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HII Reports Second Quarter 2025 Results

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HII (NYSE: HII) reported Q2 2025 results with revenues of $3.1 billion, up 3.5% year-over-year. Net earnings were $152 million with diluted EPS of $3.86, compared to $173 million and $4.38 in Q2 2024.

The company secured new contract awards of $11.9 billion, achieving a record backlog of $56.9 billion. Operating margin decreased to 5.3% from 6.3% year-over-year. Notable developments include a strategic partnership with C3 AI for digital technologies and AI implementation in shipbuilding.

HII reaffirmed its FY25 guidance, with shipbuilding revenue expected between $8.9-$9.1 billion and Mission Technologies revenue projected at $2.9-$3.1 billion. The company increased its FY25 free cash flow guidance to $500-$600 million.

HII (NYSE: HII) ha riportato i risultati del secondo trimestre 2025 con ricavi pari a 3,1 miliardi di dollari, in crescita del 3,5% rispetto all'anno precedente. L'utile netto è stato di 152 milioni di dollari con un utile per azione diluito di 3,86 dollari, rispetto ai 173 milioni e 4,38 dollari del secondo trimestre 2024.

L'azienda ha ottenuto nuovi contratti per 11,9 miliardi di dollari, raggiungendo un backlog record di 56,9 miliardi di dollari. Il margine operativo è sceso al 5,3% rispetto al 6,3% dell'anno precedente. Tra gli sviluppi rilevanti vi è una partnership strategica con C3 AI per le tecnologie digitali e l'implementazione dell'intelligenza artificiale nella costruzione navale.

HII ha confermato le previsioni per l'intero anno fiscale 2025, con ricavi dalla costruzione navale attesi tra 8,9 e 9,1 miliardi di dollari e ricavi da Mission Technologies stimati tra 2,9 e 3,1 miliardi di dollari. L'azienda ha inoltre aumentato la previsione del flusso di cassa libero per il 2025 a 500-600 milioni di dollari.

HII (NYSE: HII) informó los resultados del segundo trimestre de 2025 con ingresos de 3.1 mil millones de dólares, un aumento del 3.5% interanual. Las ganancias netas fueron de 152 millones de dólares con un BPA diluido de 3.86 dólares, en comparación con 173 millones y 4.38 dólares en el segundo trimestre de 2024.

La compañía aseguró nuevos contratos por 11.9 mil millones de dólares, alcanzando un récord de cartera de pedidos de 56.9 mil millones de dólares. El margen operativo disminuyó a 5.3% desde 6.3% año tras año. Entre los desarrollos destacados se encuentra una alianza estratégica con C3 AI para tecnologías digitales e implementación de IA en la construcción naval.

HII reafirmó su guía para el año fiscal 2025, con ingresos por construcción naval esperados entre 8.9 y 9.1 mil millones de dólares y ingresos de Mission Technologies proyectados entre 2.9 y 3.1 mil millones de dólares. La compañía aumentó su guía de flujo de caja libre para 2025 a 500-600 millones de dólares.

HII (NYSE: HII)� 2025� 2분기 실적� 발표하며 매출액이 31� 달러� 전년 동기 대� 3.5% 증가했습니다. 순이익은 1� 5,200� 달러, 희석 주당순이�(EPS)은 3.86달러�, 2024� 2분기 1� 7,300� 달러와 4.38달러� 비해 감소했습니다.

사� 119� 달러 규모� 신규 계약� 확보하며, 569� 달러� 기록적인 수주 잔고� 달성했습니다. 영업이익률은 전년 동기 대� 6.3%에서 5.3%� 하락했습니다. 주요 발전 사항으로� 조선 분야� 디지� 기술� 인공지� 도입� 위한 C3 AI와� 전략� 파트너십� 포함됩니�.

HII� 2025 회계연도 가이던스를 재확인했으며, 조선 매출은 89억~91� 달러, Mission Technologies 매출은 29억~31� 달러� 예상됩니�. 또한, 2025 회계연도 자유 현금 흐름 가이던스를 5억~6� 달러� 상향 조정했습니다.

