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XBRL · SEC EDGAR2007–2025(19yr)| Metric | FY 2007 | FY 2008 | FY 2009 | FY 2010 | FY 2011 | FY 2012 | FY 2013 | FY 2014 | FY 2015 | FY 2016 | FY 2017 | FY 2018 | FY 2019 | FY 2020 | FY 2021 | FY 2022 | FY 2023 | FY 2024 | FY 2025Latest | YoY |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $41.9B | $42.7B | $45.2B | $45.8B | $46.5B | $47.2B | $45.4B | $45.6B | $46.1B | $47.3B | $50.0B | $53.8B | $59.8B | $65.4B | $67.0B | $66.0B | $67.6B | $71.0B | $75.0B | +5.6% |
| Gross Profit | $4.2B | $4.6B | $4.2B | $3.8B | $3.7B | $4.2B | $4.2B | $5.3B | $5.2B | $5.1B | $5.5B | $7.3B | $8.4B | $8.7B | $9.1B | $8.3B | $8.5B | $6.9B | $7.6B | +9.9% |
| Gross Margin | 10.1% | 10.9% | 9.3% | 8.4% | 8.0% | 8.9% | 9.2% | 11.5% | 11.3% | 10.7% | 11.1% | 13.5% | 14.0% | 13.2% | 13.5% | 12.6% | 12.5% | 9.8% | 10.2% | +0.4pp |
| Operating Income | $4.5B | $5.1B | $4.5B | $4.1B | $4.0B | $4.4B | $4.5B | $5.6B | $5.4B | $5.5B | $5.9B | $7.3B | $8.5B | $8.6B | $9.1B | $8.3B | $8.5B | $7.0B | $7.7B | +10.2% |
| Operating Margin | 10.8% | 12.0% | 9.9% | 8.9% | 8.6% | 9.4% | 9.9% | 12.3% | 11.8% | 11.7% | 11.9% | 13.6% | 14.3% | 13.2% | 13.6% | 12.7% | 12.6% | 9.9% | 10.3% | +0.4pp |
| Net Income | $3.0B | $3.2B | $3.0B | $2.9B | $2.7B | $2.7B | $3.0B | $3.6B | $3.6B | $5.3B | $2.0B | $5.0B | $6.2B | $6.8B | $6.3B | $5.7B | $6.9B | $5.3B | $5.0B | -6.0% |
| Net Margin | 7.2% | 7.5% | 6.7% | 6.4% | 5.7% | 5.8% | 6.6% | 7.9% | 7.8% | 11.2% | 4.0% | 9.4% | 10.4% | 10.4% | 9.4% | 8.7% | 10.2% | 7.5% | 6.7% | -0.8pp |
| Free Cash Flow | $3.3B | $3.5B | $2.3B | $2.5B | $3.3B | $619.0M | $3.7B | $3.0B | $4.2B | $4.1B | $5.3B | $1.9B | $5.8B | $6.4B | $7.7B | $6.1B | $6.2B | $5.3B | $6.9B | +30.7% |
| FCF Margin | 7.9% | 8.2% | 5.1% | 5.4% | 7.0% | 1.3% | 8.2% | 6.6% | 9.0% | 8.7% | 10.6% | 3.5% | 9.7% | 9.8% | 11.5% | 9.3% | 9.2% | 7.4% | 9.2% | +1.8pp |
| EPS (Diluted) | $7.10 | $7.86 | $7.78 | $7.94 | $7.81 | $8.36 | $9.13 | $11.21 | $11.46 | $17.49 | $6.89 | $17.59 | $21.95 | $24.30 | $22.76 | $21.66 | $27.55 | $22.31 | $21.49 | -3.7% |
1. THE BIG PICTURE
Lockheed Martin is currently defined by a massive disconnect between its record-high $194 billion backlog and the structural constraints of its business model. While global demand for its "overmatch" capabilities is surging, Lockheed Martin is essentially a captive of the U.S. federal budget, which accounts for 72% of its sales (10-K Item 1). Its future is inextricably tied to the F-35 Lightning II; the program is both its greatest competitive moat and its most significant financial vulnerability.
