility which already houses our U.S. Videology operations. As a result, we are expecting approximately $0.6m of restructuring costs to be recognized throughout 2025 that should result in annualized savings of approximately $0.5m beginning in 2026. We continue to execute on our strategy to organically grow inTEST as we navigate the persistent weakness across our end markets.”

Fourth Quarter 2024 Review (see revenue by market and by segments in Sequentially, revenue was up $6.3m. Revenue from auto/EV, defense/aerospace, and security markets increased compared with the trailing third quarter. Also of note, there was a modest improvement in the semi market based on timing of front-end shipments out of backlog and improving demand for the Company’s back-end solutions. These improvements more than offset the decline in the industrial market.  Sequentially, gross profit of $14.5m increased on higher revenue despite the $1.6m charge to cost of goods sold related to inventory step-up expense. Higher sales of back-end semi test equipment, battery and flying probe automated test systems as well as improved operating efficiencies across most businesses contributed to stronger gross profit. Gross margin of 39.7% included the negative 430 basis point impact from the inventory step-up. Operating income increased significantly from higher gross profit combined with cost actions taken during the year and an amortization credit of $0.8m in the quarter. Year-over-year, fourth quarter revenue increased $8.7m. Alfamation contributed $8.5 m in revenue. Auto/EV, defense/aerospace and semi were the primary markets behind the improved revenue, overcoming the decrease in the industrial market. Year-over-year, gross margin contracted 490-basis points primarily due to the 430 basis points related to the inventory step-up charge. Operating expenses increased $1.1m over the prior-year period reflecting the addition of Alfamation which added $1.5m in costs. Alfamation operating expenses benefitted from the $0.8m amortization credit in the current quarter. Overall, the increase in costs due to the addition of Alfamation were partially offset by cost reduction efforts and operational improvements. Total operating expenses declined to 34.0% of sales compared with 40.7% in the fourth quarter of 2023. Net earnings for the quarter of $1.5m, or $0.12 per diluted share, improved 3% and flat, respectively. Adjusted net earnings (Non-GAAP)5 grew to $2.8m, or $0.23 adjusted EPS (Non-GAAP) 5. (Source: BUSINESS WIRE)

 

07 Mar 25. Cuashub.com said today that Alpine Eagle raises €10.25m for air-to-air counter-drone solution. German defense technology startup Alpine Eagle has secured €10.25m in seed funding to further develop its air-to-air counter-drone system. The funding round was led by IQ Capital, with participation from HTGF, Expeditions Fund and Sentris Capital, alongside existing investors General Catalyst and HCVC. Founded in 2023 by Jan-Hendrik Boelens , former Airbus chief engineer, Volocopter CTO, Quantum Systems CTO and Timo Breuer, former Microsoft Research and Fraunhofer Gesellschaft scientist, Alpine Eagle has developed an innovative air-to-air counter-drone system. The company’s proprietary Sentinel-OS counter-UAS software integrates machine learning, advanced sensors and computer vision to detect, classify and neutralize hostile drones, including loitering munitions. As military drone usage surges amid global conflicts such as the Ukraine war, Alpine Eagle’s technology aims to provide early warning and active defense against airborne threats. Recent drone incidents over German and UK military bases have also demonstrated the need for advanced countermeasures to protect critical infrastructure and supply chains. Alpine Eagle’s Sentinel-OS is an agnostic software stack that integrates with both commercial and bespoke hardware, allowing rapid deployment and customization for varied operational needs. The system offers early warning capabilities and is designed to function effectively in contested environments. Through the use of both active and passive sensors, the platform supports defensive swarm capabilities and can scale to counter different threat levels. The company is also advancing technology to intercept drones at stand-off distances, enhancing protection in both military and civilian settings.

CEO Jan-Hendrik Boelens emphasized the rapid evolution of drone warfare, stating: “It took around 50 years to get from the biplanes used in WWI to modern fighter jets. Yet, with the development of technology and low-cost hardware, it will take less than five years before we see fully automated drone-on-drone engagements.”

As threats continue to evolve, Alpine Eagle aims to provide cost-effective and scalable defensive solutions. Boelens highlighted the importance of European innovation in defense, highlighting the need for technological advancements to ensure the continent’s security and stability.

Support from investors and defense experts

Investors and defense leaders have recognized Alpine Eagle’s potential to shape the future of counter-drone technology. Archie Muirhead, Partner at IQ Capital, praised the startup’s rapid progress:

“What the Alpine Eagle team has managed to deliver in under 18 months is extraordinary. With this additional capital, we look forward to supporting them in enhancing resilience against unmanned threats.”

Major General Rupert Jones also emphasized the urgency of Alpine Eagle’s mission:

“The character of war is changing at an extraordinary pace, particularly due to the proliferation of unmanned systems. European defense startups like Alpine Eagle are at the forefront of innovation. Governments must collaborate with them to build a resilient European defense industry.”

Expansion and future plans

Since its inception, Alpine Eagle has secured contracts with the German military (Bundeswehr) and generated seven-digit revenues within its first year of operation. The latest funding will support hiring efforts and expansion beyond Germany, strengthening the company’s ability to meet growing global demand for counter-drone solutions. As European nations ramp up defense spending in response to rising security concerns, Alpine Eagle’s technology adds to the ever-increasing array of counter-drone solutions for safeguarding both military and civilian assets from emerging drone threats. https://cuashub.com/en/content/alpine-eagle-raises-e10-25-m-for-air-to-air-counter-drone-solution/ (Source: https://cuashub.com/)

 

10 Mar 25.  Patria will adjust its growth strategy and continue to develop its operating model to meet the significantly increasing demand. Defence and technology company Patria’s strong growth will continue in 2025 and in the coming years. The current operating model has achieved the goals set in 2021, enabled growth and increased order stock.   Patria will refine its growth strategy to respond to the significantly increasing demand and a constantly changing operating environment. Several changes in Patria’s operating environment require the alignment of strategic focus areas, and the company is also reviewing possible revisions to its operating model. As part of the development of its operating model, Patria will start change negotiations with its personnel.

