Northrop Grumman Corporation
Northrop Grumman is a U.S.-based aerospace and defense company organized around four operating sectors: Aeronautics Systems, Defense Systems, Mission Systems, and Space Systems. Its portfolio includes military aircraft, space systems, missile defense, strategic deterrence systems, advanced weapons, networking and communications, and related technologies for government customers in the United States and abroad.
Fiscal year 2025 · change from previous year
Development 2020–2025
Business
Share of revenueMilitary aircraft, autonomous aircraft solutions, and related aeronautical programs.
Satellites, payloads, launch-related systems, and space mission hardware.
Missile defense, weapons, munitions, and long-range fires capabilities.
Sensors, radar, networking, communications, and electronic mission equipment.
Products
Reported · share of revenue- Products80.4 %
- Services19.6 %
Source: 10-K FY2025, revenue the company reports per product line (SEC XBRL). Shares are of the lines shown and add up to 100 %.
Customers
Northrop Grumman sells primarily to the U.S. government, especially the Department of War/Defense and the intelligence community, while also serving selected international government customers. Its programs are typically awarded through long-cycle procurement contracts where customers buy mission-critical systems, sustainment, and development work tied to national security requirements.
Buys aircraft, missile defense, space, and mission systems for national security programs.
Buys space systems, sensors, and secure networking solutions for intelligence missions.
Buys platforms and subsystems for air, missile, naval, and strategic deterrence programs.
Buy selected defense and aerospace products and services under export and security rules.
Strategy
The company focuses on winning long-cycle defense and space programs that align with national security priorities and support durable technology positions. It emphasizes advanced technologies such as microelectronics, cyber, and advanced computing, while also investing in program execution, affordability, and digital transformation to strengthen competitiveness on future awards.
Large programs drive backlog, scale, and long-term customer relationships.
Higher-content technology improves differentiation in future procurements.
Defense customers reward reliable execution on complex, fixed-scope programs.
Geography
Northrop Grumman is headquartered in the United States and conducts most of its business with U.S. government customers, with additional sales to international customers. Its operating footprint is shaped by defense procurement, export controls, and the location of major engineering, manufacturing, and test facilities supporting aircraft, space, and missile programs.
Risks
Northrop Grumman is exposed to heavy customer concentration, since the U.S. government accounts for most sales and procurement priorities can shift. Its long-term contracts also rely on estimates for costs, incentives, and claims, so program overruns, supply-chain disruptions, cyber threats, and bid protests can materially affect results.
- Customer concentrationImpact: HighLikelihood: Medium
A large share of sales comes from the U.S. government, so budget or priority changes can affect demand.
Exposure: U.S. government
- Contract estimate riskImpact: HighLikelihood: Medium
Revenue and profit depend on management estimates for long-term program costs and variable consideration.
Exposure: Cost-to-cost contracts
- Supply-chain disruptionImpact: HighLikelihood: Medium
Programs depend on approved suppliers and scarce components such as microelectronics.
Exposure: Microelectronics and sole-source parts
- Cyber and security threatsImpact: HighLikelihood: Medium
Defense and intelligence work requires secure systems and sensitive data handling.
Exposure - Competition and bid protestsImpact: MediumLikelihood: Medium
Defense contracts are awarded through competitive procurement and awards can be challenged.
Exposure: Major U.S. programs
Accounting
Judgemental itemsRevenue is recognized as work progresses, so estimate changes can shift timing and margins.
Impact: Affects sales, operating income, and backlog conversion
Award fees, incentive fees, and claims are included only when probable and estimable.
Impact: Can increase or reduce recognized revenue
Unfavorable estimate revisions on major programs can require immediate charges.
Impact: Can materially reduce operating income in a period
Discount rates and expected returns affect benefit expense and liabilities.
Impact: Influences earnings and balance sheet obligations
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Last updated: 24/09/2026