Thales (HO) Q4 2025 earnings summary

Executive summary

• Achieved or exceeded all 2025 financial targets, with record order intake of €25.3 billion, robust sales and profitability growth, and outstanding free operating cash flow generation.

• Major strategic progress, including a MoU with Airbus and Leonardo to create a leading European space player, and technological breakthroughs in AI and quantum.

• SAMP/T NG air defense system disrupted the market, validated by Denmark's selection, and is expected to drive further export success.

• AI leadership expanded globally, with cortAIx embedded in over 100 products and 250+ use cases, and strategic partnerships with Dassault Aviation and Naval Group.

• Strategic ramp-up in production capacity and R&D, with continued implementation of the strategic roadmap and CSR policy.

Financial highlights

• Order intake reached €25.3 billion, maintaining a book-to-bill ratio of 1.14, with organic order growth of 1%.

• Sales grew 8.8% organically to €22.1 billion, with reported growth at 7.6% year-over-year.

• Adjusted EBIT rose 13.3% to €2.74 billion, with margin improving to 12.4%.

• Adjusted Net Income group share increased by 5.5% to €2.005 billion; Adjusted EPS at €9.76.

• Free operating cash flow up 27% to €2.577 billion, with a conversion ratio of 128%.

• Proposed dividend of €3.90 per share, up 5.5%, maintaining a 40% payout ratio.

Outlook and guidance

• 2026 guidance: organic sales growth of 6%-7% (€23.3–€23.6 billion), Adjusted EBIT margin of 12.6%-12.8%, and free operating cash flow conversion ratio of 95%-100%.

• Confident in reaching the high end of 2024-2028 targets: organic sales growth, 13%-14% operating margin, and strong cash flow.

• Defence and Aerospace expected to drive growth, with Cyber & Digital returning to growth post-Imperva integration.

• Outlook assumes no major macroeconomic or geopolitical disruptions.