“Patria’s operating environment has changed considerably since we developed our strategy extending until the end of 2025. Patria’s order stock and demand have increased significantly, especially in our vehicle programmes. Patria’s operating model needs to be as efficient and lean as possible in the changing operating environment to meet the increasing demand as well as to ensure the delivery of both existing and new orders. Simultaneously we want to continue to improve profitability,” says Esa Rautalinko, Patria’s President and CEO.

Patria’s planned operating model will focus on three key business areas The company wants to meet the evolving market needs more efficiently and will focus on three key business areas with profit responsibility, including Protected Mobility, Defence and Weapon Systems, and Sustainment Solutions.  The key strategic drivers include the substantial increase in defence spending on a national and EU level, the strong increase in the demand for defence solutions and equipment, the importance of territorial and the Arctic region’s defence and the development of Europe’s defence through Finland’s and Sweden’s NATO membership.

Change negotiations

Patria anticipates that its number of employees will grow significantly this year as well. The plan is not intended to reduce the number of personnel, but rather, if implemented, tasks would be reorganised and personnel would be transferred to new tasks that would open up at Patria. The total number of personnel covered by the negotiations is approximately 1,600, including white-collar employees, senior white-collar employees and management. There are no blue-collar employee positions covered by the negotiations.  The change negotiations will begin on 17 March 2025 and last for a minimum of six weeks. The Patria Group companies included in the negotiations are Patria Oyj, Patria Aviation Oy, Patria Aerostructures Oy, Patria ISP Oy and Patria Land Oy. In addition, were these plans to go ahead, the changes might have impacts on Patria’s operations outside Finland. For these operations the matter would be handled in accordance with local legal requirements in each country.   The aim is to keep the impact on customers or ongoing customer projects during the negotiations as minimal as possible and to always ensure the obligations related to the strategic partnership of the Finnish Defence Forces.  Patria will inform about the outcome of the change negotiations once they have been completed.  Millog Oy and its personnel, as part of the Patria Group, are not included in the scope of the negotiations.

 

10 Mar 25.  Shield AI Valued at $5.3bn After New Investment Round. Defense startup Shield AI has finalized a deal to raise $240m from investors at a valuation of $5.3bn — a funding round that adds billions to the company’s valuation, and underscores Silicon Valley investors’ interest in drones, autonomy and national security technology. The San Diego-based startup plans to use the cash infusion to expand its software offerings. Variations of Shield AI’s Hivemind software can pilot autonomous vehicles as well as help companies build their own autonomous drones, robots and other systems. Investors in the deal include aerospace and defense company L3Harris Technologies Inc. and South Korean aerospace company Hanwha Aerospace Co. — along with Andreessen Horowitz, US Innovative Technology and Washington Harbour. Bloomberg Beta, the venture capital arm of Bloomberg LP, is also an investor. Some details of the round were previously reported by the Information.

– Latham & Watkins LLP represented Shield AI in the funding round with a team led by partners Nima Movahedi, Kristen Grannis, and Haim Zaltzman, with associates Jack McKay and Christopher Siino. Advice was also provided on certain regulatory matters by partners Kyle Jefcoat and Patrick English.

Shield AI is most famous for its drone, called V-BAT, capable of vertical takeoff and landing. One is prominently displayed in its San Diego offices. But going forward, the company wants to be known for its software.

“This next phase is really about working with the small and medium businesses” that want to operate autonomous hardware across air, land or sea, Shield AI co-founder Brandon Tseng said. “We’ve spent a decade and $1 bn-plus building this.”

Shield AI was founded by Tseng, a former Navy Seal, and his brother Ryan Tseng, an engineer and former technical lead at Qualcomm Inc., who is now the startup’s chief executive officer. Shield AI is one of dozens of defense startups to emerge in recent years with enthusiastic backing from venture capitalists. Investors have poured record amounts into AI, space weapons and other defense technologies, hoping the Pentagon will increase its tech spending as modern warfare evolves. ShieldAI’s Hivemind software aims to make it easier for more developers and businesses to create autonomous hardware. The company’s tools can also help pilot autonomous vehicles ranging from one-way attack drones to F-16s, and support swarming operations. Shield says its software can allow vehicles to execute complex missions autonomously, including when GPS and communications are jammed. Brandon Tseng said interest from investors, including defense contractors and VCs, has recently surged — adding that the company turned down “massive checks” and that the current round was oversubscribed.

“Physical AI is the next thing and we are mobilized against it,” he said. “Shield AI aspires to service the autonomous needs for the defense sector, like Palantir services its intelligence needs.”

Tseng added that the company expects to close an additional round from other strategic investors in coming weeks that would be slightly smaller but would be “significant.” (Source: UAS VISION/ yahoo!finance ; Latham & Watkins)

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SPX CommTech, part of SPX Technologies Inc, innovates specialised technologies within the Radio Frequency (RF) spectrum to ensure a smarter, more secure future for all. Formed by TCI and ECS, SPX CommTech’s Battlespace portfolio enables defence and security teams to detect, defeat and exploit RF signals to enhance communications intelligence (COMINT) and counter unmanned aerial systems (Counter-UAS). Additionally, its Tactical Data Link portfolio allows intelligence gathering agencies, special forces, emergency response, and security teams to securely and reliably transfer video and data between enabled-aircraft and ground teams over long distances for airborne Intelligence, Surveillance, Reconnaissance (ISR).

For more information visit www.tcibr.com and www.enterprisecontrol.co.uk

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