Key Highlights
- The German defense contractor expects revenue to surge up to 45% in 2026, with targets set between 14-14.5 billion euros
- Record core operating profit of 1.8 billion euros achieved in 2025, representing a 33% year-over-year increase
- Outstanding orders hit an all-time high of 63.8 billion euros in 2025, projected to surge beyond 135 billion euros in 2026
- Strategic pivot underway with automotive business divestiture to concentrate exclusively on defense operations
- Shareholder returns increasing with proposed dividend of 11.50 euros per share for 2025, compared to 8.10 euros previously
The German defense manufacturer delivered unprecedented profitability in 2025 and unveiled an aggressive expansion plan for 2026, projecting revenue growth as high as 45% driven by accelerating European military modernization efforts.
Annual revenue for 2025 reached 9.9 billion euros, marking a nearly 30% increase compared to the previous year. Core operating earnings jumped by one-third to an unprecedented 1.8 billion euros, delivering an operating margin of 18.5%.
Rheinmetall FY 2025 Earnings Recap
💰 Sales: €9.9B
💵 Dividend/Share: €11.50 (beat est. €10.33)
📈 2026 Sales Guidance: €14B–€14.5B (vs. est. €14.96B)
⚙️ 2026 Operating Margin: ~19% (vs. est. 19.1%)
Rheinmetall delivered solid FY25 results with a dividend above…
— Markets Today (@marketsday) March 11, 2026
Looking ahead to 2026, the company headquartered in Düsseldorf projects revenue between 14 billion and 14.5 billion euros. This guidance exceeds the 13.6 billion euro figure that Berenberg analysts noted the company had mentioned during a preliminary call last month — a shortfall that had previously pressured shares.
The company’s backlog of unfilled orders expanded 36% to reach a record 63.8 billion euros by year-end 2025. Management anticipates this figure will more than double to 135 billion euros by the conclusion of 2026, fueled by incoming contracts from Germany, fellow NATO nations, and Ukraine.
CEO Armin Papperger said: “The world is changing rapidly, and Rheinmetall is well prepared. We are needed when it comes to increasing the defence capabilities of Germany and Europe.”
The 2022 Russian invasion of Ukraine initially triggered a widespread European initiative to strengthen military forces that had experienced decades of downsizing. This momentum has intensified following Donald Trump‘s return to office, prompting European leaders to question American security commitments.
Germany has particularly embraced substantial military expansion. Chancellor Friedrich Merz has committed to transforming the Bundeswehr into Europe’s most powerful conventional military force, a strategic objective that directly benefits Rheinmetall’s contract pipeline.
Strategic Realignment: Exiting Automotive, Entering Naval
Rheinmetall has executed two significant organizational changes that underscore a definitive strategic pivot. The company is divesting its civilian automotive operations, departing a challenging sector for German manufacturers, to concentrate exclusively on defense activities.
Simultaneously, the acquisition of German warship manufacturer Naval Vessels Luerssen (NVL) represents its inaugural major entry into maritime defense. The company now spans land, air, space, and naval domains — a comprehensive defense portfolio expansion.
Additionally, a new ammunition manufacturing facility opened in northern Germany last year — Europe’s largest such facility — with capacity to produce up to 350,000 artillery shells annually by 2027. Additional production sites have been established throughout the continent to satisfy surging demand.
Middle East Conflict and American Resupply Opportunities
The defense contractor identified an emerging growth opportunity: the Iranian conflict. Management indicated it is “inevitable” that nations will boost expenditures on missile replenishment and air defense systems resulting from the hostilities, positioning the company favorably to help restock American missile inventories.
For 2026, the company anticipates an operating profit margin approaching 19%, slightly exceeding last year’s 18.5%, even after incorporating integration expenses related to the NVL acquisition.
Industry analysts surveyed by the company forecast Rheinmetall’s revenue will surpass 42 billion euros by 2030 — a projection that would have appeared unrealistic just several years ago.
At its May annual shareholder meeting, Rheinmetall will recommend a dividend distribution of 11.50 euros per share for fiscal 2025, an increase from the prior year’s 8.10 euros.
Despite the robust financial performance, shares declined 5.87% on Wednesday, with RHM trading lower following the earnings announcement.
