BATTLESPACE Updates

   +44 (0)77689 54766
   

BUSINESS NEWS

by

Sponsored by SPX Communication Technologies (TCI & ECS)

 

www.tcibr.com

 

www.enterprisecontrol.co.uk

 

———————————————————————————————————————————————————————————————————————————————————————————————————————————————–

07 Aug 25. BAE Systems has made a strategic investment in Oxford Dynamics, a UK-based deep-tech start-up specialising in artificial intelligence (AI) and robotics, as part of its ongoing drive to identify and harness innovative technologies for rapid deployment. The collaboration will see BAE Systems combine its defence and security knowledge with Oxford Dynamics’ AI driven data expertise to explore ways to deliver next generation advantages to the UK and its allies across all domains of the modern battlespace; air, land, sea, space and cyber.   The first stage of this work will embed the Oxfordshire based company’s AI technology into BAE Systems’ Prophesea platform—a digital solution that enables defence organisations to maintain operational readiness of critical assets, such as warships, armoured vehicles and combat aircraft.

Andrea Thompson, Group Managing Director of BAE Systems’ Digital Intelligence business, said: “The landscape of warfare is rapidly evolving and embracing emerging technology is vital to keeping the UK safe. By working with companies such as Oxford Dynamics, we can help ensure that the nation is ready to unlock the advantages that innovation brings and help strengthen the UK’s sovereign defence and security landscape.”

Oxford Dynamics, founded in 2020, develops intelligent autonomous systems that collaborate to interpret data, coordinate action and make real-time decisions. Its technology is designed to help defence and security organisations to improve mission planning and respond to threats faster, with greater precision and in increasingly complex environments.

Dr Edward Jackson, Oxford Dynamics, said: “This collaboration embodies the UK Government’s Strategic Defence Review’s call to action: accelerate innovation, deliver sovereign capability and build a more integrated and lethal force. Our shared mission at Oxford Dynamics is to bring trusted AI to the front line and working with BAE Systems gives us the platform to quickly scale our technology into systems that will make a real difference to our armed forces.”

In the longer term, the collaboration will enable the integration of Oxford Dynamics’ capabilities across BAE Systems’ extensive portfolio. This will deliver sovereign, AI-enabled real time capability, empowering UK and allied forces with rapid decision-making support, operational autonomy and greater resilience in contested environments. The equity stake BAE Systems has taken in Oxford Dynamics, which will remain an independent entity, will support its next phase of growth; contributing to the UK Government’s ambition to bolster the nation’s defence industry and create skilled jobs.

 

07 Aug 25. Serco reaps the rewards of US defence pivot.

The outsourcer has kept its full-year outlook unchanged despite beating its own guidance in the first half.

  • Book-to-bill ratio improves to 130 per cent
  • 8 per cent dividend hike and new £50mn buyback

The shock loss of Serco’s (SRP) Australian immigration contract last November now feels like a distant memory. Its acquisition of Northrop Grumman’s (US:NOC) MT&S business has shifted the company further into defence and towards the US – a move that is already paying off.  The group beat guidance set just weeks ago, with a strong performance in North America helping to lift organic revenue by 3 per cent to £2.4bn and underlying operating profit by 2 per cent to £146mn in the first half. At the end of June, Serco had guided for 2 per cent organic growth and profit of at least £140m. The operating margin came in at 6 per cent, slightly ahead of the 5.9 per cent target, and nearly double that level in North America. A standout was the £3.2bn order intake, more than 80 per cent of which came from the defence sector following the MT&S acquisition. The order book rose 9 per cent to £14.5bn, with a healthy book-to-bill ratio of more than 130 per cent.  MT&S pushed net debt excluding leases higher but it remained below target at 0.9 times Ebitda thanks to an 84 per cent cash conversion rate and free cash flow of £91m. That supported an 8 per cent dividend increase and a new £50m share buyback.  Despite the beat, full-year guidance is unchanged due to the Australian contract loss and higher UK operating costs, mainly from the national insurance hike. Still, Serco is well placed to benefit from rising defence demand, which could offset weaker spending elsewhere. The shares trade on 12.8 times forward earnings, still below their five-year average and at a steep discount to defence-focused peers. Buy. Last IC view: Buy, 195p, 19 June 2025. (Source: Investors Chronicle)

 

06 Aug 25. Curtiss-Wright Corporation (NYSE: CW) reports financial results for the second quarter ended June 30, 2025.

Second Quarter 2025 Highlights:

  • Reported sales of $877m, up 12%, operating income of $156m, operating margin of 17.8%, and diluted earnings per share (EPS) of $3.19;
  • Adjusted operating income of $160m, up 20%;
  • Adjusted operating margin of 18.3%, up 130 basis points;
  • Adjusted diluted EPS of $3.23, up 21%;
  • New orders of $1.0bn, reflecting a 1.14x book-to-bill; and
  • Free cash flow (FCF) of $11m.

Raised Full-Year 2025 Adjusted Financial Outlook:

  • Sales guidance increased to new range of 9% to 10% growth (previously 8% to 9%), which continues to reflect growth in the majority of Curtiss-Wright’s end markets;
  • Operating income guidance increased to new range of 15% to 18% growth (previously 13% to 16%);
  • Operating margin guidance range increased by 20 basis points to 18.5% to 18.7%, now up 100 to 120 basis points compared with the prior year;
  • Diluted EPS guidance increased to new range of $12.70 to $13.00, now up 16% to 19% (previously $12.45 to $12.80, up 14% to 17%);
  • FCF guidance range increased to $520 to $535m, which continues to reflect greater than 105% FCF conversion; and
  • Full-year 2025 guidance includes the potential direct impacts from tariffs on our operations as well as mitigating actions.

“Curtiss-Wright delivered a strong second quarter, highlighted by double-digit revenue growth in both our total A&D and Commercial markets, significant operating margin expansion, greater than 20% growth in Adjusted diluted EPS, and better-than-expected free cash flow generation,” said Lynn M. Bamford, Chair and CEO of Curtiss-Wright Corporation. “Our results also reflected the benefits of the Company’s ongoing restructuring and operational excellence initiatives, and our dedication to making continued investments that drive profitable growth.”

“Based on the strong first-half results and our outlook for the remainder of 2025, we have increased our full-year Adjusted guidance for sales, operating income, diluted EPS and free cash flow. We are successfully executing our Pivot to Growth strategy and building strong momentum to compound sustained profitable growth. In addition, we remain extremely well aligned to many favorable secular growth trends across our markets, today and well into the future.”

Second Quarter 2025 Operating Results

  • Sales of $877m increased 12% compared with the prior year period;
  • Total A&D market sales increased 12%, while total Commercial market sales increased 10%;
  • In our A&D markets, stronger than expected growth in the defense markets was driven by higher submarine revenues in naval defense and increased sales of defense electronics products, as well as higher OEM sales in the commercial aerospace market;
  • In our Commercial markets, strong growth in the power & process market was principally driven by the contribution from our Ultra Energy acquisition and higher organic sales of commercial nuclear products, while sales in the general industrial market were flat; and
  • Adjusted operating income of $160m increased 20%, while Adjusted operating margin increased 130 basis points to 18.3%, driven by favorable overhead absorption on higher revenues in all three segments, the benefits of the Company’s restructuring and operational excellence initiatives, favorable mix in the Naval & Power segment, and favorable foreign currency translation, partially offset by higher investment in research and development.

