Defense Firms Set Revenue Record Amid NATO Production
Global defense companies posted a combined $700 billion in revenue in 2025, an 11.3% increase, as high spending in the U.S.
Global defense companies set another revenue record in 2025, with production bottlenecks in Western nations emerging as a key challenge. Companies in the United States and Europe rode a wave of significant defense-spending increases on both sides of the Atlantic.
In the United States, the 2025 Reconciliation Act is set to pump most of its total $156 billion into acquisition, on top of a regular defense budget of roughly $900 billion for that year. Mark Cancian, a senior adviser at the Center for Strategic and International Studies, noted it will take years for that enacted money to flow to companies. "But it will be a big boost for many companies," he said.
In Europe, governments spooked by Russia's full-scale invasion of Ukraine in 2022 drastically increased military expenditures years ago. Companies there have also rewired business strategies to align with a preference for European-made equipment.
Top 100 Firms See Major Growth
The latest Defense News Top 100 ranking shows the overall upward trend. Companies posted a combined $700 billion in annual defense revenue, compared with $629 billion the prior year. This marks an 11.3% increase.
The first four spots remain U.S. Firms. Britain-based BAE Systems, with a sizable U.S. Operation, is the first non-American company, moving into fifth place.
| Rank | Company | Annual Defense Revenue (2025) |
|---|---|---|
| 1 | Lockheed Martin | $72.1 billion |
| 2 | RTX | $46 billion |
| 3 | General Dynamics | $39.4 billion |
| 4 | Northrop Grumman | $37 billion |
| 5 | BAE Systems | $36 billion |
| 6 | Boeing (defense segment) | $35.7 billion |
| 7 | Aviation Industry Corporation of China | $32.3 billion |
| 8 | L3Harris | $17.4 billion |
| 9 | Leonardo | Not specified |
| 10 | Airbus | Not specified |
| 12 | Thales | Not specified |
| 15 | Rheinmetall | $11.2 billion |
| 13 | Huntington Ingalls | $12.3 billion |
| 16 | Hanwha (South Korea) | $10.4 billion |
Germany's Rheinmetall represents the European defense uptick, reporting $11.2 billion in 2025 revenue, up from $8.3 billion. The company now ranks 15th, up from 18th. The firm has branched into all domains of war and embraced the production of explosives and ammunition.
Air Defense and Naval Modernization Drive Demand
The air defense category faces the biggest shortfalls. Companies have expanded supply chains to build artillery shells urgently needed in Ukraine. However, sufficient interceptor missiles and drones to defend against Russian missiles are still lacking.
With the Patriot air defense complex in U.S. Hands, European and Ukrainian officials are considering alternatives. Offerers include Israeli companies Elbit (rank 21), Israeli Aerospace Industries (27), and Rafael (30), as well as pan-European firm MBDA (26) and Germany's Diehl (58).
Naval shipbuilding companies have been lifted by capital-intensive modernization projects worldwide. In the U.S., the 2025 Reconciliation Act dedicates $29 billion for shipbuilding alone. "The Biden administration, and now the Trump administration, have just been pouring money into shipbuilding - way beyond what the industry can absorb," said Cancian. He added that talk of building another shipyard leaves shipbuilders with order books filled into the 2030s or beyond.
Industrial Shifts and National Ambitions
Production bottlenecks and civilian economic woes have led to creative arrangements. In Europe, some automotive and rail car makers have turned factory floors into production sites for drones and counter-drone equipment.
The rush to re-arm has prompted European leaders to tout secondary economic effects. U.K. Defense officials published figures in August stating that British weapons and ammunition manufacturing jobs rose by 51% in the 2024-25 period. An August 20 statement by the Ministry of Defence said this "underlines defense as an engine for growth."
Turkish companies, operating under a government mandate for domestic production, improved their rankings. Aselsan jumped to spot 40 on roughly $4.5 billion in revenue, and Roketsan landed at spot 64 on $2.4 billion.
Polish state-owned armaments group PGZ jumped from rank 54 to number 41 based on $4.4 billion in revenue. The Polish government plans to create one of NATO's most powerful armies in Europe.
The collection of Ukrainian defense companies under Ukroboronprom improved its ranking to spot 36, up from 49, with reported revenue of $4.6 billion in 2025. The country's defense industry now provides armaments it previously had to import. Allied militaries are eager to incorporate its know-how into their own supply chains.
Looking ahead, more spending is expected in air and missile defense. Much of that will be connected to the Trump administration's Golden Dome program, a controversial effort theorized to make the United States almost impervious to aerial attacks. "We still don't really know what it is," Cancian said, adding the lack of clarity could make the project a hard sell.