2. WHERE THE RISKS HIT HARDEST
Lockheed Martin’s stated competitive advantage in "Technical Excellence and Innovation" is directly threatened by its Fixed-Price Contract Exposure. As Lockheed Martin pushes into next-generation technologies like artificial intelligence and hypersonic missiles, it bears the full burden of cost overruns on firm fixed-price contracts (10-K Item 1A). If actual development costs exceed estimates, the very innovation that management touts as a differentiator will trigger "reach-forward losses," directly suppressing the bottom line.
Furthermore, Lockheed Martin's "Portfolio Breadth" is undermined by Supply Chain Fragility. Management’s goal of delivering integrated solutions "at scale" is currently at the mercy of industry-wide shortages in rare earth minerals and magnets. These disruptions have already resulted in pricing escalations and extended lead times, creating a bottleneck that prevents Lockheed Martin from fully converting its record backlog into immediate revenue (8-K).
3. WHAT THE NUMBERS SAY TOGETHER
While Lockheed Martin’s revenue growth of 5.6% is modest compared to some peers, Lockheed Martin is an elite cash generator. It maintains an 8.7% Free Cash Flow (FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders) margin, ranking 2nd among its primary competitors (XBRL). This cash efficiency allows Lockheed Martin to return capital aggressively, yielding 2.0% via dividends and another 2.0% through buybacks—a shareholder return profile that leads most of its peer group.
The fourth quarter of 2025 showed a significant acceleration, with sales hitting $20.3 billion compared to $18.6 billion a year prior (8-K). This jump suggests that the "unprecedented demand" cited by CEO Jim Taiclet is beginning to outpace Lockheed Martin's long-term average growth. However, investors should note that Lockheed Martin’s gross margin of 10.3% is near the bottom of its peer group, trailing Honeywell (34.3%) and Northrop Grumman (19.8%). This is not necessarily a sign of weakness, but rather a reflection of a business mix dominated by high-volume, lower-margin hardware production for the Department of War.
4. IS IT WORTH IT AT THIS PRICE?
At 20.5x Forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations, Lockheed Martin trades at a modest discount to the peer median of 24.5x. According to CAPM analysis, the market is currently pricing in a long-term growth rate of just 0.7%. This valuation appears attractively valued when weighed against Lockheed Martin’s own 2026 guidance of 5% sales growth and a record $194 billion backlog that provides years of revenue visibility.
The discount to peers is likely justified by the "F-35 Program Concentration," which accounts for 27% of total sales. Investors are demanding a risk premium because any schedule delay or funding cut to this single aircraft program would materially damage Lockheed Martin's financial health. However, for investors who believe the U.S. government will continue to prioritize "deterrence" and "overmatch," the current price offers a entry point that ignores the 2.8% implied EPSEPSEarnings Per Share — the company's net profit divided by its share count; the most common per-share profitability metric growth supported by Lockheed Martin's aggressive share retirement program.
5. WHAT WOULD CHANGE THIS VIEW?
- Cautious if FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders falls below the $6.5 billion guidance floor, signaling that "unilateral definitization" of contracts by the government is forcing Lockheed Martin to perform under unprofitable terms.
- Constructive if international sales (currently 28%) increase as a percentage of the total mix, which would diversify the revenue base away from the 72% U.S. government dependency.
6. BOTTOM LINE
Structural Advantage: Massive scale and deep integration into the U.S. defense architecture, anchored by the F-35 platform and a record $194 billion backlog.
Bottom Line: Lockheed Martin is a high-visibility cash-flow machine that the market is pricing for near-stagnation, offering a compelling opportunity for investors to capitalize on a low-growth valuation in a high-demand environment.
1. Top 5 Material Risks
- U.S. Government Dependency: Lockheed Martin derived 72% of its 2025 total consolidated sales from the U.S. Government, including 63% from the Department of War. Budget uncertainty, continuing resolutions, or government shutdowns threaten the timing and quantum of funding for programs.
- F-35 Program Concentration: As Lockheed Martin’s largest program, the F-35 represented 27% of 2025 total consolidated sales. Risks include supplier performance, software development, and potential cost pressures that could lead to contract delays or funding cuts.