HII (NYSE : HII) a annoncé ses résultats du deuxième trimestre 2025 avec un chiffre d'affaires de 3,1 milliards de dollars, en hausse de 3,5 % par rapport à l'année précédente. Le bénéfice net s'est élevé à 152 millions de dollars avec un BPA dilué de 3,86 dollars, contre 173 millions et 4,38 dollars au deuxième trimestre 2024.

L'entreprise a obtenu de nouveaux contrats pour un montant de 11,9 milliards de dollars, atteignant un carnet de commandes record de 56,9 milliards de dollars. La marge d'exploitation a diminué à 5,3 % contre 6,3 % l'année précédente. Parmi les développements notables figure un partenariat stratégique avec C3 AI pour les technologies numériques et la mise en œuvre de l'intelligence artificielle dans la construction navale.

HII a réaffirmé ses prévisions pour l'exercice 2025, avec un chiffre d'affaires attendu dans la construction navale compris entre 8,9 et 9,1 milliards de dollars et un chiffre d'affaires de Mission Technologies projeté entre 2,9 et 3,1 milliards de dollars. L'entreprise a augmenté ses prévisions de flux de trésorerie disponible pour 2025 à 500-600 millions de dollars.

HII (NYSE: HII) meldete die Ergebnisse für das zweite Quartal 2025 mit einem Umsatz von 3,1 Milliarden US-Dollar, was einem Anstieg von 3,5 % im Jahresvergleich entspricht. Der Nettogewinn betrug 152 Millionen US-Dollar bei einem verwässerten Ergebnis je Aktie (EPS) von 3,86 US-Dollar, verglichen mit 173 Millionen und 4,38 US-Dollar im zweiten Quartal 2024.

Das Unternehmen sicherte sich neue Vertragsabschlüsse in Höhe von 11,9 Milliarden US-Dollar und erreichte einen Rekordauftragsbestand von 56,9 Milliarden US-Dollar. Die operative Marge sank von 6,3 % auf 5,3 % im Jahresvergleich. Bedeutende Entwicklungen umfassen eine strategische Partnerschaft mit C3 AI zur digitalen Technologie und KI-Implementierung im Schiffbau.

HII bestätigte seine Prognose für das Geschäftsjahr 2025, mit erwarteten Umsätzen im Schiffbau zwischen 8,9 und 9,1 Milliarden US-Dollar und einem erwarteten Umsatz im Bereich Mission Technologies von 2,9 bis 3,1 Milliarden US-Dollar. Das Unternehmen erhöhte seine Prognose für den freien Cashflow im Geschäftsjahr 2025 auf 500 bis 600 Millionen US-Dollar.

Positive
  • Record backlog of $56.9B from $11.9B in new contract awards
  • Revenue growth of 3.5% year-over-year to $3.1B
  • Strong free cash flow of $730M compared to -$99M in Q2 2024
  • Strategic partnership with C3 AI to implement AI in shipbuilding
  • Secured contract for two additional Block V Virginia-class submarines
Negative
  • Operating margin declined to 5.3% from 6.3% year-over-year
  • Net earnings decreased 12.1% to $152M from $173M in Q2 2024
  • Diluted EPS dropped 11.9% to $3.86 from $4.38 year-over-year
  • Lower performance in Virginia-class submarine program and aircraft carrier construction
  • Segment operating income decreased 15.3% to $172M from $203M

Insights

HII reports mixed Q2 results with declining margins despite revenue growth; record $56.9B backlog provides long-term stability.

HII delivered $3.1 billion in Q2 2025 revenue, representing a 3.5% year-over-year increase. However, this growth was overshadowed by concerning margin compression across all business segments. The company's operating margin declined to 5.3% from 6.3% in Q2 2024, while net earnings fell to $152 million ($3.86 per diluted share) from $173 million ($4.38 per diluted share).

