Rheinmetall's Q1 revenue grows 8% but misses analyst targets amid expansion plans
Rheinmetall reported first-quarter revenue of €1.94 billion, marking an 8% increase from last year. Despite this growth, the figure fell short of analyst expectations by €2.27 billion. Investors reacted by pushing the company’s shares down over 2% after the announcement.
The defence group also revealed plans to expand its missile production in partnership with Dutch firm Destinus. A new cruise missile, the Destinus Ruta Block 2, is set to enter production by late 2026 or early 2027, with a range exceeding 700 kilometres. Rheinmetall’s operating earnings rose 17% to €224 million, though this too missed forecasts of €262 million. The company maintained its full-year outlook, projecting revenue between €14 billion and €14.5 billion for 2026, with operating margins holding steady at around 19%.
A significant boost came from Rheinmetall’s order backlog, which surged 31% to €73 billion. This increase now includes Naval Systems for the first time, reflecting the company’s push into maritime defence. Management expects large-volume contracts in naval systems and military vehicles to drive stronger performance in the second quarter.
On expansion, Rheinmetall submitted a preliminary bid for German Naval Yards Kiel and is assessing the purchase of part of Romania’s Mangalia shipyard. Meanwhile, discussions on missile collaboration with Raytheon are advancing, though talks with Lockheed Martin remain slow.
The Destinus Ruta Block 2 missile, designed to target critical infrastructure, will be produced jointly with Destinus. This project aligns with Rheinmetall’s strategy to strengthen its position in high-precision, long-range weaponry. Rheinmetall’s first-quarter results showed growth but disappointed market expectations. The company’s focus now shifts to securing large contracts and advancing missile production with Destinus. With a record order backlog and ongoing expansion plans, the defence group aims to strengthen its market position in the coming quarters.
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