Second Quarter 2025 Segment Performance

Aerospace & Industrial

  • Sales of $239m, up $6m, or 3%;
  • Commercial aerospace market revenue growth reflected increased demand and higher OEM sales of sensors products and surface treatment services on narrowbody and widebody platforms;
  • General industrial market revenue was essentially flat, as the benefit of higher sales of industrial vehicle products serving on-highway vehicle platforms and increased surface treatment services were offset by lower global off-highway and specialty industrial vehicle sales; and
  • Adjusted operating income was $40 m, up 5% from the prior year, while adjusted operating margin increased 40 basis points to 16.6%, driven by favorable absorption on higher revenues, the benefits of the Company’s restructuring initiatives and favorable foreign currency translation.

Defense Electronics

  • Sales of $384m, up $61m, or 19%;
  • Revenue growth in the naval defense market was principally driven by our strong order book and the timing of revenues on the Columbia-class submarine program, in addition to increased revenues supporting next-generation submarine development and higher sales of aircraft handling systems equipment to international customers;
  • Higher power & process market revenues mainly reflected the contribution from our prior year acquisition to our commercial nuclear and process markets, as well as higher organic sales of commercial nuclear products supporting the maintenance of existing operating reactors and the development of next-generation advanced reactors; and
  • Adjusted operating income was $64m, up 36% from the prior year, while adjusted operating margin increased 210 basis points to 16.5%, due to favorable absorption on higher revenues and favorable mix of products, partially offset by higher investment in research and development.

Change

  • Free cash flow of $117m increased $17m, as higher cash earnings and improved working capital were partially offset by higher capital investments in all three segments.

New Orders and Backlog

  • New orders of $1.0bn increased slightly compared with the prior year principally reflecting strong demand in our commercial nuclear and commercial aerospace end markets, mainly offset by the timing of orders in naval defense; and
  • Backlog of $3.9bn, up 12% from December 31, 2024, reflecting strong demand across the A&D and Commercial markets.

Share Repurchase and Dividends

  • During the second quarter, the Company repurchased 59,501 shares of its common stock for approximately $21 m; and
  • The Company declared a quarterly dividend of $0.24 a share, representing a $0.03 or 14% increase from the previous quarter.

 

07 Aug 25. MTI Wireless Edge (MWE) Front run this underrated company’s trading update.

Simon Thompson: A decent share price rally is a distinct possibility for the defence technology stock

  • Multiple contract wins in recent months
  • Current year cash-adjusted PE ratio of 10
  • Prospective dividend yield of 5.5 per cent

Israel-based technology group MTI Wireless Edge (MWE: 46.5p) has announced a raft of contract awards since reporting first-quarter results in mid-May. However, despite the strengthening contract momentum and expectations of high single-digit growth in annual pre-tax profit to $5.2m, the shares are priced on a current year cash-adjusted price/earnings (PE) of 10. They also offer a free cash flow yield of 11 per cent and an attractive prospective dividend yield of 5.5 per cent. A decent share price rally looks a distinct possibility when MTI releases interim results in the coming weeks, so front-running what should be a positive trading update is a sensible strategy. I anticipate a markedly improved performance this year from 60 per cent owned subsidiary PSK, an Israeli developer, manufacturer and integrator of communication and monitoring systems for the country’s defence market. Having reported an operating loss of $0.8mn (£0.6mn) on revenue of $3.7m in 2024, PSK has since been restructured and analysts at house broker Shore Capital expect it to return to profitability in 2025. A raft of contract wins adds weight to that view. In recent months, PSK secured a $0.8m contract for delivery of a test range shelter and $1.4m of defence orders from three existing customers, of which 75 per cent will be delivered this year. Chief executive Moni Borovitz notes that PSK’s revenue in the first half of the year together with existing backlog for 2025 is now “ahead of internal budgets for the current year . . . and the business has good visibility on a pipeline of upcoming tenders.” That’s important because losses at PSK have been holding back MTI’s Summit division, which represents 40 international suppliers of radio frequency/microwave components and sells these products as well as turnkey solutions (fixed and mobile communication, telemetry and signal intelligence systems) to Israeli customers. Delivery of the unit’s order backlog and a much improved performance from PSK underpin market expectations of a doubling of divisional operating profit to $1mn on 5 per cent higher revenue in 2025.

A diversified revenue stream mitigates earnings risk

MTI’s antenna division, a one-stop shop for the sale of ‘off the shelf’ flat and parabolic antennas, has also been winning notable contracts, the latest being a military order worth $1.6m from three existing customers for delivery over the next 20 months. Borovitz said orders “highlight the scope of our technology and capabilities, encompassing a range of solutions including airborne antenna, anti-jamming GPS antenna and sophisticated beam forming antenna to support drone management systems.” Increased global defence spending by governments is creating a positive market environment and not just in the Middle East, where antennas used during recent conflicts need to be restocked and higher stock levels maintained in the future. Indeed, the antenna division increased first quarter revenue 22 per cent to $4m and trebled operating profit to $0.34mn, which was more than in the first half of 2024. Around 70 per cent of revenue was derived from 5G backhaul antenna and military antenna, the growth engines of the business. Bearing this in mind, Borovitz points out that the rollout of 5G networks is expanding each year and MTI is making strong inroads into the substantial Indian market.

MTI’s Mottech real-time irrigation monitoring, control and reporting software, which gives investors exposure to the climate change theme, is the group’s largest income generator, accounting for around half of operating profit. The business continues to prove popular with municipal authorities, commercial organisations and the agricultural industry. Contracts secured in the first half include a €1mn order with a client in Italy to support accurate irrigation of citrus fruit and a three-year contract extension worth €1.5m (£1.3m) with one of the largest municipalities in Israel. Recent wins also have higher gross margins, so they should support the profit growth embedded in analysts’ forecasts.

