Thales S.a Stock Earnings Reports

Thales reported a strong 2025: order intake stayed at record level (EUR 25.3bn) with a book-to-bill of 1.14, sales up 8.8% organically to EUR 22.1bn, adjusted EBIT up ~13% with margin at 12.4%, adjusted net income (group share) above EUR 2bn and record free operating cash flow of ~EUR 2.6bn (128% conversion). The Board proposes a dividend increase to EUR 3.90 (up 5.5%). Strategic highlights: expansion of production capacity to meet defense ramp-ups, continued R&D and AI investment (cortAIx deployed across divisions), and a signed MoU with Airbus and Leonardo to create a large European space player (targeted 2027 launch subject to approvals). Defence remains the growth engine (Defence orders EUR 15.1bn, backlog EUR 42bn, 3.4 years of sales) with key wins including SAMP/T NG and multiple large contracts; Aerospace (Avionics & Space) performed strongly; Cyber & Digital was broadly flat organically with Cyber Products recovering in Q4 after integration effects from the Imperva acquisition. Cash generation and deleveraging were standout positives (net debt down to EUR 1.6bn); 2026 guidance: book-to-bill >1, organic sales growth 6–7% (sales EUR 23.3–23.6bn), adjusted EBIT margin 12.6–12.8%, and free operating cash flow conversion 95–100%. CapEx expected to rise to ~EUR 820–850m in 2026 as Thales ramps industrial capacity; the group plans to recruit >9,000 employees in 2026. Risks/notes for investors: Cyber recovery execution is key (Imperva integration completed but market recovery required), BROMO/space JV still subject to regulatory and social approvals, FX was a modest headwind in 2025, and France’s tax surcharge is a recurring P&L item affecting 2026 (~EUR 90m impact). Revenue exposure to Ukraine was ~EUR 450m in 2025 (~3.5% of Defence revenue) and is expected to rise to ~EUR 600m in 2026.