- Fixed-Price Contract Exposure: Lockheed Martin bears the burden of cost overruns on firm fixed-price contracts. If actual costs exceed estimates, margins are reduced and Lockheed Martin may be forced to record a reach-forward loss.
- Supply Chain and Subcontractor Performance: Lockheed Martin relies on a multi-tiered supply chain for materials and components. Failures by subcontractors or joint venture partners to meet specifications or affordability targets can lead to contract terminations for default or increased costs.
- Regulatory and Procurement Policy Changes: The U.S. Government is shifting toward multi-year procurements and "other transaction authority" (OTA) agreements. Changes in allowable costs or the imposition of new contract terms—such as those limiting dividends or executive compensation—can adversely affect profitability.
2. Company-Specific Risks
- Pension Volatility: Lockheed Martin maintains defined benefit pension plans where the expense or income recorded is sensitive to interest rates and returns on plan assets. Differences between U.S. GAAPGAAPGenerally Accepted Accounting Principles — the standard U.S. accounting rules all public companies must follow (FAS) and Cost Accounting Standards (CAS) can result in significant period adjustments.
- Goodwill Impairment: Lockheed Martin holds $11.3 billion in goodwill assets, representing approximately 19% of total assets as of December 31, 2025. Negative changes in the expected cash flows of a reporting unit could trigger a write-off of these assets.
- International Offset Obligations: International sales (28% of total sales in 2025) often require industrial participation or "offset" agreements. Failure to meet these commitments—which may involve technology transfers or local manufacturing support—can result in significant penalties and reduced sales.
- Classified Contract Limitations: A portion of Lockheed Martin's contracts are classified, which limits the ability to disclose specific risks, disputes, or claims, and prevents the use of commercial insurance for government property under certain fixed-price development contracts.
3. Regulatory/Legal Risks
- Government Audits: The Defense Contract Audit Agency and other bodies routinely audit contract pricing and cost structures. These audits can result in the reduction of contract prices, repayment demands, or the withholding of payments.
- Environmental Remediation: Lockheed Martin is a party to various remediation obligations for hazardous materials at current and former facilities. These liabilities can increase due to stricter standards or the discovery of previously unknown contamination.
- Export Controls and Sanctions: International business is subject to U.S. export regulations and foreign policy. Sanctions, such as those imposed on Türkish entities, have previously affected Lockheed Martin's ability to obtain export permits for programs like the Türkish Utility Helicopter Program.
- Bid Protests: Unsuccessful bidders may challenge contract awards, leading to significant legal expenses, contract modifications, or the loss of awards, which delays the recognition of sales and underlying cash flows.
4. Financial Impact Map
U.S. Government Dependency → Total Consolidated Sales → 72% of total sales derived from U.S. Government contracts in 2025. F-35 Program Concentration → Total Consolidated Sales → 27% of total sales derived from the F-35 program in 2025. Fixed-Price Contract Exposure → Operating Profit/Margins → Reach-forward losses recorded when estimated costs to complete exceed the transaction price. Pension Funding Requirements → Free Cash Flow → Differences between cash contributions under ERISA/CAS and pension expense under FAS can affect the timing of cash flows. Goodwill Impairment → Total Assets → $11.3 billion in goodwill recorded as of December 31, 2025, subject to impairment testing.
Recent Filings
| Form | Filed | Period |
|---|---|---|
| 8-K | Jan 2026 | — |
| 10-K | Jan 2026 | Dec 2025 |
| 10-Q | Oct 2025 | Sep 2025 |
| 14A | Mar 2025 | — |
AI-extracted key facts from press releases and SEC filings. Significance 1–10.