The standout positive is HII's remarkable $11.9 billion in new contract awards, pushing their backlog to a record $56.9 billion. This unprecedented backlog provides exceptional revenue visibility and operational stability for years to come. The $730 million in free cash flow represents an extraordinary improvement from negative $99 million in Q2 2024, demonstrating significantly enhanced cash conversion efficiency.

Newport News Shipbuilding, HII's largest division, showed concerning performance trends with operating margin dropping sharply to 5.1% from 7.2% despite 4.4% revenue growth. This decline stems from performance issues in the Virginia-class submarine program and aircraft carrier construction, partially offset by contract incentives.

Management's commentary about "steady progress on operational initiatives" and "early signs that targeted investments are helping to stabilize the workforce and supply chain" suggests they're addressing these challenges, but haven't yet reversed the negative margin trend. The strategic partnership with C3 AI to implement artificial intelligence in shipbuilding processes represents a forward-looking attempt to improve operational efficiency.

Ingalls Shipbuilding maintained relatively stable performance with a 7.5% operating margin, while Mission Technologies delivered consistent results with a 4.6% margin. The company's increased free cash flow guidance for FY25 (now $500-600 million) indicates management's confidence in their ability to generate cash despite operational challenges.

NEWPORT NEWS, Va., July 31, 2025 (GLOBE NEWSWIRE) -- HII (NYSE: HII) today reported results for the second quarter of fiscal 2025.

Highlights

  • Second quarter revenues were $3.1 billion
  • Second quarter net earnings were $152 million or $3.86 diluted earnings per share
  • New contract awards of $11.9 billion, resulting in record backlog of $56.9 billion
  • Entered into a strategic partnership with C3 AI to expand our use of digital technologies and apply artificial intelligence to accelerate shipbuilding throughput
  • Reaffirming FY25 segment revenue and operating margin guidance1

Second Quarter Results
Second quarter 2025 revenues of $3.1 billion were up 3.5% from the second quarter of 2024, driven by growth at Newport News Shipbuilding, Mission Technologies and Ingalls Shipbuilding.

Operating income in the second quarter of 2025 was $163 million and operating margin was 5.3%, compared to $189 million and 6.3%, respectively, in the second quarter of 2024.

Segment operating income2 in the second quarter of 2025 was $172 million and segment operating margin2 was 5.6%, compared to $203 million and 6.8%, respectively, in the second quarter of 2024. The decreases were driven primarily by less favorable segment results at Newport News Shipbuilding compared to the prior year period.

Net earnings in the quarter were $152 million, compared to $173 million in the second quarter of 2024. Diluted earnings per share in the quarter was $3.86, compared to $4.38 in the second quarter of 2024.

Net cash provided by operating activities in the quarter was $823 million and free cash flow2 was $730 million, compared to net cash used in operating activities of $9 million and free cash flow1 of negative $99 million in the second quarter of 2024.

New contract awards in the second quarter of 2025 were $11.9 billion, bringing total backlog to a record $56.9 billion as of June 30, 2025.

“Second quarter results were largely in line with our expectations as we continue to make steady progress on our operational initiatives for 2025. We have seen early signs that targeted investments are helping to stabilize the workforce and supply chain, in support of the broader maritime industrial base," said Chris Kastner, HII’s president and CEO.

1The financial outlook, expectations and other forward looking statements provided by the company for 2025 and beyond reflect the company's judgment based on 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 and reconciliations.