For good measure, there is scope for MTI to make earnings-enhancing acquisitions funded by net cash of $8m (7p). Buy. (Source: Investors Chronicle)

 

07 Aug 25. Firefly raises $868m in upsized US IPO as it sets sights on a positive liftoff. Northrop Grumman-backed Firefly Aerospace priced its upsized U.S. initial public offering at $45 per share on Wednesday, raising $868.3m, and indicating strong demand for the buzzy space technology startup that put a lander on the moon. Firefly sold about 19.3m shares priced above its marketed range of $41 and $43 apiece. Previously, it had planned to sell 16.2m shares of its stock. This values Cedar Park, Texas-based Firefly Aerospace at about $6.32bn. In a nascent but rapidly growing commercial space industry, Firefly’s IPO has attracted investor attention because it successfully landed its uncrewed Blue Ghost spacecraft on the moon in its first attempt in March. U.S. President Donald Trump’s focus on commercializing space technology and safeguarding the national interests in space has attracted venture capital firms and billionaires. Elon Musk’s SpaceX — the most valuable private company in the world — has become a critical part of the U.S. satellite network, even prompting a need across the government to look for more contractors. (Source: Reuters)

 

07 Aug 25. Rheinmetall slightly misses Q2 sales expectations but confirms target. Rheinmetall (RHMG.DE) on Thursday posted slightly worse-than-expected second-quarter sales due in part to a delay in German defence contracts being awarded but confirmed its full-year forecast. The German defence company reported sales of 2.43bn euros ($2.84bn) in the three months to June, below the 2.53bn euro consensus forecast according to a company-provided poll. The maker of bombs, grenades, battle tanks and infantry fighting vehicles confirmed its 2025 guidance for sales growth of at least 25% to 30% after the previous year’s sales of 9.75bn euros. (Source: Reuters)

 

07 Aug 25. Rheinmetall stays on course for success – defence business grows by more than a third.

  • Group sales rises by 24% to €4.7bn, with 36% sales growth in the defence business
  • Group operating result climbs from €404 m to €475m, an increase of 18% – operating result margin at 10.0% at Group level
  • Defence business: Operating result rises by 20% to €464m, operating result margin reaches 12.4%
  •  Rheinmetall Nomination slightly below previous year’s level at €14bn – delayed order placement following new elections in Germany
  •  High order backlog: Rheinmetall backlog reaches €63bn
  •  Operating free cash flow at €-644m – influenced by high investments and order-related increase in inventories
  •  Forecast for 2025 confirmed

Düsseldorf-based Rheinmetall AG closes the first half of fiscal 2025 with new record figures for both sales and income. In light of the decisions made at the NATO summit in June and in view of significantly increasing defence budgets in numerous countries, demand in the defence business remains high. The core markets continue to be Europe, Germany and Ukraine. Due to the political situation following the elections in spring 2025, the awarding of contracts in Germany will not begin until well into the second half of the year. Nevertheless, the technology Group’s order books are full, reaching record levels. The Group’s civil business lagged behind the previous year due to the continuing weak market environment. Due to the current market situation, the continuing very good order situation and the expected business development in the second half of 2025, the Group management confirms at least the current annual forecast for expected sales growth and operating result margin within the Group. As in the first quarter of 2025, the Group continues to anticipate an adjustment to the annual forecast if the expected increase in demand due to recent geopolitical developments materialises.

Armin Papperger, CEO of Rheinmetall AG, on the company’s development: “Rheinmetall is successfully on its way to becoming a global defence champion. We are now also a serious partner for US companies. Our order books are full and will continue to grow in the future.”

Armin Papperger: “We stand by our responsibility for our democracy and the independence of Europe, where we are contacted by many countries regarding new projects. We will take advantage of these opportunities. We are in the process of significantly strengthening our foothold in Central and Eastern Europe. We are working hard to further increase sales significantly and are investing in many European countries to create new capacity. We are constructing new plants, expanding existing ones and have also converted facilities from civil to defence production. We will soon be inaugurating Europe’s largest ammunition factory in Lower Saxony.”

Rheinmetall Group: Sales growth of 24% – Consolidated operating result up 18%

In the first half of fiscal 2025, consolidated sales climbed significantly by €919m or 24% year-on-year to €4,735m (previous year: €3,815m). Business with the German armed forces is becoming increasingly important: The share of sales generated in Germany rose by 5 percentage points to 29% in the first half of the year compared with the same period last year, while the share of sales generated abroad amounted to 71%.

In the first half of fiscal 2025, the operating result was €475m, up €71 m or 18% from the previous year’s figure of €404m. The defence-oriented business of the Group also contributed the lion’s share here: The operating result from business with the armed forces amounted to €464m in the first half of the year, representing an increase of 20% compared with the previous year’s figure (€385m).

Due to the difficulties in civil business and the expenses for the start of production at the Weeze/Lower Rhine location, the operating result margin at Group level fell slightly to 10.0% compared with the same period of the previous year (previous year: 10.6%).

Undiluted earnings per share from continuing operations improved in the first six months of the 2025 fiscal year compared with the same period of the previous year, from €4.21 to €5.02.

Operating free cash flow from continuing operations fell significantly by €626m to €-644m compared with the same period last year, when it stood at €-19m. The decline is mainly due to the increase in cash-effective investments, particularly for the construction of new plants and capacity expansion at existing locations, as well as order-related inventory build-up.

The value of Rheinmetall Nomination decreased by 11% compared to the same period last year to €14 bn (previous year: €15 bn). The delay in passing the federal budget following the change of government as a result of the new elections, combined with the NATO summit at the end of June 2025, has delayed order intake.

Nevertheless, Rheinmetall backlog reached a new all-time high of €63bn (previous year: €49bn) as of June 30, 2025 following several major orders. In addition to orders on hand, Backlog also includes the call-offs expected from framework agreements in place with defence customers and the potential from contracts with civil clients.

Vehicle systems: Vehicle Systems: Sales up by almost 50% compared to the previous year

Sales at Vehicle Systems, which is primarily active in the military wheeled and tracked vehicles division, amounted to €1,897m after six months of the 2025 fiscal year, up €597m or 46% on the previous year’s figure. The positive development is mainly attributable to the delivery of pre-produced swap body trucks for the German armed forces, the launch of tactical vehicle programmes with Germany and other international customers, and increased service activities. Loc Performance in the USA, which was acquired on November 29, 2024, contributed €231m to sales growth.

Rheinmetall Nomination for the segment – the sum of order intake and the volume of newly concluded framework agreements with defence customers – was €1,427m in the first half of the 2025 fiscal year, €1,687m below the comparable figure for the previous year, which was significantly influenced by the order for the German armed forces’ Boxer wheeled armoured vehicle (‘Heavy Weapons Carrier Infantry’) worth €1,643m and the associated service contract worth €628m.

The segment’s Rheinmetall backlog – the sum of the order backlog and expected call-offs from existing framework agreements with defence customers – exceeded the previous year’s figure by €2,309m or 13% to €20,457m (June 30, 2025). The operating result improved from €119m to €179m. The increase is mainly due to sales growth. At 9.4%, the operating result margin is slightly above the previous year’s figure of 9.2%.

Investments in the first half of the 2025 fiscal year amounted to €67 m, €23m above the previous year’s figure of €43m. The increase is due to investments in locations in the USA and the United Kingdom.

Weapon and Ammunition: Record sales thanks to ammunition orders

Weapon and Ammunition achieved record sales of €1,323m in the first six months of fiscal 2025 with its activities in weapon systems, ammunition and protection systems, exceeding the previous year’s figure by €269m or 26%. The increase compared to the same period last year is mainly attributable to higher ammunition deliveries. In addition to increased sales of tank ammunition, several medium-calibre ammunition and artillery orders for NATO member states and Ukraine were the main growth drivers.

