Rolls-Royce reports £1 billion profit rise after major defence orders

Rolls-Royce said underlying operating profit rose to £3.5 billion in 2025, helped by large defence engine contracts and stronger power revenues, and it raised its profit outlook to between £4.9 billion and £5.2 billion by 2028.

Rolls-Royce reported a notable rise in annual profit and upgraded its outlook after securing sizeable defence engine contracts and seeing stronger demand for power equipment used by data centres. The company said underlying operating profit for 2025 was £3.5 billion, up 40% from the prior year, and underlying revenues exceeded £20 billion. Management pointed to progress from a multi-year transformation and cost savings since 2022. Chief executive Tufan Erginbilgic said the business had navigated supply and tariff challenges while building capabilities for further growth. Key facts: - Underlying operating profit for 2025 was £3.5 billion, up from £2.5 billion in 2024. - Underlying revenues surpassed £20 billion, an increase of about a tenth year-on-year. - Rolls-Royce secured major defence orders in 2025, including contracts worth more than £1.5 billion with the UK's Ministry of Defence and the US's Department of War for EJ200 and AE 2100 engines. - New orders for Eurofighter engines from Italy, Germany and Spain and export agreements with Turkey were reported, which the company said will drive production into the 2030s. - Revenues from power generation — supported by data centre demand — rose by more than a third, according to the company. Summary: The company upgraded its mid-term profit guidance after the stronger 2025 performance, now expecting underlying operating profits of £4.9–5.2 billion by 2028, up from a prior range of £3.6–3.9 billion. Management said 2026 guidance implies the prior mid-term profit range may be reached two years earlier than planned, and it described continued growth opportunities from existing and new business areas. Undetermined at this time.