Cash flow generation remains highly volatile, evidenced by a $3.1 billion working capital outflow in 2026Q1 that resulted in a negative 18.4% free cash flow margin for the period.
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 | Dec'10 | Dec'09 | Dec'08 | Dec'07 | Dec'06 | Dec'05 | Dec'04 | Dec'03 | Dec'02 | Dec'01 | Dec'00 | Dec'99 | Dec'98 | Dec'97 | Dec'96 |
|---|
| Cash from Operations | 4.67B | 4.76B | 4.39B | 3.88B | 2.9B | 3.57B | 4.3B | 4.3B | 3.83B | 2.61B | 2.81B | 2.16B | 2.59B | 2.48B | 2.64B | 2.12B | 2.45B | 2.13B | 3.21B | 2.89B | 1.76B | 2.63B | 1.94B | 798M | 1.69B | 817M | 1.01B | 1.21B | 244M | 730M | 701M |
| Operating CF Margin % | - | 11.34% | 10.69% | 9.86% | 7.93% | 10% | 11.7% | 12.7% | 12.72% | 10.13% | 11.48% | 9.19% | 10.81% | 10.07% | 10.47% | 8.01% | 8.72% | 6.32% | 9.48% | 9.03% | 5.82% | 8.55% | 6.49% | 3.05% | 9.82% | 6.03% | 13.26% | 13.42% | 2.74% | 7.98% | 8.69% |
| Operating CF Growth % | 48.97% | 8.41% | 13.24% | 33.57% | -18.67% | -17.14% | 0.19% | 12.28% | 46.46% | -7.11% | 30.11% | -16.62% | 4.43% | -5.95% | 24.82% | -13.78% | 15% | -33.57% | 11.11% | 64.58% | -33.16% | 35.69% | 142.61% | -52.75% | 106.73% | -19.11% | -16.32% | 394.67% | -66.58% | 4.14% | -5.78% |
| Net Income | 4.58B | 4.18B | 4.17B | 2.06B | 4.9B | 7B | 3.19B | 2.25B | 3.23B | 2.02B | 2.2B | 1.99B | 2.07B | 1.95B | 1.98B | -32M | 1.92B | 1.69B | -1.26B | 1.79B | 1.54B | 1.38B | 1.09B | 808M | 64M | 427M | 608M | 483M | 194M | 407M | 234M |
| Depreciation & Amortization | 1.51B | 1.47B | 1.37B | 1.34B | 1.34B | 1.24B | 1.27B | 1.02B | 800M | 475M | 456M | 467M | 462M | 495M | 510M | 544M | 555M | 585M | 761M | 719M | 691M | 755M | 717M | 635M | 525M | 645M | 381M | 389M | 393M | 418M | 367M |
| Stock-Based Compensation | 119M | 119M | 101M | 87M | 99M | 94M | 90M | 127M | 86M | 94M | 93M | 99M | 134M | 144M | 183M | 140M | 136M | 105M | -48M | -52M | -57M | 172M | 154M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Deferred Taxes | 890M | 548M | -582M | -988M | -321M | 603M | 210M | -509M | 234M | 603M | 36M | 572M | 216M | 128M | -45M | -249M | 365M | 251M | 183M | 175M | 183M | 105M | 91M | 1.02B | -1.51B | 174M | 345M | 230M | 112M | 188M | 126M |
| Other Non-Cash Items | -1.22B | -701M | -1.01B | 1.53B | -2.52B | -5.55B | 1B | 1.99B | 392M | -646M | -161M | -711M | -366M | -137M | -12M | 2.18B | 198M | -545M | 3.13B | 216M | 107M | -77M | 15M | 53M | 152M | 36M | 12M | 20M | 28M | 16M | 6M |
| Working Capital Changes | -1.21B | -863M | 335M | -144M | -600M | 181M | -1.45B | -575M | -914M | 72M | 189M | -255M | 78M | -99M | 26M | -472M | -720M | 51M | 450M | 42M | -710M | 289M | -134M | -1.85B | 1.71B | -235M | 79M | 327M | -452M | -272M | -126M |
| Change in Receivables | -548M | -108M | -33M | 54M | -44M | -10M | -285M | 122M | 202M | -677M | -461M | -30M | -105M | 171M | 90M | 350M | -471M | -6.31B | 0 | 0 | 0 | -5.27B | -5.67B | -5.38B | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Change in Inventory | 78M | 97M | -358M | -220M | -205M | -52M | 18M | -135M | -37M | 36M | -15M | -80M | -24M | 101M | 46M | -2M | -64M | -291M | -521M | 8M | -73M | -230M | 3M | -54M | -211M | -28M | 77M | 172M | -111M | -147M | 7M |
| Change in Payables | 1.1B | 646M | -513M | 519M | 572M | 376M | 719M | 617M | 381M | 539M | 198M | -632M | -89M | -169M | 23M | -357M | -274M | 20M | 0 | 0 | 0 | 361M | 322M | -325M | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Cash from Investing | -1.07B | -1.16B | -1.75B | -1.58B | -1.24B | 2.06B | -1.21B | -1.21B | -8.88B | -889M | -805M | -431M | -645M | -346M | -84M | 680M | -760M | 867M | -626M | -1.43B | -601M | -855M | 9M | 2.88B | -118M | -3.2B | -78M | -392M | -235M | -113M | -3B |
| Capital Expenditures | -1.36B | -1.45B | -1.77B | -1.77B | -1.44B | -1.42B | -1.42B | -1.26B | -1.25B | -928M | -920M | -471M | -561M | -364M | -331M | -488M | -585M | -722M | -681M | -685M | -737M | -824M | -672M | -701M | -538M | -393M | -274M | -433M | -261M | -238M | -194M |