At €2,151m after the first six months of the 2025 fiscal year, Rheinmetall Nomination is below the previous year’s figure (previous year: €8,828m), in which the increase in a framework agreement for 155mm artillery ammunition for the German customer was booked at €7,121 m. Significant orders in the first half of fiscal 2025 include orders for 155mm artillery ammunition for European NATO countries.

The Rheinmetall backlog reached €21,593 m as of June 30, 2025. Compared to the previous year’s figure (June 30, 2024: €18,965 m), this represents an increase of €2,628 m or 14%.

At the end of the first half of fiscal 2025, operating result rose by €75m or 36% to €280m (previous year: €206 m). The main driver for this was the significant increase in sales volume. As a result, the operating result margin increased from 19.5% to 21.2%, despite higher personnel and material costs.

Investments amounted to €188m, significantly exceeding the previous year’s level of €79m due to transformation and capacity expansion projects in several companies. Particularly noteworthy is the investment in the new “Lower Saxony plant”, which will significantly increase Rheinmetall’s production capacity in the artillery ammunition division and has already commenced trial operations.

Electronic Solutions: Rheinmetall nomination significantly increased again

Electronic Solutions, with products in the digitalisation divisions of the armed forces, infantry equipment, air defence and simulation, increased its sales by €297m to €944m after six months of the 2025 fiscal year (previous year: €647m); this corresponds to growth of 46%. The increase in sales is mainly attributable to the TaWAN digitisation project and the framework agreement for headsets with hearing protection, both for German customers, as well as the delivery of air defence systems to European customers.

Rheinmetall Nomination increased significantly compared to the same period last year, rising by €6,964m or 231% to €9,984m. The largest individual orders in the first half of the 2025 fiscal year related to the two framework contracts for a deployable, platform-based communications and radio management system (TaWAN LBO) and the replenishment of soldier systems “Future Soldier – Extended System” (IdZ-ES), both for the German customer. Rheinmetall backlog as of June 30, 2025 amounted to €16,931m, up 156% on the previous year (previous year: €6,609m).

Operating result improved significantly to €71m by the end of the first half of fiscal 2025, compared with €53m in the previous year. The operating result margin decreased to 7.6% (previous year: 8.3%) due to expenses for preparation at the Weeze location for the start of production of the F-35 centre fuselage sections at the third quarter of 2025.

Investments increased by €55m to €75m during the reporting period. The main focus was on setting up the necessary IT infrastructure and technical equipment at the plant in the Weeze location, where production of the centre fuselage sections for the F-35 fighter jet has now entered the start-up phase.

Power Systems: Sales down on previous year due to ongoing market weakness

As part of the Rheinmetall Group’s decision to focus on business with defence customers and security technology, activities in civil business are no longer part of its core strategic business. Technological expertise for civil markets is being pooled in the Power Systems division.

Sales at Power Systems with a volume of €987m in the reporting period remained below the previous year’s figure (previous year: €1,056m). Booked business for the first six months of the 2025 fiscal year was also below the previous year’s figure (previous year: €1,357m) at €989m. The main factor is the ongoing economic downturn in the automotive industry and the associated delay in the implementation of ongoing and planned projects. The nominated backlog as of June 30, 2025 fell by 9% to €7,192 m (previous year: €7,938m).

Operating result fell by 58% to €24m (previous year: €57m), mainly due to declining sales in a weak market environment and changes in product focus. Expenses related to the strategic transformation also impacted operating result. As a result, the operating result margin was 2.4% (previous year: 5.4%).

Outlook: Annual forecast remains unchanged

Based on the expected business development until the end of the year, Rheinmetall confirms that, after the first half of the 2025 fiscal year, it will at least meet its sales and result forecast for the full year 2025, with growth in consolidated sales of 25% to 30% (previous year’s sales: €9,751m). Based on this revenue forecast, Rheinmetall expects the Group, including acquisitions, to achieve an improvement in operating earnings and an operating result margin of around 15.5% in the current 2025 fiscal year, taking into account holding costs (previous year: 15.2%).

This outlook does not yet take into account the improvement in market potential that is likely to result from the geopolitical developments of recent months, particularly in the markets of Europe, Germany and Ukraine, which are particularly relevant for Rheinmetall. Therefore, Rheinmetall will adjust its forecasts as necessary in line with the increasing clarification of the respective requirements of its defence customers in the further course of the year.

 

06 Aug 25. EOTECH Acquires VK Integrated Systems, Expands into Tactical Networking and Battlefield Sensor Integration. In a strategic move to expand its role in the defense technology ecosystem, EOTECH announced today the acquisition of VK Integrated Systems (VKIS), a Tennessee-based developer of advanced weapon electronics and battlefield networking solutions. The acquisition continues EOTECH’s evolution beyond optics into a vertically integrated, American-made defense platform focused on situational awareness, data integration, and mission-ready systems.

“This is a continuation of our thesis,” said Joseph Caradonna, CEO of EOTECH. “We’re building an integrated, American-made platform for mission-critical awareness, where hardware, software, and sensors work as one. It’s a systems architecture approach, not just a product expansion.”

Founded in 2014, VKIS specializes in real-time warfighter technologies, including TAK-based situational awareness tools, weapon-mounted sensors, and edge-computing systems. These capabilities directly support U.S. efforts to digitize the battlefield, modernize legacy systems, and bring C5ISR functionality closer to the tactical edge.

VKIS Capabilities Now Joining EOTECH Include:

  • Weapon Electronics & Sensors – Devices like the SIOS and VICE modules provide real-time orientation and targeting data from the weapon platform.
  • TAK Server as a Service (TSaaS) – Turnkey GovCloud solutions for secure deployment of TAK infrastructure.
  • ATAK Plugin Development – Custom extensions to the Android Team Awareness Kit (ATAK) ecosystem.
  • TAK Stack – A free-use platform that simplifies access to geospatial maps, plugins, and field tools.

“EOTECH’s scale and trust in the field make this a natural fit,” said Vasilios Kapogianis, President and CEO of VKIS. “Our mission has always been to give warfighters more awareness, more control, and more survivability. With EOTECH, we can deliver that capability faster and further.”

VKIS will continue operations from its Clarksville, Tennessee headquarters. The acquisition follows a string of U.S. defense investments aimed at tightening supply chains and scaling dual-use systems that blend rugged hardware with real-time software integration. (Source: ASD Network)

 

05 Aug 25. TransDigm Group Incorporated (NYSE: TDG), a leading global designer, producer and supplier of highly engineered aircraft components, today reported results for the third quarter ended June 28, 2025.

Third quarter highlights include:

  • Net sales of $2,237m, up 9% from $2,046m in the prior year’s quarter;
  • Net income of $493m, up 7% from the prior year’s quarter;
  • Earnings per share of $8.47, up 6% from the prior year’s quarter;
  • EBITDA As Defined of $1,217m, up 12% from $1,091m in the prior year’s quarter;
  • EBITDA As Defined margin of 54.4%;
  • Adjusted earnings per share of $9.60, up 7% from $9.00 in the prior year’s quarter; and
  • Upward revision to fiscal 2025 EBITDA As Defined and adjusted earnings per share mid-point guidance.

