Northrop Grumman Reports $9.468 Billion Revenue in Q1 2025, Down 7% Year-Over-Year

Northrop Grumman Corporation reported a total revenue of $9.468 billion for the first quarter of 2025, a decrease of 7% compared to $10.133 billion in the same period of the previous year. The decline was primarily attributed to lower sales in the Space Systems segment, which experienced a wind-down of certain programs, and reduced sales in the Aeronautics Systems segment. Operating income fell to $573 million, down 46% from $1.071 billion in the prior year, largely due to a $477 million loss provision related to the B-21 program. The company's net earnings also decreased significantly, totaling $481 million, a 49% drop from $944 million in the first quarter of 2024.

In terms of operational changes, Northrop Grumman underwent significant organizational realignments, moving the Strategic Deterrent Systems division from Space Systems to Defense Systems in July 2024, and the Strike and Surveillance Aircraft Solutions business unit from Defense Systems to Aeronautics Systems in January 2025. These changes are reflected in the financial results and are part of the company's strategy to enhance operational efficiency and align resources with market demands. The company also announced a definitive agreement to sell its Immersive Mission Solutions operating unit for $327 million, expected to close mid-2025, which is anticipated to yield an after-tax gain of approximately $150 million.

The company’s backlog as of March 31, 2025, stood at $92.8 billion, an increase from $91.5 billion at the end of 2024. This backlog includes both funded and unfunded orders, with approximately 40% expected to be recognized as revenue over the next 12 months. Northrop Grumman reported a net cash used in operating activities of $1.565 billion for the quarter, a significant increase from $706 million in the same period last year, primarily due to changes in trade working capital and increased vendor payments.

Looking ahead, Northrop Grumman remains focused on addressing the challenges posed by the current global security environment, which has heightened demand for defense products and services. The company is actively evaluating opportunities and risks associated with ongoing geopolitical tensions, particularly in regions such as Ukraine and the Pacific. Despite the recent financial setbacks, Northrop Grumman's leadership believes that its capabilities in advanced technologies and defense systems position it well for future growth, contingent on navigating the complexities of the defense market and maintaining strong relationships with government clients.