HII Reports Third Quarter 2025 Results (Form 8-K)

HII Reports Third Quarter 2025 Results

NEWPORT NEWS, Va. (October 30, 2025) - HII (NYSE: HII) today reported results for the third quarter of fiscal 2025.

Highlights

•Third quarter revenues were a record $3.2 billion

•Third quarter net earnings were $145 million or $3.68 diluted earnings per share

•Completed builder's sea trials for guided missile destroyer Ted Stevens (DDG 128)

•Completed initial sea trials of Virginia-Class Submarine Massachusetts (SSN 798) in early October

Third Quarter Results

Third quarter 2025 revenues of $3.2 billion were up 16.1% from the third quarter of 2024, driven by growth at Newport News Shipbuilding, Ingalls Shipbuilding and Mission Technologies.

Operating income in the third quarter of 2025 was $161 million and operating margin was 5.0%, compared to $82 million and 3.0%, respectively, in the third quarter of 2024.

Segment operating income1 in the third quarter of 2025 was $179 million and segment operating margin1 was 5.6%, compared to $97 million and 3.5%, respectively, in the third quarter of 2024. The increases were driven primarily by more favorable segment results at Newport News Shipbuilding and Ingalls Shipbuilding compared to the prior year period.

Net earnings in the quarter were $145 million, compared to $101 million in the third quarter of 2024. Diluted earnings per share in the quarter was $3.68, compared to $2.56 in the third quarter of 2024.

Net cash provided by operating activities in the quarter was $118 million and free cash flow1 was $16 million, compared to net cash provided by operating activities of $213 million and free cash flow1 of $136 million in the third quarter of 2024.

New contract awards in the third quarter of 2025 were $2.0 billion, bringing total backlog to $55.7 billion as of September 30, 2025.

"We made steady progress on our 2025 operational initiatives in the third quarter," said Chris Kastner, HII's president and CEO. "We have continued to see early signs that targeted investments are helping to strengthen our workforce and build a more robust maritime supply chain in support of higher shipbuilding throughput."

1Non-GAAP measures. See Exhibit B for definitions and reconciliations.

Results of Operations

						Three Months Ended																								Nine Months Ended
						September 30																								September 30
($ in millions, except per share amounts)						2025						2024						$ Change						% Change						2025						2024						$ Change						% Change
Sales and service revenues						$	3,192					$	2,749					$	443					16.1		%				$	9,008					$	8,531					$	477					5.6		%
Operating income						161						82						79						96.3		%				485						425						60						14.1		%
Operating margin %						5.0		%				3.0		%										206 bps						5.4		%				5.0		%										40 bps
Segment operating income1						179						97						82						84.5		%				522						470						52						11.1		%
Segment operating margin %1						5.6		%				3.5		%										208 bps						5.8		%				5.5		%										29 bps
Net earnings						145						101						44						43.6		%				446						427						19						4.4		%
Diluted earnings per share						$	3.68					$	2.56					$	1.12					43.8		%				$	11.35					$	10.81					$	0.54					5.0		%
1 Non-GAAP measures that exclude non-segment factors affecting operating income. See Exhibit B for definitions and reconciliations.

Segment Operating Results

Ingalls Shipbuilding

						Three Months Ended																								Nine Months Ended
						September 30																								September 30
($ in millions)						2025						2024						$ Change						% Change						2025						2024						$ Change						% Change
Revenues						$	828					$	664					$	164					24.7		%				$	2,189					$	2,031					$	158					7.8		%
Segment operating income						65						49						16						32.7		%				165						165						-						-		%
Segment operating margin %						7.9		%				7.4		%										47 bps						7.5		%				8.1		%										(59) bps

Ingalls Shipbuilding revenues for the third quarter of 2025 were $828 million, an increase of $164 million, or 24.7%, from the same period in 2024, primarily driven by higher volumes in surface combatants.

Ingalls Shipbuilding segment operating income for the third quarter of 2025 was $65 million, an increase of $16 million from the same period in 2024. Segment operating margin in the third quarter of 2025 was 7.9%, compared to 7.4% in the same period last year. The increases were primarily driven by higher volumes in surface combatants.

Key Ingalls Shipbuilding milestone for the quarter:

•Completed builder's sea trials for guided missile destroyer Ted Stevens (DDG 128)

Newport News Shipbuilding

						Three Months Ended																								Nine Months Ended
						September 30																								September 30
($ in millions)						2025						2024						$ Change						% Change						2025						2024						$ Change						% Change
Revenues						$	1,617					$	1,412					$	205					14.5		%				$	4,616					$	4,381					$	235					5.4		%
Segment operating income						80						15						65						433.3		%				247						208						39						18.8		%
Segment operating margin %						4.9		%				1.1		%										389 bps						5.4		%				4.7		%										60 bps

Newport News Shipbuilding revenues for the third quarter of 2025 were $1.6 billion, an increase of $205 million, or 14.5%, from the same period in 2024. The increase was primarily driven by higher volumes in submarines and aircraft carriers.

Newport News Shipbuilding segment operating income for the third quarter of 2025 was $80 million, an increase of $65 million from the same period in 2024. Segment operating margin in the third quarter of 2025 was 4.9% compared to 1.1% in the same period last year. The increases were primarily driven by unfavorable cumulative catch-up adjustments in the Virginia-class submarine program and aircraft carriers in 2024.

