Fourth-quarter earnings aren’t in yet, but even with the U.S. government’s longest recorded shutdown and the lack of a final spending plan for the current fiscal year, defense companies are generally looking at a solid wrapup to a turbulent but fruitful year.
Several major contractors expect to finish with increased revenues over last year, while newer companies have banked contract wins and momentum for the year ahead. The Pentagon’s redoubled efforts to buy weapons and tech faster—along with rising defense spending overseas—have buoyed the sector even as it worked to adapt to unpredictable U.S. defense funding, rapidly changing policies at the White House, and more.
There’s no better example of defense tech’s marquee year, and the bumpy ride along the way, than rocket maker Firefly Aerospace. In the two months after the startup went public with a $9.8 billion valuation in August, a booster explosion trimmed 20 percent off the stock, the company won a key $10 million NASA contract, and it settled a $855 million deal to buy SciTec, which holds Space Force missile tracking and warning contracts.
“The planets are aligning between the Pentagon and NASA,” Jason Kim, Firefly’s CEO, told Defense One. “You’re seeing funds go towards this national, important mission to the Moon,” where President Donald Trump has vowed to send U.S. astronauts by 2028. “Everybody is looking towards keeping America first, keeping America at the forefront, winning that Space Race.”
Firefly is planning to land its Blue Ghost lunar lander for the second time next year on the far side of the Moon—where China is already exploring. The company also wants to increase its capacity to four lunar landings a year.
Kim also said the company aims to compete for work under the Trump administration’s massive Golden Dome initiative: rocket launchers, space-based orbiters, and sensors and data.
“It’s going to take all of us” in the space industry, he said. “The pie is going to grow, as we’re seeing with Golden Dome and other opportunities in national security space. And there’s going to be opportunities for all these companies—new space, non-traditionals, traditional space, traditional defense—all working together.”
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Back to “battleships.” President Donald Trump announced plans to build up to 25 giant surface combatants battleships on Monday during an event in Palm Beach, Fla. To start, the administration plans to engage some of the country’s military shipbuilders to get started on the first two “almost immediately,” Trump said, including on what is being called the USS Defiant—yes, like the Star Trek starship or, possibly, the Navy tug.
Background: The announcement comes after the Navy unveiled plans for a new frigate after cancelling the existing program. The White House made it known earlier this year that shipbuilding was a key priority.
But there are lingering questions as it’s unclear how production and, especially, workforce capacity will meet existing and new demands. Building battleships could not only prove to be very costly and require tremendous manpower, but large targets.
Autonomy, autonomy everywhere. Naval autonomy startup HavocAI started the year wanting to build a 100-foot autonomous vessel. It did. Now, they aim to put their autonomy software on drones on more aerial and ground vehicles and have them work together.
Earlier this month, the company tested their software for Ukrainian defense officials, involving robot boats and small aerial drones that only used cameras as sensors, Paul Lwin, the company’s CEO told Defense One.
“Once they found the target boat, they sent the information to UAVs, who came in to engage the target boat. Now, obviously, this is all staged…But what we’re trying to show them was the technology and the process existed,” Lwin said.
“That UAV was running our software,” he said. Next year, “we’re going to put our software on more UAVs, and then, even some ground vehicles in the future [to be] agnostic to the domain,” in addition to building bigger boats.
Next-generation collaboration. For help with the Army’s near $30 million Next Generation Command and Control prototype contract, Lockheed Martin pulled in Rune Technologies and other companies to handle AI-powered logistics software.
Logistics is “part of a broader ecosystem” that “interplays between intelligence systems and fire systems and other command and control systems and bi directional passing of data through an integrated data layer. We need to be able to plug and play those things,” David Tuttle, Rune’s CEO, told Defense One.
The Army’s 25th Infantry Division in Hawaii is one of the units testing out the new kit. The next big test is expected to take place at the end of January, Tuttle said.
“We just had the kickoff. We had a whole team out there in Hawaii last week with our partners…And I think everyone’s all in like we’re ready to get to work and ready to move fast. I think that’s what the Army wants to see.”
What I’m curious about: Next to buying 1 million small drones, next generation command and control systems are a major Army priority. The service has been trying to figure out what combination of devices soldiers can use now while developing what future warfare would require. It’s a complex process that involves a reliable network, data security, storage, and tools that make sense of the deluge of battle information. As experiments continue, it’ll be interesting to see how the final program takes shape—or changes.
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