Quarter-to-Date Results

Net sales for the quarter increased 9.3%, or $191m, to $2,237m from $2,046 m in the comparable quarter a year ago. Organic sales growth as a percentage of net sales was 6.3%.

Net income for the quarter increased $32m, or 6.9%, to $493m from $461m in the comparable quarter a year ago. The increase in net income primarily reflects the increase in net sales described above, the application of our value-driven operating strategy, lower one-time refinancing costs and lower acquisition transaction-related expenses. The increase was partially offset by higher interest expense.

Adjusted net income for the quarter increased 7.1% to $558m, or $9.60 per share, from $521m, or $9.00 per share, in the comparable quarter a year ago.

EBITDA for the quarter increased 12.9% to $1,123m from $995m for the comparable quarter a year ago. EBITDA As Defined for the quarter increased 11.5% to $1,217m compared with $1,091m in the comparable quarter a year ago. EBITDA As Defined as a percentage of net sales for the quarter was 54.4% compared with 53.3% in the comparable quarter a year ago.

“Our commercial aftermarket and defense markets performed well this quarter, and as expected, growth within the commercial aftermarket continued to moderate. However, sales in the commercial OEM market fell short of our expectations, primarily due to lower than anticipated OEM build rates and inventory destocking,” stated Kevin Stein, TransDigm Group’s President and Chief Executive Officer. “Our teams successfully navigated the challenges that came with the uneven demand in our commercial OEM market to deliver a healthy EBITDA As Defined margin of 54.4%, up approximately 110 basis points from the comparable prior year period and including an approximately 70 basis point headwind due to the full quarter impact of last year’s acquisitions.

Additionally, we are excited to have recently completed the acquisition of Servotronics, Inc., and to have announced our agreement to acquire the Simmonds Precision Products, Inc. Business (“Simmonds”) of Goodrich Corporation from RTX Corporation. In the aggregate, over $900 m in capital is expected to be deployed for these two acquisitions. These businesses fit well with our long-standing strategy, and we expect each of these acquisitions to create equity value in-line with our long-term equity-like return objectives.

As always, we remain focused on our operating strategy, value drivers and effectively managing our cost structure. We look forward to the final quarter of our fiscal 2025 and the opportunity to continue driving value for our shareholders.”

Financing Activity

During the quarter, on May 20, 2025, TransDigm successfully completed a private offering of $2,650m of 6.375% Senior Subordinated Notes due May 31, 2033. TransDigm used the net proceeds from the offering, plus cash on hand, to redeem all of its $2,650m of outstanding 5.50% Senior Subordinated Notes due 2027.

Share Repurchase Activity

During the third quarter of fiscal 2025, TransDigm repurchased 105,567 shares of its common stock at an average price per share of $1,240.91 for a total amount of approximately $131 m. For the thirty-nine week period ended June 28, 2025, TransDigm repurchased 401,036 shares of its common stock at an average price per share of $1,246.71 for a total amount of approximately $500 m.

Acquisition Activity Subsequent to the Quarter

Subsequent to the quarter, and as previously announced on June 30, 2025, TransDigm has entered into a definitive agreement to acquire Simmonds from RTX Corporation for approximately $765 m in cash. Simmonds is a leading global designer and manufacturer of fuel & proximity sensing and structural health monitoring solutions for the aerospace and defense end markets.

Additionally, on July 1, 2025, TransDigm completed the acquisition of Servotronics, Inc. for $47.00 per share in cash. Servotronics, Inc. is a leading global designer and manufacturer of servo controls and other advanced technology components for aerospace and defense applications.

Year-to-Date Results

Net sales for the thirty-nine week period ended June 28, 2025 increased 11.1%, or $640m, to $6,394m from $5,754 m in the comparable period a year ago. Organic sales growth as a percentage of net sales was 6.6%.

Net income for the thirty-nine week period ended June 28, 2025 increased $217m, or 17.4%, to $1,465 m from $1,248m in the comparable period a year ago. The increase in net income primarily reflects the increase in net sales described above, the application of our value-driven operating strategy, and lower one-time refinancing costs, non-cash stock and deferred compensation expense and acquisition transaction-related expenses. The increase was partially offset by higher interest expense and income tax expense.

GAAP earnings per share were reduced for the thirty-nine week periods ended June 28, 2025 and June 29, 2024 by $0.83 per share and $1.75 per share, respectively, as a result of dividend equivalent payments made during each period. As a reminder, GAAP earnings per share are reduced when TransDigm makes dividend equivalent payments pursuant to its stock option plans. These dividend equivalent payments are made during TransDigm’s first fiscal quarter each year and also upon payment of any special dividends.

Adjusted net income for the thirty-nine week period ended June 28, 2025 increased 10.5% to $1,543m, or $26.53 per share, from $1,396 m, or $24.15 per share, in the comparable period a year ago.

EBITDA for the thirty-nine week period ended June 28, 2025 increased 19.0% to $3,299m from $2,772m for the comparable period a year ago. EBITDA As Defined for the period increased 13.8% to $3,441 m compared with $3,023 m in the comparable period a year ago. EBITDA As Defined as a percentage of net sales for the period was 53.8% compared with 52.5% in the comparable period a year ago.

Please see the attached tables for a reconciliation of net income to EBITDA, EBITDA As Defined, and adjusted net income; a reconciliation of net cash provided by operating activities to EBITDA and EBITDA As Defined; and a reconciliation of earnings per share to adjusted earnings per share for the periods discussed in this press release.

Fiscal 2025 Outlook

Mr. Stein stated, “We are raising the mid-point of our fiscal 2025 EBITDA As Defined guidance to reflect our operating performance to date and expectations for the fourth quarter. However, we are decreasing our sales guidance primarily due to lower than expected commercial OEM sales, driven mainly by lower than anticipated OEM build rates and inventory destocking. At the mid-point we are decreasing sales guidance by $60m, and increasing EBITDA As Defined guidance by $40 m and adjusted earnings per share guidance by $0.27 per share.

Additionally, we are maintaining the full year market channel growth assumption for the commercial aftermarket and defense market as underlying market fundamentals have not meaningfully changed. Our commercial OEM market growth assumption has been revised to reflect third quarter results and current expectations for the remainder of fiscal 2025.”

