Huntington Ingalls Industries (NYSE:HII) reported fourth-quarter and full-year 2025 results that executives said reflected improved shipbuilding throughput, continued hiring, and broad-based progress across programs. Management also outlined a 2026 outlook that assumes further throughput gains and successful completion of key contract negotiations in the first half of the year.
2025 results and throughput progress
CEO Chris Kastner said the company’s 2025 performance was driven by a “measurable increase in shipbuilding throughput,” which he described as a key indicator for scheduled performance. HII reported 2025 revenue of $12.5 billion, up 8.2%, and diluted earnings per share of $15.39. Awards totaled $16.9 billion, and Kastner said all three divisions achieved record revenue levels.
HII also said it met a 2025 cost-reduction target of $250 million, primarily by removing overhead and support labor costs.
Quarterly performance: revenue growth and margin improvement
CFO Tom Stiehle said fourth-quarter revenue was $3.5 billion, up about 16% year over year, with growth across all three segments. Segment operating income in the quarter rose to $195 million from $103 million a year earlier, and segment operating margin increased to 5.6% from 3.4%.
- Ingalls: Q4 revenue of $889 million increased 21% year over year, driven mainly by higher volumes on amphibious assault ships and surface combatants. Operating margin improved to 7.6% from 6.3%.
- Newport News: Q4 revenue of $1.9 billion increased 19%, primarily due to higher submarine and aircraft carrier volumes. Operating margin improved to 4.4% from 2.4%. Stiehle said results benefited from favorable contract adjustments on Virginia-class work, while the prior-year quarter included unfavorable cumulative adjustments and certain contract incentives.
- Mission Technologies: Q4 revenue of $731 million increased 2.5%, with growth in warfare systems, global security, and unmanned systems. Operating margin improved to 5.9% from 2.7%.
Net earnings for the quarter were $159 million, up from $123 million a year earlier, and diluted EPS was $4.04 compared to $3.15.
Shipbuilding milestones and program updates
Kastner highlighted multiple 2025 shipbuilding milestones. At Ingalls, the company delivered its second Flight 3 destroyer (DDG-128 Ted Stevens), launched DDG-129 Jeremiah Denton, and authenticated the keel of DDG-135 Thad Cochran. Ingalls also christened LPD-30 Harrisburg and began fabrication of LPD-32 Philadelphia. Kastner said LHA-8 Bougainville is in the test program and has achieved generator light-off.
At Newport News Shipbuilding, HII delivered Virginia-class submarine SSN 798 Massachusetts, launched SSN 800 Arkansas, laid the keel for SSN 804 Barb, and undocked SSN 796 New Jersey in preparation for redelivery. The yard also delivered the bow of the first Columbia-class submarine, SSBN 826 District of Columbia. On aircraft carriers, Kastner said dock trials were completed on CVN 79 Kennedy and the team is finishing its first sea trial evolution, moving closer to preliminary acceptance and delivery. He added CVN 80 reached 50% erected in dry dock, while CVN 81 keel units are in fabrication and major material components continue to arrive.
Looking ahead, Kastner said HII expects to deliver two ships in 2026—SSN 800 and LPD-30—and complete preliminary acceptance of CVN 79. He also noted that the company accelerated its forecast of LPD-30 delivery into 2026 and adjusted LHA-8 delivery to 2027 to avoid potential conflicts in labor or equipment and to set clear priorities with the Navy across interim milestones.
During Q&A, management said it remains focused on delivering SSN 800 and LPD-30 toward the end of 2026, citing them as key points of risk and opportunity.
Mission Technologies growth, unmanned systems, and margins
Kastner said Mission Technologies surpassed $3 billion of revenue for the first time in 2025 and pointed to milestones including work on a U.S. Army high-energy laser weapon system, the GRIMM electronic warfare solution, deliveries of Lionfish small unmanned underwater vehicles to the U.S. Navy, and delivery of the company’s 750th REMUS autonomous underwater vehicle. HII also unveiled the Romulus family of unmanned surface vessels, powered by its Odyssey autonomy software suite, with the first prototype under construction on the Gulf Coast.
In response to questions about mix and growth in unmanned solutions, Kastner said HII does not break out growth rates by Mission Technologies market segment, but described unmanned undersea and surface as “doing very well” and positioned the business for potential tailwinds tied to evolving Navy concepts for a hybrid fleet.
Stiehle said Mission Technologies’ 2025 operating margin improved to 5% from 3.9% in 2024, driven in part by lower amortization of purchased intangible assets and better performance in warfare systems. He said purchased intangible amortization was about $89 million in 2025 versus about $99 million in 2024, and EBITDA margin improved to 8.6% from 7.9%.
2026 outlook: growth targets, cash flow, and capital investment
HII raised its medium-term shipbuilding revenue growth guidance to approximately 6% from approximately 4%. Stiehle added the company now expects a consolidated medium-term top-line CAGR of about 6%, comprised of shipbuilding growth of about 6% and Mission Technologies growth of about 5%. He said shipbuilding growth could have additional upside because the forecast does not yet account for the newly announced frigate or battleship programs, and management expects to revisit assumptions once acquisition strategies become clearer.
For 2026, management guided to shipbuilding revenue of $9.7 billion to $9.9 billion, with shipbuilding margins of 5.5% to 6.5%. Mission Technologies revenue is expected to be $3.0 billion to $3.2 billion, with margins of approximately 5% and EBITDA margins of 8.4% to 8.6%. Free cash flow is expected to be $500 million to $600 million.
Stiehle said the guidance assumes the company meets its outlined shipbuilding throughput improvements and reaches agreement on the next Virginia-class and Columbia-class submarine contracts in the first half of 2026. In Q&A, management emphasized the need to complete those contract negotiations in the first half of the year to avoid production schedule risks, describing the effort as a “big complicated contract” involving three parties.
HII expects 2026 capital expenditures of about 4% to 5% of sales, or roughly $500 million to $600 million, to support capacity and throughput. Kastner said capex is likely to remain elevated due to the opportunity set, though the company did not provide longer-term capex guidance beyond 2026. For the first quarter of 2026, HII expects shipbuilding revenue of about $2.3 billion and Mission Technologies revenue of $700 million to $750 million, with shipbuilding operating margin near 5.5% and Mission Technologies operating margin of 4% to 4.5%. The company expects first-quarter free cash flow to be negative, approximately a $600 million use, as fourth-quarter working capital benefits unwind.
On capital allocation, management reiterated that reinvestment in the shipyards remains the priority, noting shipbuilding cash flows can be “lumpy.” In 2025, HII generated free cash flow of $800 million, above its guidance range, driven by strong working capital and slightly lower-than-planned capex. The company invested $396 million in capex, paid $213 million in dividends, and did not repurchase shares. It ended 2025 with $774 million in cash and total liquidity of about $2.5 billion.
About Huntington Ingalls Industries (NYSE:HII)
Huntington Ingalls Industries (NYSE: HII) is America’s largest military shipbuilding company and a leading provider of professional services to the U.S. government. Headquartered in Newport News, Virginia, HII designs, constructs and maintains nuclear-powered aircraft carriers, submarines and other complex vessels for the U.S. Navy. The company’s products include nuclear aircraft carriers, Virginia-class and Columbia-class submarines, as well as amphibious assault ships, destroyers and cutters.
Established in 2011 as a spin-off from Northrop Grumman’s shipbuilding operations, HII traces its heritage to two historic builders: Newport News Shipbuilding, founded in the 19th century, and Ingalls Shipbuilding, founded in 1938.