| CapEx % of Revenue | 3.21% | 3.46% | 4.31% | 4.52% | 3.92% | 3.97% | 3.86% | 3.74% | 4.15% | 3.6% | 3.75% | 2% | 2.34% | 1.48% | 1.31% | 1.85% | 2.08% | 2.14% | 2.01% | 2.14% | 2.44% | 2.68% | 2.25% | 2.67% | 3.13% | 2.9% | 3.6% | 4.81% | 2.93% | 2.6% | 2.4% |
| Acquisitions | 0 | 0 | 0 | 0 | 155M | 3.4B | 205M | 0 | -7.66B | 0 | 0 | 0 | 0 | 0 | 611M | 4M | 14M | 1.62B | 83M | -690M | 43M | -361M | 0 | 0 | 0 | -3.06B | -510M | 0 | 0 | 0 | 0 |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | 290M | 295M | 18M | -4M | 39M | 73M | 4M | 57M | 28M | 39M | 115M | 40M | -84M | 18M | -164M | 1.41B | 5M | -28M | -28M | -55M | -81M | 24M | 658M | 3.58B | 391M | 250M | 706M | 41M | 26M | 125M | -2.8B |
| Cash from Financing | -3.19B | -3.55B | -1.4B | -1.76B | -2.61B | -7B | -432M | -2.42B | -4.59B | 6.96B | -1.79B | -3.27B | -3.23B | -849M | -1.7B | -3.49B | -1.27B | -1.23B | -2.04B | -1.51B | -1.75B | -1.4B | -1.01B | -4.75B | -623M | 2.53B | -755M | -717M | -28M | -677M | 2.32B |
| Debt Issued (Net) | -505M | -502M | 2.5B | 945M | 0 | -2.24B | 1.13B | -729M | -2.4B | 8.23B | 563M | 600M | 0 | 1.96B | 0 | -768M | 292M | 357M | -115M | -159M | -968M | 9M | -735M | -3.82B | -487M | 1.93B | -660M | -612M | 40M | -586M | 2.01B |
| Equity Issued (Net) | -1.21B | -1.62B | -2.51B | -1.5B | -1.5B | -3.71B | -556M | -809M | -1.26B | -393M | -1.55B | -3.37B | -2.67B | -2.37B | -1.32B | -2.19B | -1.18B | -1.1B | -1.45B | -901M | -432M | -1.05B | 48M | -167M | 76M | 825M | 19M | 6M | 36M | 17M | 502M |
| Dividends Paid | -1.32B | -1.29B | -1.19B | -1.12B | -1.05B | -983M | -953M | -880M | -821M | -689M | -640M | -603M | -563M | -545M | -535M | -543M | -545M | -539M | -525M | -504M | -402M | -359M | -322M | -305M | -205M | -158M | -114M | -111M | -109M | -102M | -85M |
| Share Repurchases | -1.21B | -1.62B | -2.51B | -1.5B | -1.5B | -3.71B | -490M | -809M | -1.26B | -393M | -1.55B | -3.18B | -2.67B | -2.37B | -1.32B | -2.29B | -1.18B | -1.1B | -1.55B | -1.18B | -825M | -1.21B | -786M | -200M | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Financing | -149M | -133M | -190M | -90M | -57M | -78M | -57M | -6M | -113M | -190M | -162M | 96M | -4M | 103M | 155M | 11M | 164M | 53M | 48M | 52M | 57M | 0 | 0 | -460M | -7M | -64M | 0 | 0 | 5M | -6M | -101M |
| Net Change in Cash | 405M | 50M | 1.24B | 532M | -953M | -1.38B | 2.66B | 666M | -9.65B | 8.68B | 222M | -1.54B | -1.29B | 1.29B | 860M | -699M | 427M | 1.77B | 541M | -52M | -590M | 375M | 936M | -1.07B | 948M | 145M | 177M | 98M | -28M | -677M | 2.32B |
| Free Cash Flow | 3.31B | 3.31B | 2.62B | 2.1B | 1.47B | 2.15B | 2.88B | 3.03B | 2.58B | 1.69B | 1.89B | 1.69B | 2.03B | 2.12B | 2.31B | 1.63B | 1.87B | 1.41B | 2.53B | 2.21B | 1.02B | 1.8B | 1.26B | 97M | 1.15B | 424M | 736M | 774M | -17M | 492M | 507M |
| FCF Margin % | 7.8% | 7.88% | 6.39% | 5.34% | 4.01% | 6.03% | 7.84% | 8.96% | 8.57% | 6.53% | 7.72% | 7.19% | 8.47% | 8.59% | 9.16% | 6.16% | 6.64% | 4.18% | 7.47% | 6.89% | 3.38% | 5.87% | 4.23% | 0.37% | 6.69% | 3.13% | 9.66% | 8.6% | -0.19% | 5.38% | 6.28% |
| FCF Growth % | 86.09% | 26.17% | 24.81% | 43.25% | -31.88% | -25.41% | -4.88% | 17.65% | 53% | -10.99% | 11.95% | -16.78% | -4.11% | -8.23% | 41.92% | -12.9% | 32.39% | -44.23% | 14.74% | 116.39% | -43.48% | 42.64% | 1203.09% | -91.57% | 171.46% | -42.39% | -4.91% | 4652.94% | -103.46% | -2.96% | -17.02% |
| FCF per Share | 23.19 | 23.00 | 17.79 | 13.82 | 9.42 | 13.37 | 17.21 | 17.84 | 14.77 | 9.60 | 10.49 | 8.83 | 9.58 | 9.06 | 9.11 | 5.78 | 6.20 | 4.36 | 7.56 | 6.22 | 2.84 | 4.96 | 3.46 | 0.24 | 5.03 | 2.46 | 5.19 | 5.54 | -0.12 | 3.61 | 3.98 |
| FCF Conversion (FCF/Net Income) | 0.72x | 1.14x | 1.05x | 1.88x | 0.59x | 0.51x | 1.35x | 1.91x | 1.19x | 1.30x | 1.28x | 1.09x | 1.25x | 1.27x | 1.33x | 1.00x | 1.19x | 1.27x | -2.54x | 1.61x | 1.14x | 1.88x | 1.79x | 0.92x | 26.39x | 1.91x | 1.66x | 2.58x | 1.26x | 1.79x | 3.00x |
| Interest Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Sentinel program execution risk