TransDigm expects fiscal 2025 financial guidance to be as follows:

  • Net sales are anticipated to be in the range of $8,760m to $8,820m compared with $7,940m in fiscal 2024, an increase of 10.7% at the midpoint;
  • Net income is anticipated to be in the range of $1,932m to $1,980 m compared with $1,715 m in fiscal 2024, an increase of 14.1% at the midpoint;
  • Earnings per share is expected to be in the range of $32.39 to $33.21 per share based upon weighted average shares outstanding of 58.175 m shares, compared with $25.62 per share in fiscal 2024, which is an increase of 28.0% at the midpoint;
  • EBITDA As Defined is anticipated to be in the range of $4,695m to $4,755m compared with $4,173m in fiscal 2024, an increase of 13.2% at the midpoint (corresponding to an EBITDA As Defined margin guide of approximately 53.8% for fiscal 2025);
  • Adjusted earnings per share is expected to be in the range of $36.33 to $37.15 per share compared with $33.99 per share in fiscal 2024, an increase of 8.1% at the midpoint; and
  • Fiscal 2025 outlook is based on the following market growth assumptions:
  • Commercial OEM revenue growth in the flat to low single-digit percentage range;
  • Commercial aftermarket revenue growth in the high single-digit to low double-digit percentage range; and
  • Defense revenue growth in the high single-digit to low double-digit percentage range.

Please see the attached Table 6 for a reconciliation of EBITDA, EBITDA As Defined to net income and reported earnings per share to adjusted earnings per share guidance midpoint estimated for the fiscal year ending September 30, 2025. Additionally, please see attached Table 7 for comparison of the current fiscal year 2025 guidance versus the previously issued fiscal year 2025 guidance. (Source: PR Newswire)

 

05 Aug 25. Leidos Posts Strong Second Quarter Results and Raises Full-Year Guidance.

  • Revenues of $4.3bn, up 3% organically year-over-year
  • Net income of $393m or $3.01 per diluted share
  • Record Adjusted EBITDA (non-GAAP) of $647 m and Adjusted EBITDA margin of 15.2%
  • Record Non-GAAP Diluted Earnings per Share of $3.21, up 22% year-over-year
  • Cash Flows from Operations of $486m; Free Cash Flow (non-GAAP) of $457m

Leidos Holdings, Inc. (NYSE: LDOS) today reported financial results for the second quarter of fiscal year 2025, highlighted by robust earnings and revenue growth.

“Our second quarter results showcase the strength of our differentiated portfolio and the alignment of our NorthStar 2030 strategy with the priorities of the new Administration,” said Leidos Chief Executive Officer Tom Bell. “With record margins, continued double-digit EPS growth, and strong cash conversion, we are delivering on our financial commitments, and we are strategically deploying capital to grow shareholder value. We are pleased to improve our guidance outlook for 2025 given two quarters of exceptional performance and enhanced clarity on the macro environment.”

Revenues for the quarter were $4.25 bn, up 3% compared to the second quarter of 2024. Revenues grew year-over-year due to increased demand across all customer segments, especially in Defense Systems given strong demand in innovative military products. For the second quarter, net income was $393m, or $3.01 per diluted share. Net income and diluted EPS were up 21% and 27% year-over-year, respectively. Net income margin of 9.2% increased from 7.8% in the second quarter of 2024. Adjusted EBITDA was $647m for the second quarter, up 16% year-over-year. Adjusted EBITDA margin of 15.2% increased from 13.5% in the second quarter of 2024. Non-GAAP net income was $419m for the second quarter, up 16% year-over-year, and non-GAAP diluted EPS for the quarter was $3.21, up 22% year-over-year. The primary drivers of increased profitability were prudent cost management, improved program execution, and a $25 m insurance reimbursement for legal costs primarily incurred in prior periods.

CASH FLOW SUMMARY

In the second quarter, Leidos generated $486m of net cash provided by operating activities and used $314m and $83m in investing and financing activities, respectively. The primary investing activity was the acquisition of Kudu Dynamics on May 23, 2025, for preliminary purchase consideration of $291m, net of $29m cash acquired. The acquisition squarely aligns with Leidos’ NorthStar 2030 strategy, accelerating its rapid scaling of artificial intelligence-enabled cyber capabilities for defense, intelligence and homeland security customers. Kudu Dynamics is included within the National Security & Digital segment. In addition, investing activities included $29m in property, equipment and software payments, which resulted in quarterly free cash flow of $457 m. Financing activities were driven by $61m returned to shareholders, including $9 m in share repurchases and $52m as part of a regular quarterly cash dividend program.

As of July 4, 2025, Leidos had $930m in cash and cash equivalents and $5.1 bn of debt. On August 1, 2025, the Leidos Board of Directors declared a cash dividend of $0.40 per share. The dividend will be payable on September 30, 2025, to stockholders of record at the close of business on September 15, 2025.

NEW BUSINESS AWARDS

Net bookings totaled $3.9bn in the quarter, representing a book-to-bill ratio of 0.9. As a result, backlog at the end of the quarter was $46.2bn, of which $7.1bn was funded. Included in the quarterly bookings were several notable awards:

  • Significant Classified Awards. Leidos was awarded two large Intelligence Community contracts: a ten-year, $1.3bn take-away and a six-year, $390m recompete. These awards demonstrate Leidos’ capability and commitment in supporting the most critical missions to protect the nation.
  • Air Force Electronic Warfare Mission Support. Leidos was awarded a new $350m indefinite delivery indefinite quantity (IDIQ) subcontract by Huntington Ingalls Industries (HII) to provide electronic warfare engineering and hardware solutions supporting HII and the U.S. Air Force. The IDIQ will support Electronic Warfare-related Task Orders through September 2029, with the first Task Order awarded in May 2025 valued at $186m where Leidos will deliver the first full-scale mission critical solution.
  • Criminal Justice Information Services Fingerprint Analysis Support Team Biometric Services. Leidos was awarded a $128m task order by the Federal Bureau of Investigation to provide agile software development and modernization for the Next Generation Identification system, the bureau’s biometric and criminal history repository. Under the contract, Leidos will enhance the processing, analysis, and automation of fingerprint and biometric data by providing continuous system support; maintain operational readiness; and modernize biometric workflows to improve speed, accuracy, and reliability.
  • North Atlantic Treaty Organization (NATO) IT Modernization. The NATO Communications and Information Agency awarded Leidos a new firm-fixed price, single-award IDIQ contract with a ceiling value of $87m. Leidos will provide a centralized IT solution to support NATO’s operational network, integrating core services such as service management and cybersecurity with the goal of enhancing interoperability and operational efficiency across the NATO command structure. This Leidos-led modernization initiative involving companies from France, Germany, Italy, and the U.K. is designed to improve resilience against cyber threats and increase efficiency and scalability in support of NATO digital transformation.(Source: PR Newswire)

 

05 Aug 25. Amentum Reports Third Quarter Fiscal Year 2025 Results and Raises Full Year Organic Guidance.

Revenues of $3.6bn, 2% growth on a pro forma basis

Net Income of $10m; Adjusted EBITDA of $274m

Diluted Earnings Per Share of $0.04; Adjusted Diluted Earnings Per Share of $0.56

Operating Cash Flow of $106m; Free Cash Flow of $100m

Backlog of $44.6bn; 1.0x YTD Book-to-Bill

Reduced Net Debt to $3.8bn and Net Leverage to 3.5x

Amentum Holdings, Inc. (“Amentum” or the “Company”) (NYSE: AMTM), a leading advanced engineering and technology company, today announced results for the third quarter ended June 27, 2025, and raised its full year organic guidance for fiscal year 2025.

