Security and Aerospace company Lockheed Martin (NYSE:LMT) reported Q4 CY2025 results beating Wall Street’s revenue expectations, with sales up 9.1% year on year to $20.32 billion. The company’s full-year revenue guidance of $78.75 billion at the midpoint came in 1.2% above analysts’ estimates. Its GAAP profit of $5.80 per share was 0.9% above analysts’ consensus estimates.
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Lockheed Martin (LMT) Q4 CY2025 Highlights:
- Revenue: $20.32 billion vs analyst estimates of $19.84 billion (9.1% year-on-year growth, 2.4% beat)
- EPS (GAAP): $5.80 vs analyst estimates of $5.75 (0.9% beat)
- Adjusted EBITDA: $2.52 billion vs analyst estimates of $2.66 billion (12.4% margin, 5.3% miss)
- EPS (GAAP) guidance for the upcoming financial year 2026 is $29.80 at the midpoint, beating analyst estimates by 1.3%
- Operating Margin: 11.5%, up from 3.7% in the same quarter last year
- Backlog: $193.6 billion at quarter end, up 10% year on year
- Market Capitalization: $142.6 billion
StockStory’s Take
Lockheed Martin’s fourth-quarter results were well received by the market, with leadership attributing the outperformance to strong execution across its core defense programs and a surge in demand for advanced technologies. Management cited record delivery numbers for F-35 fighter jets and PAC-3 interceptors, as well as successful deployments of AI-enabled and space-based systems. CEO James Taiclet highlighted the company’s focus on operational execution and stated, “Our mile-long Fort Worth facility enables an F-35 production rate that is five times faster than any other allied fighter currently in production.”
Looking ahead, Lockheed Martin’s updated guidance is anchored by long-term missile and interceptor framework agreements and planned investments in R&D and production capacity. Management emphasized the acceleration of munitions output and new multiyear contracts as key factors supporting projected growth. CFO Evan Scott noted, “The acceleration of production for these programs provides line of sight to a compound annual growth rate for MFC sales of at least double-digit through the end of the decade.” The company also outlined increased internal investment to advance technology development in areas such as autonomy, hypersonics, and integrated defense systems.
Key Insights from Management’s Remarks
Management pointed to a combination of robust U.S. and allied demand, new long-term agreements, and internal innovation as main contributors to the quarter’s results and evolving outlook.
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Missile production ramp: Lockheed Martin’s Missiles and Fire Control (MFC) segment saw notable growth, driven by production increases for PAC-3 interceptors, JASSM, and HIMARS systems. Management highlighted the new seven-year framework agreement for PAC-3 and similar arrangements for THAAD as transformative, enabling a tripling of PAC-3 output and providing visibility for future investments.
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F-35 program milestones: The Aeronautics segment delivered 191 F-35s in 2025, exceeding internal expectations. Management cited definitive contracts for multiple lots and new sustainment agreements, with additional international deliveries to countries like Belgium and Finland, underscoring the program’s global relevance.
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Strategic investments in R&D: Lockheed Martin announced a step-up in research and development spending, specifically targeting autonomous systems, hypersonic technologies, and AI-enabled platforms. The company is investing over $1 billion in F-35 sustainment and additional funds into programs like the X-59 quiet supersonic aircraft and autonomous Black Hawk helicopters.
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Space and satellite contracts: The Space segment secured key government awards, including the Tranche 3 Tracking Layer Constellation for the Space Development Agency, supporting next-generation missile tracking and national security initiatives.
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Operational cash flow focus: Management emphasized strong free cash flow generation and outlined a dynamic capital allocation strategy, noting that increased investment in production capacity and R&D will be balanced with potential shareholder returns depending on evolving opportunities and long-term agreements.
Drivers of Future Performance
Lockheed Martin expects forward growth to be shaped by continued missile framework agreements, international demand, and rising internal investment in advanced defense technologies.
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Long-term missile agreements: Management expects recently announced seven-year frameworks for PAC-3 and THAAD interceptors to underpin consistent growth, allowing for planned production increases and providing greater visibility on future revenue streams. These agreements are designed to shield the company from procurement volatility through make-whole provisions.
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Technology and capacity investments: The company is increasing capital expenditures and R&D, with a focus on autonomy, AI, and space-based defense systems. Management believes these investments will drive future competitiveness, enable scaling of key programs, and support new product introductions across defense domains.
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Program execution risks: Leadership acknowledged potential margin dilution due to the start-up nature of major production ramps and ongoing complexity in classified programs. Management emphasized proactive risk management and monitoring, especially in classified Aeronautics projects, while noting that sustained performance could lead to margin improvements over time.
Catalysts in Upcoming Quarters
In the coming quarters, our team will be monitoring (1) the pace and execution of missile framework production ramps, (2) meaningful progress in F-35 sustainment improvements and international deliveries, and (3) contract wins and backlog conversion in the Space and advanced technology segments. The effectiveness of increased R&D and capital spending, as well as the company’s ability to manage margin headwinds from major program initiations, will also be important indicators.
Lockheed Martin currently trades at $625.00, up from $597.27 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).
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