As reported in recent financial filings, Northrop Grumman’s operating cash flow to net income ratio has exhibited extreme volatility, swinging from a negative 1.89 in 2026Q1 to a positive 2.73 in 2025Q4, highlighting a significant disconnect between accounting earnings and actual cash generation capabilities.
The wide variance in the OCF/NI ratio suggests that headline net income is a poor proxy for the company's immediate liquidity, likely driven by the timing of milestone payments on large-scale defense contracts. Investors should monitor whether this divergence is a temporary byproduct of program accounting or a structural issue regarding the cash-conversion efficiency of the current backlog.
Based on the provided cash flow data, free cash flow has demonstrated a pattern of sharp quarterly contractions, including a negative $1.8 billion outflow in 2026Q1, which underscores the lumpy nature of cash inflows tied to the company's long-cycle government procurement and development programs.
The recurring negative FCF periods appear to coincide with heavy working capital requirements, suggesting that the company frequently funds its own growth before receiving government reimbursement. This trajectory warrants caution, as it implies that cash flow stability is highly sensitive to the timing of contract milestones rather than consistent operational performance.
According to quarterly cash flow statements, working capital changes have been the primary driver of cash flow variance, with a massive $3.1 billion outflow in 2026Q1 following a $1.5 billion inflow in 2025Q3, indicating significant sensitivity to project-based inventory and receivable cycles.
These dramatic swings suggest that the company’s cash position is heavily dependent on the timing of government payments relative to the procurement of long-lead materials. The inability to smooth these working capital cycles may indicate that the company is absorbing significant supply chain costs before reaching revenue recognition milestones.
As indicated by financial data, Northrop Grumman’s capital expenditure as a percentage of revenue peaked at 7.6% in 2024Q4, reflecting the substantial investment required to maintain specialized manufacturing facilities and secure infrastructure necessary for the B-21 and Sentinel programs.
The elevated capital intensity suggests that the company is in a sustained phase of asset-heavy investment, which may limit free cash flow margins in the near term. Analysts should evaluate whether these expenditures are primarily for maintenance or if they represent a strategic expansion of capacity that could drive future margin improvements.
Based on reported figures, the company has maintained consistent dividend payments and share repurchases despite significant quarterly cash flow volatility, with $333 million in dividends paid in 2026Q1 even as operating cash flow turned negative, suggesting a management priority on returning capital to shareholders.
This commitment to shareholder returns appears to be funded by balance sheet capacity rather than immediate operational cash flow, which may be sustainable in the short term but warrants scrutiny if cash flow remains pressured. Investors should consider whether this capital allocation strategy limits the company's flexibility to address potential cost overruns in its major defense programs.
Quick answers to the most common questions about buying NOC stock.
Northrop Grumman Corporation (NOC) generated $4.76B in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Northrop Grumman Corporation (NOC) generated $3.31B in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Northrop Grumman Corporation (NOC) spent $1.45B on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, Northrop Grumman Corporation (NOC) returned $1.29B to shareholders via cash dividends and spent $1.62B on share repurchases. This shows the company's commitment to returning capital to its equity investors.