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Thales: Thales' 2025 Full Year Results: Strong Commercial Performance and Strategic Progress

Thales delivered a robust financial performance in 2025, with revenues growing organically by 8.8% to a record EUR 22.1 billion, driven by Defence and Aerospace activities. The adjusted EBIT margin stood at 12.4%, with adjusted EBIT rising by 13% to EUR 2.7 billion. Adjusted EPS was EUR 9.76, and actual EPS came out at EUR 5.32, slightly below estimates of EUR 5.46. Free operating cash flow reached a record high of EUR 2.6 billion, up 27% year-on-year.

HO.PA

EUR 248.3

-0.28%

A-Score: 5.0/10

Publication date: March 3, 2026

Full Report

Author: Analystock.ai

📋 Highlights
  • Record Order Intake EUR 25.3 billion in 2025 with a book-to-bill ratio of 1.14.
  • Organic Sales Growth 8.8% to EUR 22.1 billion, driven by Defence and Aerospace segments.
  • Adjusted EBIT Rise 13% increase to EUR 2.7 billion, with a margin of 12.4%.
  • Free Operating Cash Flow EUR 2.6 billion, up 27%, achieving a 128% conversion ratio.
  • Strategic AI Investments 800 AI experts, 200 AI patents, and Agentic AI integration in cyber solutions.

Segment-wise Performance

Aerospace saw a solid 8.7% organic sales growth, driven by Avionics and Space. Defence set a new record high in order intake, with a book-to-bill ratio above 1 for the seventh year in a row. Cyber & Digital sales were flat organically, impacted by a mixed performance, but adjusted EBIT margin resisted in the context of lower revenues. As Patrice Caine, CEO, emphasized, "AI is a key element of Thales' global competitiveness plan, used in various products, such as sensors, radars, and electronic warfare equipment, as well as in decision-making systems."

Outlook and Guidance

For 2026, Thales expects organic sales growth of 6-7%, corresponding to sales of EUR 23.3-23.6 billion. The company targets an adjusted EBIT margin of 12.6-12.8% and a free operating cash flow conversion ratio of 95-100%. Defence is expected to grow at a high single-digit rate, Aerospace at mid-single digit to mid-single digit plus, and Cyber & Digital at mid-single digit.

Valuation and Dividend

With a P/E Ratio of 75.33 and an EV/EBITDA of 21.77, Thales' valuation appears to be demanding. However, the company's dividend yield stands at 1.52%, and the proposed 5.5% increase in dividend to EUR 3.90 per share may attract income investors. The Free Cash Flow Yield is 4.95%, indicating a reasonable cash generation capability. Analysts estimate next year's revenue growth at 8.1%, which may support the current valuation.

Strategic Initiatives

Thales is focused on restoring growth in its cyber business, leveraging the integration of Imperva, and delivering commercial synergies. The company is investing in AI-driven productivity and scaling AI capabilities across its offerings. Thales' cyber business is expected to grow, driven by efficient solutions to fight against AI-powered cyber attacks. The company is also making progress in promoting gender diversity and reducing CO2 emissions.

Thales's A-Score