German defence manufacturer Rheinmetall AG reported strong financial growth in 2025, but its shares fell after the company’s results failed to meet high investor expectations.
The Düsseldorf-based company said sales rose 29% to €9.9 billion in 2025, while operating profit increased 33% to €1.84 billion, marking a record performance for the defence group.
Despite the strong results, Rheinmetall shares dropped more than 7% in Frankfurt trading after the earnings announcement.
The company also proposed a dividend of €11.50 per share, up from €8.10 the previous year.
Rheinmetall said rising defence spending across Europe has significantly increased demand for its military equipment, including missiles, ammunition and drones.
The company’s order backlog reached €63.8 billion, compared with €46.9 billion a year earlier. Rheinmetall expects this figure could grow to around €135 billion by the end of 2026.
For the current year, the defence group forecasts sales growth of 40% to 45%, with projected revenue between €14 billion and €14.5 billion.
Company executives said global security tensions, including the war in Ukraine and instability in the Middle East, are driving increased defence spending among European governments.
Business with the German armed forces accounted for about 38% of Rheinmetall’s total sales, while international markets represented the remaining 62%.
However, some analysts have expressed concerns about whether the company can expand production quickly enough to fulfil its growing order backlog.
Rheinmetall Chief Executive Armin Papperger said the company is well positioned to respond to increasing defence demand.
“The world is changing rapidly, and Rheinmetall is well prepared,” Papperger said.