“Amentum’s third quarter performance reflects strong execution and demonstrates the continued strength of our business,” said Amentum Chief Executive Officer John Heller.

Share

“Amentum’s third quarter performance reflects strong execution and demonstrates the continued strength of our business,” said Amentum Chief Executive Officer John Heller. “We’re seeing benefits from our integration efforts and mission-focused portfolio converge with tailwinds from enduring global trends and an improving budget environment. In addition, the successful divestiture of Rapid Solutions combined with our strategic growth initiatives enhance our financial flexibility and provide momentum for future growth as we head into the fourth quarter and beyond. We’re pleased with our performance and excited about our ability to deliver long-term value for customers, employees and shareholders.”

Summary Operating Results

GAAP Results

GAAP revenues increased 66% year-over-year primarily as a result of revenues from the combination with Jacobs’ Critical Mission Solutions and Cyber & Intelligence (CMS) businesses. GAAP operating income increased as a result of the contribution from CMS, partially offset by increased intangible amortization expense. GAAP net income and diluted earnings per share improved year-over-year due to the higher operating income and lower interest expense.

Pro Forma and Non-GAAP Results

Pro forma revenues, which include the results of CMS prepared in accordance with the requirements of Article 11 of Regulation S-X, increased 2% year-over-year driven by growth in Digital Solutions. Pro Forma Adjusted EBITDA increased 7% year-over-year primarily due to the higher revenues and improved operating performance. Pro Forma Adjusted Net Income and Adjusted Diluted Earnings Per Share increased due to higher operating profit partially offset by an increase in interest expense.

Digital Solutions revenues for the third quarter increased 12% year-over-year driven by higher volume from the ramp up of new commercial contract awards. Adjusted EBITDA increased 21% year-over-year due to the higher revenues and improved operational performance.

Global Engineering Solutions revenues for the third quarter decreased 3% year-over-year as a result of the expected ramp-down on certain historical programs, partially offset by new contract awards and growth on existing programs. Adjusted EBITDA decreased 2% year-over-year as a result of the lower revenue volume, partially offset by improved operational performance.

Cash Flow Summary

During the three months ended June 27, 2025, Amentum generated $106m and $275m of net cash from operating and investing activities, respectively, and used $203m in financing activities. Net cash provided by operating activities was driven by strong cash earnings and disciplined working capital management. Net cash provided by investing activities included $360m in proceeds from the sale of Rapid Solutions which were partially offset by a $70m payment for the final net working capital position from the CMS merger. Investing activities also included $6m in capital expenditures which resulted in quarterly free cash flow of $100m. Financing activities consisted primarily of $200 m in principal payments on our Term Loan. As of June 27, 2025, Amentum had $738m in cash and cash equivalents and $4.6 bn of gross debt. Subsequent to the quarter end, Amentum made an additional $250m voluntary principal payment on the Term Loan.

Backlog and Contract Awards

As of June 27, 2025, the Company had total backlog of $44.6bn, compared with $26.9bn as of June 28, 2024, an increase of $17.7bn primarily due to the acquisition of CMS. Funded backlog as of June 27, 2025 was $5.6bn.

Notable Q3 Fiscal Year 2025 Highlights

  • Space Force Range Contract (SFRC) – The United States Space Force awarded Amentum SFRC, a $4bn single-award indefinite delivery indefinite quantity contract with a ten-year ordering period, to advance the national capability for Assured Access To Space from the Eastern and Western Ranges through responsive and flexible operations, maintenance, sustainment, systems engineering and integration solutions. The award is under protest and therefore is not yet included in backlog or book-to-bill.
  • Canadian Nuclear Laboratories (CNL) – The Atomic Energy of Canada Limited awarded the CNL operations and management solutions contract, a CAD $1.2bn annual contract with a six-year base and extension periods up to a total of twenty years, to Nuclear Laboratory Partners of Canada, Inc. As part of the joint venture partnership, Amentum will continue to bring comprehensive nuclear operational solutions, research and development, and technical expertise in Canada.
  • Multiple Intelligence Awards – Amentum secured two new awards totaling over $500m to provide Intelligence customers with a broad range of advanced engineering and technology solutions including mission-critical data modeling and analysis. The awards illustrate the continued strong demand for Amentum’s expertise and innovative intelligence solutions.
  • On-Contract Growth Modifications and Extensions – Amentum benefited from over $2 bn in bookings from contract modifications and extensions from a variety of end-market customers, including the U.S. Air Force, U.S. Navy, and Fortune 500 clients.

Completed Divestitures

On June 26, 2025, Amentum announced it completed the divestiture of a hardware and products business, Rapid Solutions, for $360 m in cash. The business accounted for approximately 1% of Amentum’s annual revenues and Adjusted EBITDA. In addition, during the third quarter Amentum also completed the sale of its non-core New Zealand facilities maintenance business which accounted for approximately $50m in annual revenues. (Source: BUSINESS WIRE)

 

07 Aug 25. CACI posts 12.6% revenue growth in FY25. The company expects FY26 revenue between $9.20bn and $9.40bn and adjusted net income of $605m to $625m. CACI International has recorded $8.63bn in revenue for fiscal year 2025 (FY25), marking a 12.6% growth from the previous year’s $7.66bn. The company attributes this rise to an organic growth rate of 7.2%. It disclosed 16% underlying revenue growth excluding “non-recurring $200m of no-margin material revenue in first half of FY24” and 11.2% earnings before interest, taxes, depreciation, and amortisation (EBITDA) margin. Adjusted earnings per share (EPS) for the fiscal stood at 26% YoY and generated $442m in free cash flow during the period. During the fiscal year ending 30 June 2025, the company’s operational income exhibited a 17.6% increase to reach $764.2m, bolstered by higher revenues and gross profit margins. CACI International’s net income also saw an uptick, rising by 19.0% to $499.8m compared to $419.9m in the prior fiscal year. This surge in EPS was primarily influenced by an enhanced income from operations, a reduced tax provision, and strategic share repurchases, although it was partially counterbalanced by an increase in interest expenses, stated the company. The company’s EBITDA stood at $966.8m in FY25, representing a robust 21.2% increase from the $798.0m reported in FY24. , In the fourth quarter of the fiscal, CACI International’s revenues witnessed a 13.0% year-over-year hike, spurred by 5.3% organic growth. Operational income for the quarter rose by 4.5%, and net income improved significantly by 17.2%, amounting to $157.9m. The company secured contracts worth a total of $2.6bn over the quarter, including a substantial five-year agreement valued at up to $855m with the US Army Intelligence and Security Command (INSCOM). Despite these gains, the total backlog as of 30 June 2025, experienced a slight dip to $31.4bn from $31.6bn the previous year. The funded backlog showed an opposite trend, increasing by 11% to $4.2bn from $3.8bn.

CACI president and chief executive officer John Mengucci said: “In FY25’s uncertain environment, we validated and underscored our differentiation in the industry and delivered double-digit growth, met our margin and cash flow expectations, and won $10bn of contract awards. With more than $31bn of backlog and continued healthy pipeline metrics, CACI remains extremely well positioned to deliver strong financial performance again in FY26, achieve our three-year financial targets, and generate value for our customers and our shareholders.”

