BAE Systems FY2025 Results Show Strong Profit and Backlog
BAE Systems FY2025 Results show rising profit, record order backlog, higher dividend as management raised guidance, likely boosting defense flows.
KEY TAKEAWAYS
- Underlying EBIT rose 12.0% to £3.32 billion, with sales up 10.0% on a constant-currency basis.
- Record order backlog reached £83.6 billion with a 1.2 book-to-bill, supporting multi-year revenue visibility.
- Management raised FY2026 targets for sales, underlying EBIT and EPS, citing elevated defense budgets.
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BAE Systems reported FY2025 results in a press release on Feb. 18, 2026, showing rising profit, sales, and a larger dividend. Management raised FY2026 targets, citing escalating security challenges that are driving higher defense budgets.
Profit, Sales, and Guidance
For the year ended Dec. 31, 2025, BAE Systems’ underlying EBIT rose 12.0% to £3.32 billion, while sales on a constant-currency basis increased 10.0% to £30.7 billion. Underlying earnings per share (EPS) grew 12.0% to 75.2 pence. Free cash flow declined 14.0% to £2.16 billion, as late customer advances were offset by higher capital expenditures and increased research and development spending.
The company guided FY2026 sales growth of 7.0% to 9.0%, underlying EBIT growth of 9.0% to 11.0%, and underlying EPS growth of 9.0% to 11.0%. This outlook assumes a $1.32 per £1 exchange rate, with a sensitivity of about £500 million in sales and £70 million in underlying EBIT for each 10-cent move in the dollar. Management said the guidance reflects a heightened defense environment and elevated budgets across Europe and the United States.
Record Backlog and Shareholder Returns
Order intake for FY2025 reached £36.8 billion, up 9.0%, pushing the company’s order backlog to a record £83.6 billion and yielding a book-to-bill ratio of 1.2. Notable bookings included a £4.6 billion order from Turkey for 20 Eurofighter Typhoon jets.
BAE Systems raised its total dividend 10.0% to 36.3 pence, recommending a final dividend of 22.8 pence. The company repurchased 30 million shares at a cost of £502 million, with dividends and buybacks totaling £1.53 billion in shareholder returns. Net debt excluding lease liabilities fell 22.0% to £3.84 billion.
By segment, Electronic Systems generated £7.5 billion in sales with underlying EBIT of £1.16 billion. Platforms & Services sales rose 17.0% to £5.0 billion, and underlying EBIT climbed 30.0% to £576 million. Air sales were £9.3 billion, and Cyber & Intelligence sales reached £2.4 billion. Maritime sales increased 11.0% to £6.8 billion, though underlying EBIT fell 3.0% to £457 million due to early-stage program maturity and capacity investments.
The combination of strong guidance and a record backlog points to a surge in defense spending that underpins multi-year revenue visibility for BAE Systems.
