Northrop Grumman Corp (NYSE: NOC) is a defense and aerospace company that designs, develops, and produces complex weapon systems, aircraft, and technology solutions primarily for the U.S. government. Revenue is generated through long-term contracts, roughly half fixed-price and half cost-type as of FY2025, with performance obligations transferred to customers over time on programs spanning development, production, and sustainment. The company reported $41.95 billion in sales for FY2025, up 2 percent from $41.03 billion in FY2024, with an operating margin of 10.8 percent. Key programs include the B-21 Raider stealth bomber, where Northrop Grumman holds the prime contract awarded by the U.S. Air Force in 2015, covering an engineering and manufacturing development phase and five low-rate initial production options for a baseline of 21 aircraft. The company operates across segments including Aeronautics Systems, which saw a significant B-21 loss provision in Q1 FY2025. CEO Kathy J. Warden leads the company, with CFO John T. Greene also named in the FY2025 10-K filed January 27, 2026.

Revenue model

Long-term contract revenue recognized as control transfers to the customer, primarily the U.S. government. Approximately half of FY2025 sales derived from fixed-price contracts and half from cost-type contracts. Programs span development (often cost-type) and production (often fixed-price). The company also earns contract incentives on certain programs, such as performance-based incentives tied to the Sentinel program restructure.

Products and services

B-21 Raider stealth bomber (prime contractor for U.S. Air Force, EMD phase plus LRIP options for up to 40 aircraft with NTE pricing established); Sentinel intercontinental ballistic missile program (EMD restructure underway with U.S. Air Force as of FY2025); Aeronautics Systems segment products; space and mission systems. Training services divested during FY2025 generating a $231 million pre-tax gain.

Customers and end markets

Primary customer is the U.S. government, principally the U.S. Air Force and other Department of Defense agencies. International customers are also served, with contracts sometimes requiring local hiring, investment, manufacturing, or offset obligations. Customer contracts often include termination-for-convenience provisions. Purchase obligations at December 31, 2025 totaled $23.9 billion, largely comprised of open purchase orders under U.S. government contracts.

Value-chain role

Prime contractor and system integrator on major defense platforms, responsible for engineering, manufacturing development, and production. Relies on suppliers and subcontractors; some programs depend on sole-source suppliers. Partners with non-U.S. companies through joint ventures and other arrangements for international programs. Holds intellectual property tied to defense platforms and systems.

Geographic exposure

Primarily U.S. government contracts. International business also conducted across multiple countries, subject to U.S. export authorization requirements and local regulatory compliance. International contracts carry additional risks including offset obligations, letters of credit, performance bonds, and exposure to changes in foreign laws and political environments.

Source: SEC 10-K, filed 2026-01-27

Industry: Search, Detection, Navigation, Guidance, Aeronautical Sys Peers: Howmet Aerospace Inc Boeing Co General Dynamics Corp L3Harris Technologies Inc HEICO Corp Lockheed Martin Corp RTX Corp TransDigm Group Inc Textron Inc