Defense Contractors Stocks Q2 Earnings: Mercury Systems (NASDAQ:MRCY) Best of the Bunch

September 28, 2025 at 23:33 PM EDT

MRCY Cover Image

As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the defense contractors industry, including Mercury Systems (NASDAQ: MRCY) and its peers.

Defense contractors typically require technical expertise and government clearance. Companies in this sector can also enjoy long-term contracts with government bodies, leading to more predictable revenues. Combined, these factors create high barriers to entry and can lead to limited competition. Lately, geopolitical tensions–whether it be Russia’s invasion of Ukraine or China’s aggression towards Taiwan–highlight the need for defense spending. On the other hand, demand for these products can ebb and flow with defense budgets and even who is president, as different administrations can have vastly different ideas of how to allocate federal funds.

The 14 defense contractors stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 3.3% while next quarter’s revenue guidance was in line.

Luckily, defense contractors stocks have performed well with share prices up 14.5% on average since the latest earnings results.

Best Q2: Mercury Systems (NASDAQ: MRCY)

Founded in 1981, Mercury Systems (NASDAQ: MRCY) specializes in providing processing subsystems and components for primarily defense applications.

Mercury Systems reported revenues of $273.1 million, up 9.9% year on year. This print exceeded analysts’ expectations by 11.9%. Overall, it was an incredible quarter for the company with a solid beat of analysts’ organic revenue and EPS estimates.

“We delivered very strong results in the fourth quarter that were once again in line with or ahead of our expectations, resulting in solid year-over-year growth in backlog, revenue, net income, adjusted EBITDA, and free cash flow for our full fiscal year 2025,” said Bill Ballhaus, Mercury’s Chairman and CEO.

Interestingly, the stock is up 43.8% since reporting and currently trades at $77.25.

Is now the time to buy Mercury Systems? Access our full analysis of the earnings results here, it’s free.

BWX (NYSE: BWXT)

Contributing components and materials to the famous Manhattan Project in the 1940s, BWX (NYSE: BWXT) is a manufacturer and service provider of nuclear components and fuel for government and commercial industries.

BWX reported revenues of $764 million, up 12.1% year on year, outperforming analysts’ expectations by 7.2%. The business had a stunning quarter with a beat of analysts’ EPS and EBITDA estimates.

BWX scored the highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 17.6% since reporting. It currently trades at $181.67.

Is now the time to buy BWX? Access our full analysis of the earnings results here, it’s free.

Weakest Q2: Lockheed Martin (NYSE: LMT)

Headquartered in Maryland, Famous for the F-35 aircraft, Lockheed Martin (NYSE: LMT) specializes in defense, space, homeland security, and information technology products.

Lockheed Martin reported revenues of $18.16 billion, flat year on year, falling short of analysts’ expectations by 2.3%. It was a softer quarter as it posted full-year EPS guidance missing analysts’ expectations.

Interestingly, the stock is up 5.7% since the results and currently trades at $487.85.

Read our full analysis of Lockheed Martin’s results here.

RTX (NYSE: RTX)

Originally focused on refrigeration technology, Raytheon (NSYE:RTX) provides a a variety of products and services to the aerospace and defense industries.

RTX reported revenues of $21.58 billion, up 9% year on year. This number surpassed analysts’ expectations by 4.4%. Overall, it was an exceptional quarter as it also put up an impressive beat of analysts’ organic revenue estimates and a solid beat of analysts’ EBITDA estimates.

The stock is up 7.7% since reporting and currently trades at $163.35.

Read our full, actionable report on RTX here, it’s free.

CACI (NYSE: CACI)

Founded to commercialize SIMSCRIPT, CACI International (NYSE: CACI) offers defense, intelligence, and IT solutions to support national security and government transformation efforts.

CACI reported revenues of $2.30 billion, up 13% year on year. This result topped analysts’ expectations by 0.5%. Zooming out, it was a mixed quarter as it also logged a beat of analysts’ EPS estimates but a significant miss of analysts’ backlog estimates.

The stock is up 1.9% since reporting and currently trades at $485.59.

Read our full, actionable report on CACI here, it’s free.

Market Update

The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.

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Symbol

Price

Change (%)

AMZN

217.00

-5.03 (-2.27%)

AAPL

255.97

-6.80 (-2.59%)

AMD

225.89

-12.14 (-5.10%)

BAC

50.58

-0.94 (-1.82%)

GOOG

251.03

-0.31 (-0.13%)

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