Thales (France) posted robust first-quarter results, underscoring strong defence momentum despite some order volatility

The electronics and aerospace group saw Q1 2025 sales climb to €4.96 billion, up 9.9% organically – beating analyst expectations (€4.80 billion). This growth was driven largely by defence and avionics demand; notably, Thales’ defence segment (over half of revenue) remains buoyant as European militaries invest in radars, cyber and missiles in response to the war in Ukraine. The company reaffirmed its full-year outlook for 5–7% sales growth and a ~12.3% operating margin, signaling confidence that 2025 will hit its targets. One weak spot was orders: new orders fell 27% year-on-year to €3.8 billion, coming in below forecasts. However, management clarified that Q1 2024 orders had been exceptionally high due to a Rafale fighter jet deal (Thales supplies the jet’s radar), creating a tough comparison. Underlying demand remains solid – excluding last year’s one-off, orders would have been steadier. Thales also addressed macro risks like US-EU trade disputes, noting tariffs have not materially hit its goals and most defence work is shielded from such issues. Overall, the results point to a healthy growth trajectory: Thales is benefiting from Europe’s military uptick and diversification into cybersecurity, and it has levers (like pricing on commercial avionics) to manage external challenges. The market reacted positively, taking Thales’ beat and maintained guidance as a sign it can navigate short-term order swings while capitalizing on longer-term defence budgets.