Results of Operations

Three Months EndedSix Months Ended
June 30June 30
($ in millions, except per share amounts)20252024$ Change% Change20252024$ Change% Change
Sales and service revenues$3,082$2,977$1053.5%$5,816$5,782$340.6%
Operating income163189(26)(13.8)%324343(19)(5.5)%
Operating margin %5.3%6.3%(106) bps5.6%5.9%(36) bps
Segment operating income1172203(31)(15.3)%343373(30)(8.0)%
Segment operating margin %15.6%6.8%(124) bps5.9%6.5%(55) bps
Net earnings152173(21)(12.1)%301326(25)(7.7)%
Diluted earnings per share$3.86$4.38$(0.52)(11.9)%$7.66$8.25$(0.59)(7.2)%
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 EndedSix Months Ended
June 30June 30
($ in millions)20252024$ Change% Change20252024$ Change% Change
Revenues$724$712$121.7%$1,361$1,367$(6)(0.4)%
Segment operating income5456(2)(3.6)%100116(16)(13.8)%
Segment operating margin %7.5%7.9%(41) bps7.3%8.5%(114) bps

Ingalls Shipbuilding revenues for the second quarter of 2025 were $724 million, an increase of $12 million, or 1.7%, from the same period in 2024, primarily driven by higher volumes in surface combatants, partially offset by lower volumes in amphibious assault ships.

Ingalls Shipbuilding segment operating income for the second quarter of 2025 was $54 million, a decrease of $2 million from the same period in 2024. Segment operating margin in the second quarter of 2025 was 7.5%, compared to 7.9% in the same period last year. The decreases were primarily driven by lower performance and lower contract incentives on amphibious assault ships, partially offset by contract adjustments in surface combatants. Prior year amphibious assault ship results benefited from a delivery contract incentive for USS Richard M. McCool Jr. (LPD 29).

Key Ingalls Shipbuilding milestones for the quarter:

  • Christened guided missile destroyer Jeremiah Denton (DDG 129)
  • Signed MOU with HD Hyundai Heavy Industries to explore opportunities to collaborate on accelerating ship production


Newport News Shipbuilding

Three Months EndedSix Months Ended
June 30June 30
($ in millions)20252024$ Change% Change20252024$ Change% Change
Revenues$1,603$1,535$684.4%$2,999$2,969$301.0%
Segment operating income82111(29)(26.1)%167193(26)(13.5)%
Segment operating margin %5.1%7.2%(212) bps5.6%6.5%(93) bps

Newport News Shipbuilding revenues for the second quarter of 2025 were $1.6 billion, an increase of $68 million, or 4.4%, from the same period in 2024. The increase was primarily driven by higher volumes in the Columbia-class submarine program and the Virginia-class submarine program, partially offset by unfavorable cumulative adjustments on aircraft carrier construction, and favorable contract adjustments and incentives in the second quarter of 2024 on the aircraft carrier Refueling and Complex Overhaul (RCOH) program.

Newport News Shipbuilding segment operating income for the second quarter of 2025 was $82 million, a decrease of $29 million from the same period in 2024. Segment operating margin in the second quarter of 2025 was 5.1% compared to 7.2% in the same period last year. The decreases were primarily driven by lower performance in the Virginia-class submarine program and aircraft carrier construction, partially offset by contract incentives on the Virginia-class submarine program and aircraft carrier construction, as well as higher risk retirement on the Columbia-class submarine program. Additionally, prior year results benefited from favorable contract
adjustments and incentives on the aircraft carrier RCOH program.

Key Newport News Shipbuilding milestones for the quarter:

  • Awarded contract modification for construction of two additional Block V Virginia-class submarines
  • Launched Virginia-class submarine Arkansas (SSN 800)
  • Celebrated first meal aboard Virginia-class submarine Massachusetts (SSN 798)


Mission Technologies

Three Months EndedSix Months Ended
June 30June 30
($ in millions)20252024$ Change% Change20252024$ Change% Change
Revenues$791$765$263.4%$1,526$1,515$110.7%
Segment operating income3636%76641218.8%
Segment operating margin %4.6%4.7%(15) bps5.0%4.2%76 bps

Mission Technologies revenues for the second quarter of 2025 were $791 million, an increase of $26 million, or
3.4%, from the same period in 2024. The increases were primarily due to higher volumes in C5ISR and live, virtual, and constructive training solutions.

