EarningsQ4 2025 Earnings Report

Rolls-Royce Holdings (RRN) Q4 2025 Earnings Report

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Previous Report: Q2 2025

Next Report: Q2 2026

MX:RRN Q4 2025 EPS Results

Actual EPS$3.31

Consensus EPS$3.29

Beat/MissBeat by +$0.02

One Year Ago EPS$2.75

MX:RRN Q4 2025 Revenue Results

Actual Revenue$275.18B

Expected Revenue$254.55B

Beat/MissBeat by +$20.63B

YoY Revenue Growth+16.61%

Earnings Announcement Details

QuarterQ4 2025

Date02/26/2026

TimeBefore Open

Conference CallThursday, February 26, 2026

MX:RRN Upcoming Earnings

Rolls-Royce Holdings's next earnings date is estimated for February 25, 2027, based on past reporting schedules.

Q4 2025 Earnings Call Audio

MX:RRN Q4 2025 Earnings Call

0:00 / 0:00

Q4 2025 Earnings Slide Deck

Q4 2025 Earnings Call Summary

Q4 2025

Earnings Call Date:Feb 26, 2026|

% Change Since:

Earnings Call Sentiment|Positive

The call presented a strong and broad operational and financial recovery with upgraded guidance, materially higher margins, significant free cash flow generation and a major shareholder return program. Civil Aerospace and Power Systems delivered standout profit and cash improvements, operational initiatives (time on wing, AI) are already driving benefits, and long-term growth opportunities (SMR, UltraFan, data center engines) were highlighted. Key near-term challenges are persistent supply-chain and product-cost inflation, some non‑recurring contractual gains in 2025, and timing of LTSA cash realization (largely post‑2028). On balance, the positive trends — upgraded targets, robust cash generation, balance sheet repair and a sizeable buyback/dividend program — outweigh the stated headwinds.

Company Guidance

Rolls‑Royce guided 2026 underlying operating profit of £4.0–4.2bn and free cash flow of £3.6–3.8bn, and upgraded its 2028 mid‑term targets to operating profit £4.9–5.2bn, operating margin 18–20%, free cash flow £5.0–5.3bn and return on capital 23–26%; division mid‑term margins were set at Civil Aerospace 21–23%, Power Systems 18–20% and Defence 14–16%. For 2026 the company expects net LTSA balance growth broadly similar to 2025, large‑engine flying hours of c.115–120% of 2019 (rising to c.130–140% by mid‑term), shop visits of 1,480–1,550 in 2026 peaking then falling to 1,300–1,400 by 2028, and mid‑term net LTSA balance growth of c.£0.8–1.2bn; it also flagged a 2026 supply‑chain cash drag of c.£150–200m that will be gone by the mid‑term and assumes a blended FX of $1.33/£ (vs $1.44 in 2025). The plan anticipates mid‑term investment averaging above depreciation & amortisation, working‑capital releases with 2028 broadly neutral, overhedge costs cleared by end‑2026, higher cash tax as profits grow, a £7–9bn 2026–28 buyback program (c.£2.5bn in 2026 including £200m already executed) alongside growing dividends (2025 final 5p, full year 9.5p, 32% payout), and sees contract margins ~2pp and LTSA income‑statement margins ~8pp higher than prior guidance, all supporting sustained margin and cash‑flow expansion.

Strong Group Financial Performance

Group revenue grew 14% to GBP 20.0bn; underlying operating profit GBP 3.5bn (5x vs 2022); operating margin 17.3% (more than tripled vs 2022); free cash flow GBP 3.3bn (up >GBP 800m YoY); return on capital ~18.9% (≈4x vs 2022).

Upgraded Guidance and Ambitious Midterm Targets

2026 guidance: underlying operating profit GBP 4.0–4.2bn and free cash flow GBP 3.6–3.8bn. Upgraded 2028 midterm targets: operating profit GBP 4.9–5.2bn, operating margin 18–20%, free cash flow GBP 5.0–5.3bn, return on capital 23–26%.

Major Shareholder Returns Program

Board recommended final dividend 5p (full year 9.5p, +60% YoY, 32% payout ratio). Announced first multiyear buyback program GBP 7–9bn (2026–2028), with GBP 2.5bn planned in 2026 (GBP 200m tranche already completed); intends to return >75% of free cash flow to shareholders 2026–28.

Civil Aerospace Outperformance and Aftermarket Momentum

Civil operating profit GBP 2.1bn (+41% YoY) with margin 20.5% (+3.9pp); revenues GBP 10.4bn (+15%); service revenue +21%; large engine revenue +30%; total shop visits 1,440 (+10%); significant LTSA/commercial improvements (net contractual margin improvements GBP 392m, gross GBP 553m).

Power Systems: Rapid Growth and Profitability

Power Systems operating profit GBP 852m (+60% YoY) and margin 17.4% (+4.5pp); revenue GBP 4.9bn (+19%); Power Generation revenue +30% (data center +35%); order intake GBP 6.1bn (+21%); battery storage achieved breakeven.

Balance Sheet Strength and Cash Discipline

Net cash position GBP 1.9bn (≈GBP 1.5bn improvement YoY); working capital released >GBP 400m; gross procurement savings GBP 1.2bn and efficiency/simplification benefits GBP 600m since 2022; credit ratings upgraded to strong investment grade.

Operational Improvements and Digital/AI Adoption

Time-on-wing target >100% durability with >50% already delivered; XWB-84 improvements deliver >1% fuel burn benefit and 44% reduction in XWB-84 shop visit costs already achieved (target to halve by midterm). Launched AiRR (AI platform); first EASA-approved AI agent reduced technical variance effort by ~75%.

Long‑term Growth Platforms: SMR, UltraFan and Series 4000

SMR business targeted to be cash generative by 2030 with ambition to commission 2 SMRs/year by mid-2030s and 8/year at maturity (TAM >400 SMRs by 2050). UltraFan/narrow-body demonstrator progressing (ground test target by 2028); Series 4000 for data centers targeted for 2028 with ~20% higher power density.

MX:RRN Earnings History

Report Date	Fiscal Quarter	Forecast / EPS	Last Year's EPS	EPS YoY Change
Feb 25, 2027	2026 (Q4)	5.00 / -	3.311	―
Jul 30, 2026	2026 (Q2)	4.18 / 5.19	3.687	40.76% (+1.50)
Feb 26, 2026	2025 (Q4)	3.29 / 3.31	2.748	20.51% (+0.56)
Jul 31, 2025	2025 (Q2)	2.25 / 3.69	2.114	74.44% (+1.57)
Feb 27, 2025	2024 (Q4)	2.28 / 2.75	2.09	31.46% (+0.66)
Aug 01, 2024	2024 (Q2)	1.36 / 2.11	0.47	350.00% (+1.64)
Feb 22, 2024	2023 (Q4)	0.82 / 2.09	-0.211	1088.89% (+2.30)
Aug 03, 2023	2023 (Q2)	0.52 / 0.47	-0.517	190.91% (+0.99)
Feb 23, 2023	2022 (Q4)	-0.21 / -0.21	-0.376	43.75% (+0.16)
Aug 04, 2022	2022 (Q2)	-0.09 / -0.52	0.423	-222.22% (-0.94)

The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.

Beat

Missed