In fiscal 2026, CACI International projects its revenue to fall between $9.2bn and $9.4bn and anticipates adjusted net income in the range of $605m to $625m. In July 2025, CACI – Federal secured two contracts from the Canadian Government totalling C$169.19m ($123.61m) for Phase II of the Counter Uncrewed Aircraft System (CUAS) urgent operational requirement (UOR) project. (Source: army-technology.com)

 

06 Aug 25. Leidos raises full-year profit forecast on robust demand for weapons. Defense contractor Leidos Holdings (LDOS.N) raised its full-year adjusted profit forecast on Tuesday, as demand for its technical services and munitions remains robust amid simmering geopolitical tensions. Shares of the company were up 4% in premarket in trading. Make sense of the latest ESG trends affecting companies and governments with the Reuters Sustainable Switch newsletter. Sign up here. Rising tensions around the world in the wake of a protracted Russia-Ukraine war and tensions in the Middle East have boosted the market for arms, benefiting defense contractors. The company has followed peer Northrop Grumman (NOC.N) in lifting its 2025 profit forecast. Leidos now expects its annual adjusted profit at between $11.15 and $11.45 per share, compared with its prior forecast of $10.35 to $10.75. However, the Reston, Virginia-based company trimmed its full-year revenue forecast range and now expects it to be between $17bn and $17.25bn, from $16.9bn and $17.3bn previously. Leidos provides technology services to government agencies as well as commercial clients and is also a maker of drones and aerial defense systems. It also provides services in the areas of health, environmental sciences and transportation. It posted a second-quarter adjusted profit of $3.21 per share. Analysts on average had anticipated a quarterly profit of $2.66 per share, according to data compiled by LSEG.  Its revenue rose about 3% to $4.25 bn, edging past estimates of $4.24bn. (Source: Reuters)

 

05 Aug 25. Palantir claim “phenomenal” Q2 results due to AI leverage. The software supplier accounted for the highest sequential quarterly revenue growth in its history because of its effective use of AI. Palantir, a software systems supplier and US defence contractor, has recorded continual growth in the second quarter of 2025, exceeding $1bn in revenue – a 48% increase over the same period the year before. Co-founder and chief executive, Alex C. Karp, noted the company realised “the highest sequential quarterly revenue growth in our company’s history.” The company closed 157 deals of at least $1m, 66 deals of at least $5m, and 42 deals of at least $10m. Looking ahead, Palantir have raised its revenue guidance to $4.142bn to $4.150bn for 2025. The upward trend comes from Palantir’s use of artificial intelligence (AI). In a letter to shareholders on 4 August 2025, Karp suggested the ascent comes down to “the remarkable confluence of the arrival of language models, the chips necessary to power them, and our software infrastructure, one that allows organizations to tether the power of artificial intelligence to objects and relationships in the real world.”

The launch of the company’s AI platform enables clients to use generative AI models such as GPT-4 on private networks, with applications in the defence sector and beyond. Palantir saw that revenue from contracts with the US government swelled by 14% quarter-over-quarter to $426m. Such work includes the development of the Nuclear Operating System alongside The Nuclear Company, to deploy what is said to be the first AI-driven, real-time software system built exclusively for nuclear construction, enabling critical defence facilities and capabilities. This comes after an executive order was signed in May to leverage private sector investment to innovate existing infrastructure and “fully leverage” nuclear resources across the Departments of Defense and Energy. Other contracts include an enterprise agreement between the US Army, and other Defense agencies, with Palantir to provide the option to purchase the company’s commercial products during over a ten-year period, not to exceed the $10bn cap. In addition, Palantir’s collaboration with BlueForge, a systems integrator, to accelerate the production of US Navy warships using digital means through its Warp Speed manufacturing operating system. The US naval industrial base has been an enduring sore spot in its geopolitical ambitions to check the rising naval capacity in China. Around 70% of Chinese warships were launched after 2010, while only about 25% of the US Navy’s were in the same period, according to the Center for Strategic and International Studies in Washington. Furthermore, the think tank reiterated US Navy estimates that China has 230 times the shipbuilding capacity of the United States.

AI in defence

AI will enable informed decision-making at unparalleled speeds. Defence organisaations must be agile and responsive by design to work effectively and outpace adversaries according to a GlobalData thematic briefing. At a time when the industry is experiencing a global technology skills gap, tools based on AI, low-code platforms, and automation are more relevant than ever. This is is reshaping the US government workforce. On the same day Palantir announced its quarterly financials, the Defense Technical Information Center, the repository for research and development information across the Department of Defense, announced it will reduce the civilian workforce to just 40 people, representing a reduction of 80% civilian workers. (Source: army-technology.com)

 

05 Aug 25. Embraer earnings Result.

HIGHLIGHTS

  • 2025 Guidance reiterated: Commercial Aviation deliveries between 77 and 85 aircraft, and Executive Aviation deliveries between 145 and 155 aircraft. Total company revenues in the US$7.0 to US$7.5bn range, adjusted EBIT margin between 7.5% and 8.3%, and adjusted free cash flow of US$200m or higher for the year. The company highlights 2Q25 results were not materially impacted by U.S. tariffs.
  • Revenues totaled US$1,819m in 2Q25 – all-time high 2nd quarter – +22% year over year (yoy). Highlight for Executive Aviation revenues with +64% yoy growth.
  • Adjusted EBIT reached US$191.8m with a +10.5% margin in 2Q25 (+9.3% in 2Q24).
  • Adjusted free cash flow w/o Eve was US$(161.6)m during the period in preparation for a higher number of aircraft deliveries in the coming quarters.
  • Embraer delivered 61 aircraft in 2Q25, of which 19 were commercial jets (10 E2s and 9 E1s), 38 were executive jets (21 light and 17 medium) while 4 were defense related; +30% versus the 47 aircraft delivered yoy.
  • Firm order backlog of US$29.7 bn in 2Q25 – all-time high. For more information please see our 2Q25 Backlog and Deliveries release.

 

04 Aug 25. UK’s Senior reports 10% rise in profit on civil aerospace and defence demand. British engineering firm Senior (SNR.L) reported a 10% rise in first-half adjusted operating profit on Monday, helped by its aerospace division on robust civil aerospace and defence demand. Rising air travel demand, driven by growing disposable income along with increased defence spending amid heightened geopolitical tensions, has benefited firms like Senior, a key supplier to Boeing (BA.N) and Airbus (AIR.PA). The company reported an adjusted operating profit of 31.2 millon pounds ($265,760.00) for the half-year ended June 30, compared with 28.3 m pounds a year ago. Senior reiterated its expectations for 2025 and said trading had been in line with expectation. ($1 = 0.7526 pounds) (Source: Reuters)

—————————————————————————————————————————————————————————————————————————————————————————————————————————————–

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

——————————————————————————————————————————————————————————————————————————————————————————————————————————————