Mission Technologies segment operating income for the second quarter of 2025 was $36 million, consistent with results in the second quarter of 2024. Segment operating margin in the second quarter of 2025 was 4.6%, compared to 4.7% in the same period last year as changes in contract mix offset the higher volumes noted above.

Mission Technologies results included approximately $23 million of amortization of purchased intangible assets in the second quarter of 2025, compared to approximately $25 million in the same period last year.

Mission Technologies EBITDA margin1 in the second quarter of 2025 was 8.1%, compared to 8.5% in the second quarter of 2024.

Key Mission Technologies milestones for the quarter:

  • Received multiple award contract to provide live training solutions to the U.S. Army’s Program Executive Office for Simulation, Training and Instrumentation
  • Delivered initial Lionfish small uncrewed undersea vehicles (SUUVs) to the U.S. Navy under multi-year program
  • Announced the order of more than a dozen REMUS 300 SUUVs by Hitachi
  • Achieved a successful forward-deployed launch and recovery of the Yellow Moray uncrewed undersea vehicle (UUV), a variant of the REMUS 600, from the HII-built USS Delaware (SSN 791), a Virginia-class submarine
1Non-GAAP measures. See Exhibit B for definitions and reconciliations.

HII Financial Outlook1

  • Reaffirming FY25 segment revenue and operating margin guidance
    • FY25 shipbuilding revenue between $8.9 and $9.1 billion; expect shipbuilding operating margin2 between 5.5% and 6.5%
    • FY25 Mission Technologies revenue between $2.9 to $3.1 billion, Mission Technologies segment operating margin between 4.0% and 4.5%; and Mission Technologies EBITDA margin2 between 8.0% and 8.5%
  • Increasing FY25 free cash flow2 guidance to between $500 and $600 million
FY25 Outlook1
Shipbuilding Revenue$8.9B - $9.1B
Shipbuilding Operating Margin25.5% - 6.5%
Mission Technologies Revenue$2.9B - $3.1B
Mission Technologies Segment Operating Margin4.0% - 4.5%
Mission Technologies EBITDA Margin28.0% - 8.5%
Operating FAS/CAS Adjustment($40M)
Non-current State Income Tax Expense3($15M)
Interest Expense($110M)
Non-operating Retirement Benefit$191M
Effective Tax Rate~21%
Depreciation & Amortization~$340M
Capital Expenditures~4% of Sales
Free Cash Flow2$500M - $600M
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, August 7th by calling (866) 813-9403 or (929) 458-6194 and using access code 808356.

Cautionary Statement Regarding Forward-Looking Statements and Projections

Statements in this earnings release and in our other filings with the SEC, as well as other statements we may make from time to time, other than statements of historical fact, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by words such as "may," "will," "should," "expects," "intends," "plans," "anticipates," "believes," "estimates," "guidance," "outlook," "predicts," "potential," "continue," and similar words or phrases or the negative of these words or phrases. These statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements. Although we believe the expectations reflected in the forward-looking statements are reasonable when made, we cannot guarantee future results, levels of activity, performance, or achievements. There are a number of important factors that could cause our actual results to differ materially from the results anticipated by our forward-looking statements, which include, but are not limited to: our dependence on the U.S. Government for substantially all of our business; significant delays or reductions in appropriations for our programs and/or changes in customer priorities and requirements (including government budgetary constraints, shifts in defense spending, and changes in customer short-range and long-range plans);our ability to estimate our future contract costs, including cost increases due to inflation, labor challenges, changes in trade policy, or other factors and our efforts to recover or offset such costs and/or changes in estimated contract costs, and perform our contracts effectively; changes in business practices, procurement processes and government regulations and our ability to comply with such requirements; adverse economic conditions in the United States and globally; our level of indebtedness and ability to service our indebtedness; our ability to deliver our products and services at an affordable life cycle cost and compete within our markets; our ability to attract, retain, and train a qualified workforce; subcontractor and supplier performance and the availability and pricing of raw materials and components; our ability to execute our strategic plan, including with respect to share repurchases, dividends, capital expenditures, and strategic acquisitions; investigations, claims, disputes, enforcement actions, litigation (including criminal, civil, and administrative), and/or other legal proceedings, and improper conduct of employees, agents, subcontractors, suppliers, business partners, or joint ventures in which we participate, including the impact on our reputation or ability to do business; changes in key estimates and assumptions regarding our pension and retiree health care costs; security threats, including cyber security threats, and related disruptions; natural and environmental disasters and political instability; health epidemics, pandemics and similar outbreaks; and other risk factors discussed herein and in our other filings with the SEC. There may be other risks and uncertainties that we are unable to predict at this time or that we currently do not expect to have a material adverse effect on our business, and we undertake no obligation to update or revise any forward-looking statements. You should not place undue reliance on any forward-looking statements that we may make.