Key Newport News Shipbuilding milestones for the quarter:

•Completed initial sea trials of Virginia-Class Submarine Massachusetts (SSN 798) in early October

Mission Technologies

						Three Months Ended																								Nine Months Ended
						September 30																								September 30
($ in millions)						2025						2024						$ Change						% Change						2025						2024						$ Change						% Change
Revenues						$	787					$	709					$	78					11.0		%				$	2,313					$	2,224					$	89					4.0		%
Segment operating income						34						33						1						3.0		%				110						97						13						13.4		%
Segment operating margin %						4.3		%				4.7		%										(33) bps						4.8		%				4.4		%										39 bps

Mission Technologies revenues for the third quarter of 2025 were $787 million, an increase of $78 million, or
11.0%, from the same period in 2024. The increases were primarily due to higher volumes in C5ISR; cyber, electronic warfare & space; and live, virtual, and constructive training solutions.

Mission Technologies segment operating income for the third quarter of 2025 was $34 million, an increase of $1 million from the same period in 2024. Segment operating margin in the third quarter of 2025 was 4.3%, compared to 4.7% in the same period last year. Segment operating income was relatively unchanged as changes in contract mix offset the higher volumes described above.

Mission Technologies results included approximately $22 million of amortization of purchased intangible assets in the third quarter of 2025, compared to approximately $25 million in the same period last year.

Mission Technologies EBITDA margin1 in the third quarter of 2025 was 7.8%, compared to 8.9% in the third quarter of 2024.

Key Mission Technologies milestones for the quarter:

•Achieved third quarter 2025 book-to-bill of 1.25x

•Unveiled AI-enabled ROMULUS family of unmanned surface vessels powered by HII's Odyssey Autonomous Control System (ACS) software suite

•Announced the completion of production of the 750th REMUS unmanned undersea vehicle (UUV),
the REMUS 300, produced at the HII unmanned facility in Pocasset, Massachusetts, which will be delivered to the German navy

•Announced partnership with Shield AI to advance modular, cross-domain mission autonomy

•Announced investment in new integration and test facility to support the U.S. Army's Enduring-High Energy Laser (E-HEL) weapon system program

•Selected for U.S. Navy training contract to provide products and services that will enhance fleet readiness

1Non-GAAP measures. See Exhibit B for definitions and reconciliations.

HII Financial Outlook1

• FY25 shipbuilding revenue between $9.0 and $9.1 billion; expect shipbuilding operating margin2 between 5.5% and 6.5%

•FY25 Mission Technologies revenue between $3.0 to $3.1 billion, Mission Technologies segment operating margin of approximately 4.5%; and Mission Technologies EBITDA margin2 between 8.0% and 8.5%

• Increasing FY25 free cash flow2 guidance to between $550 and $650 million

•Cumulative FY25 & FY26 free cash flow2 target of $1.2B

						Prior FY25 Outlook1			Current FY25 Outlook1
Shipbuilding Revenue						$8.9B - $9.1B			$9.0B - $9.1B
Shipbuilding Operating Margin2						5.5% - 6.5%			5.5% - 6.5%
Mission Technologies Revenue						$2.9B - $3.1B			$3.0B - $3.1B
Mission Technologies Segment Operating Margin						4.0% - 4.5%			~4.5%
Mission Technologies EBITDA Margin2						8.0% - 8.5%			8.0% - 8.5%
Operating FAS/CAS Adjustment						($40M)			($35M)
Non-current State Income Tax Expense3						($15M)			($15M)
Interest Expense						($110M)			($110M)
Non-operating Retirement Benefit						$191M			$191M
Effective Tax Rate						~21%			~22%
Depreciation & Amortization						~$340M			~$340M
Capital Expenditures						~4% of Sales			~4% of Sales
Free Cash Flow2						$500M - $600M			$550M - $650M

1The financial outlook, expectations and other forward-looking statements provided by the company for 2025 and beyond reflect the company's judgment based on the information available at the time of this release. Please see the "Forward-looking Statements" section in this release and our Form 10-Q for factors that may impact the company's ability to meet expectations.

2Non-GAAP measures. See Exhibit B for definitions. In reliance upon Item 10(e)(1)(i)(B) of Regulation S-K, reconciliations of forward-looking GAAP and non-GAAP measures are not provided because of the unreasonable effort associated with providing such reconciliations due to the variability in the occurrence and the amounts of certain components of GAAP and non-GAAP measures. For the same reasons, we are unable to address the significance of the unavailable information, which could be material to future results.

3 Outlook is based on current tax law. Variability exists based on how and when individual states conform to recent federal tax law changes.

About HII

HII is a global, all-domain defense provider. HII's mission is to deliver the world's most powerful ships and all-domain solutions in service of the nation, creating the advantage for our customers to protect peace and freedom around the world.

As the nation's largest military shipbuilder, and with a more than 135-year history of advancing U.S. national security, HII delivers critical capabilities extending from ships to unmanned systems, cyber, ISR, AI/ML and synthetic training. Headquartered in Virginia, HII's workforce is 44,000 strong. For more information, please visit www.HII.com.

Conference Call Information

HII will webcast its earnings conference call at 9 a.m. Eastern time today. A live audio broadcast of the conference call and supplemental presentation will be available on the investor relations page of the company's website: www.HII.com. A telephone replay of the conference call will be available from noon today through Thursday, November 6th by calling (866) 813-9403 or (929) 458-6194 and using access code 981754.