Lockheed Martin Q4 revenue $20.32B, +9.1% YoY, beats estimates by 2.4%
- ▸Q4 revenue $20.32B, +9.1% YoY, beating estimates by 2.4%
- ▸Record $194B backlog reported for 2025
- ▸Free cash flow exceeded prior company expectations
- ▸Leonardo DRS Q4 revenue $1.06B, +8.1% YoY, beating estimates by 7%
- ▸Defense sector Q4 revenue beat consensus estimates by 2.1%
Rocket Lab 2025 Revenue $601.8M +38% YoY, Backlog Hits $1.85B
- ▸2025 total revenue $601.8M, up 38% from $436.2M in 2024
- ▸Year-end backlog $1.85B, with 37% expected to convert within 12 months
- ▸Space Systems revenue $402.8M, Launch Services revenue $199.0M
- ▸Q4 2025 launch revenue $75.9M, up 85% sequentially on seven missions
- ▸Average revenue per launch increased to $8.5M from $7.8M in 2024
Arcline Investment Management drops buyout bid for UK aerospace supplier Senior Plc
- ▸Arcline Investment Management terminated takeover talks with Senior Plc
- ▸Arcline barred from making new offer for six months under UK rules
- ▸Senior previously rejected £1.14B takeover proposal from Advent in March
- ▸Ongoing buyout negotiations continue with Advent and Tinicum-Blackstone consortium
- ▸Senior derives 16% of total revenue from defense sector contracts
CVU Q4 revenue $19.4M, FY25 net loss $0.8M amid A-10 program termination
- ▸Q4 revenue $19.4M vs $21.8M YoY
- ▸Q4 EPS $0.05 vs $0.08 YoY
- ▸FY25 net loss $0.8M vs $3.3M profit in 2024
- ▸FY25 revenue $69.3M vs $81.1M prior year
- ▸Year-end backlog $505M
Lockheed Martin Opens Rapid Fielding Center to Accelerate Defense Prototype Production and Delivery
- ▸Opened Rapid Fielding Center to streamline prototype development and testing
- ▸Reduces development timelines from years to months for mission-critical systems
- ▸Modular facility design allows rapid reconfiguration for evolving program needs
- ▸Invested over $7 billion in capacity expansion since 2017
- ▸Planning multibillion-dollar investment over next three years across 20+ facilities
Lockheed Martin to quadruple Precision Strike Missile production capacity under new defense framework
- ▸Precision Strike Missile production capacity to potentially quadruple
- ▸PAC-3 production tripling to 2,000 rounds annually
- ▸Historic multi-year agreements secured for PAC-3 MSE and THAAD interceptors
- ▸Revenue visibility extended through early 2030s
- ▸Stock trading at 8.39% intrinsic discount with $866.67 fair value estimate
Lockheed Martin to quadruple Precision Strike Missile production capacity under new Army framework
- ▸Framework agreement with Department of War to accelerate PrSM production
- ▸Plan aims to quadruple PrSM manufacturing capacity
- ▸Potential multi-year deal spanning up to seven years pending congressional approval
- ▸Company invested over $2 billion in munitions production since 2017
- ▸Sikorsky successfully tested UH-60MX Black Hawk with MATRIX autonomy suite
Lockheed Martin backlog hits record $194B; production capacity for interceptors set to triple
- ▸Record $194B backlog, representing 2.5x annual revenue
- ▸THAAD interceptor production increasing 317% to 400 units annually
- ▸PAC-3 MSE interceptor production increasing 233% to 2,000 units annually
- ▸150 THAAD interceptors expended in first 12 days of Iran conflict
- ▸Pentagon $200B supplemental request additive to authorized FY2026 defense budget
Lockheed Martin to quadruple Precision Strike Missile production capacity under new DoW agreement
- ▸Agreement with Department of War to quadruple PrSM production capacity
- ▸Builds on previous $4.94 billion U.S. Army contract award
- ▸Includes potential for seven-year multi-year contract pending Congressional authorization
- ▸PrSM successfully debuted in combat during Operation Epic Fury on March 4
- ▸Company invested $2 billion specifically to accelerate munitions production capacity
Lockheed Martin to quadruple Precision Strike Missile production capacity under new DoW agreement
- ▸Quadrupling production capacity for Precision Strike Missiles (PrSM)
- ▸Builds upon previous $4.94 billion U.S. Army contract
- ▸Framework agreement allows for potential seven-year multi-year contract
- ▸Company invested $2 billion specifically to accelerate munitions production
- ▸PrSM successfully debuted in combat during Operation Epic Fury on March 4