This release also contains non-GAAP financial measures and includes a GAAP reconciliation of these financial measures. Non-GAAP financial measures should not be construed as being more important than comparable GAAP measures.


Exhibit A: Financial Statements

HUNTINGTON INGALLS INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED)

Three Months Ended June 30Six Months Ended June 30
(in millions, except per share amounts)2025202420252024
Sales and service revenues
Product sales$1,957$1,926$3,670$3,713
Service revenues1,1251,0512,1462,069
Sales and service revenues3,0822,9775,8165,782
Cost of sales and service revenues
Cost of product sales1,6961,6273,1473,164
Cost of service revenues9919181,8801,811
Income from operating investments, net8112123
Other income and gains (losses), net111
General and administrative expenses241255487487
Operating income163189324343
Other income (expense)
Interest expense(28)(24)(56)(45)
Non-operating retirement benefit47469590
Other, net651212
Earnings before income taxes188216375400
Federal and foreign income tax expense36437474
Net earnings$152$173$301$326
Basic earnings per share$3.86$4.38$7.66$8.25
Weighted-average common shares outstanding39.439.539.339.5
Diluted earnings per share$3.86$4.38$7.66$8.25
Weighted-average diluted shares outstanding39.439.539.339.5
Dividends declared per share$1.35$1.30$2.70$2.60
Net earnings from above$152$173$301$326
Other comprehensive income
Change in unamortized benefit plan costs1429
Tax expense for items of other comprehensive income(2)
Other comprehensive income, net of tax1427
Comprehensive income$153$177$303$333

HUNTINGTON INGALLS INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)

($ in millions)June 30,
2025
December 31,
2024
Assets
Current Assets
Cash and cash equivalents$343$831
Accounts receivable, net of allowance for expected credit losses of $2 million as of 2025 and 2024377212
Contract assets1,8111,683
Inventoried costs215208
Income taxes receivable153204
Prepaid expenses and other current assets7490
Total current assets2,9733,228
Property, Plant, and Equipment, net of accumulated depreciation of $2,663 million as of 2025 and $2,583 million as of 20243,5763,450
Operating lease assets242239
Goodwill2,6512,618
Other intangible assets, net of accumulated amortization of $1,170 million as of 2025 and $1,118 million as of 2024746782
Pension plan assets1,4921,422
Miscellaneous other assets418402
Total assets$12,098$12,141
Liabilities and Stockholders' Equity
Current Liabilities
Trade accounts payable650598
Accrued employees� compensation384392
Short-term debt and current portion of long-term debt3503
Current portion of postretirement plan liabilities124124
Current portion of workers� compensation liabilities203201
Contract liabilities969774
Other current liabilities417399
Total current liabilities2,7502,991
Long-term debt2,7002,700
Pension plan liabilities142142
Other postretirement plan liabilities199209
Workers� compensation liabilities449443
Long-term operating lease liabilities206205
Deferred tax liabilities359378
Other long-term liabilities411407
Total liabilities7,2167,475
Commitments and Contingencies
Stockholders� Equity
Common stock, $0.01 par value; 150,000,000 shares authorized; 53,824,958 shares issued and 39,240,249 shares outstanding as of 2025, and 53,714,128 shares issued and 39,129,419 shares outstanding as of 202411
Additional paid-in capital2,0662,045
Retained earnings5,2905,097
Treasury stock(2,449)(2,449)
Accumulated other comprehensive loss(26)(28)
Total stockholders� equity4,8824,666
Total liabilities and stockholders� equity$12,098$12,141

HUNTINGTON INGALLS INDUSTRIES, INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Six Months Ended June 30
($ in millions)20252024
Operating Activities
Net earnings$301$326
Adjustments to reconcile net cash provided by (used in) operating activities:
Depreciation110106
Amortization of purchased intangibles5254
Stock-based compensation337
Deferred income taxes(19)(28)
Gain on investments in marketable securities(10)(11)
Other non-cash transactions, net92
Change in
Accounts receivable(165)(239)
Contract assets(128)(157)
Inventoried costs(7)(12)
Prepaid expenses and other assets57(38)
Accounts payable and accruals272(164)
Retiree benefits(77)(57)
Net cash provided by (used in) operating activities428(211)
Investing Activities:
Capital expenditures
Capital expenditure additions(163)(165)
Grant proceeds for capital expenditures33
Acquisitions of businesses(133)
Other investing activities, net2
Net cash used in investing activities(291)(162)
Financing Activities:
Repayment of long-term debt(500)(229)
Proceeds from revolving credit facility borrowings42
Repayment of revolving credit facility borrowings(42)
Net borrowings on commercial paper440
Dividends paid(106)(102)
Repurchases of common stock(127)
Employee taxes on certain share-based payment arrangements(14)(25)
Other financing activities, net(5)(3)
Net cash used in financing activities(625)(46)
Change in cash and cash equivalents(488)(419)
Cash and cash equivalents, beginning of period831430
Cash and cash equivalents, end of period$343$11
Supplemental Cash Flow Disclosure
Cash paid for income taxes (net of refunds)$55$157
Cash paid for interest$42$51
Non-Cash Investing and Financing Activities
Capital expenditures accrued in accounts payable$6$9

Exhibit B: Non-GAAP Measures Definitions & Reconciliations

This earnings release contains non-GAAP (accounting principles generally accepted in the United States of America) financial measures as defined by SEC Regulation G and indicated by a footnote in the text of this release. Definitions for the non-GAAP measures, and related reconciliations, are provided below. Because not all companies use identical definitions or calculations, our presentation of these measures may not be comparable to similarly titled measures of other companies.

Segment Operating Income and Segment Operating Margin We internally manage our operations by reference to segment operating income and segment operating margin and use these measures to evaluate our core operating performance. We believe that segment operating income and segment operating margin reflect additional ways of viewing aspects of our operations that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business. These measures should be considered in addition to, and not as alternatives for, operating income and operating margin or any other performance measure presented in accordance with GAAP.

Segment operating income is defined as operating income for the relevant segment(s) before the Operating FAS/CAS Adjustment and non-current state income taxes.

Segment operating margin is defined as segment operating income as a percentage of sales and service revenues.

Shipbuilding operating margin, Mission Technologies EBITDA and Mission Technologies EBITDA margin. We use shipbuilding operating margin, Mission Technologies EBITDA and Mission Technologies EBITDA margin to evaluate our core operating performance. We believe these measures reflect additional ways of viewing aspects of our operations that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business. These measures should be considered in addition to, and not as alternatives for, operating income and operating margin or any other performance measure presented in accordance with GAAP.

Shipbuilding operating margin is defined as the combined segment operating income of our Newport News Shipbuilding segment and Ingalls Shipbuilding segment as a percentage of shipbuilding revenue. Shipbuilding revenue is the sum of revenues of our Newport News Shipbuilding segment and Ingalls Shipbuilding segment.

Mission Technologies EBITDA is defined as Mission Technologies segment operating income before interest expense, income taxes, depreciation, and amortization.

Mission Technologies EBITDA margin is defined as Mission Technologies EBITDA as a percentage of Mission Technologies revenues.

Free Cash Flow. We use free cash flow as a key operating metric in assessing the performance of our business and as a key performance measure in evaluating management performance and determining incentive compensation. We believe free cash flow is an important measure that may be useful to investors and other users of our financial statements because it provides insight into our current and period-to-period performance and our ability to generate cash from continuing operations. Free cash flow has limitations as an analytical tool and should not be considered in isolation from, or as a substitute for, net income as a measure of our performance or net cash provided by operating activities as a measure of our liquidity.

Free cash flow is defined as net cash provided by (used in) operating activities less capital expenditures net of related grant proceeds.

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.

Reconciliations of Segment Operating Income and Segment Operating Margin

Three Months EndedSix Months Ended
June 30June 30
($ in millions)2025202420252024
Ingalls revenues$724$712$1,361$1,367
Newport News revenues1,6031,5352,9992,969
Mission Technologies revenues7917651,5261,515
Intersegment eliminations(36)(35)(70)(69)
Sales and Service Revenues3,0822,9775,8165,782
Operating Income163189324343
Operating FAS/CAS Adjustment6151632
Non-current state income taxes3(1)3(2)
Segment Operating Income172203343373
As a percentage of sales and service revenues5.6%6.8%5.9%6.5%
Ingalls segment operating income5456100116
As a percentage of Ingalls revenues7.5%7.9%7.3%8.5%
Newport News segment operating income82111167193
As a percentage of Newport News revenues5.1%7.2%5.6%6.5%
Mission Technologies segment operating income36367664
As a percentage of Mission Technologies revenues4.6%4.7%5.0%4.2%

Reconciliation of Free Cash Flow

Three Months EndedSix Months Ended
June 30June 30
($ in millions)2025202420252024
Net cash provided by (used in) operating activities$823$(9)$428$(211)
Less capital expenditures:
Capital expenditure additions(96)(90)(163)(165)
Grant proceeds for capital expenditures333
Free cash flow$730$(99)$268$(373)

Reconciliation of Mission Technologies EBITDA and EBITDA Margin

Three Months EndedSix Months Ended
June 30June 30
($ in millions)2025202420252024
Mission Technologies sales and service revenues$791$765$1,526$1,515
Mission Technologies segment operating income$36$36$76$64
Mission Technologies depreciation expense3265
Mission Technologies amortization expense23254550
Mission Technologies state tax expense2244
Mission Technologies EBITDA$64$65$131$123
Mission Technologies EBITDA margin8.1%8.5%8.6%8.1%


Contacts:
Brooke Hart (Media)
[email protected]
202-264-7108
Christie Thomas (Investors)
[email protected]
757-380-2104

FAQ

What were HII's Q2 2025 earnings results?

HII reported Q2 2025 revenues of $3.1 billion (up 3.5% YoY), net earnings of $152 million, and diluted EPS of $3.86. Operating margin was 5.3%.

How much is HII's current contract backlog in 2025?

HII achieved a record backlog of $56.9 billion as of June 30, 2025, following new contract awards worth $11.9 billion in Q2 2025.

What is HII's revenue guidance for FY 2025?

HII expects FY25 shipbuilding revenue between $8.9-$9.1 billion and Mission Technologies revenue between $2.9-$3.1 billion.

How did HII's operating margin change in Q2 2025?

HII's operating margin decreased to 5.3% in Q2 2025 from 6.3% in Q2 2024, primarily due to less favorable results at Newport News Shipbuilding.

What major contracts or partnerships did HII announce in Q2 2025?

HII announced a strategic partnership with C3 AI for AI implementation in shipbuilding and received a contract modification for two additional Block V Virginia-class submarines.
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Aerospace & Defense
Ship & Boat Building & Repairing
United States
NEWPORT NEWS