Rheinmetall Sees 70% Revenue Surge Amid European Military Spending Boom

Rheinmetall, Europe’s largest defense contractor, has reported a nearly 70% surge in second-quarter revenue to €3.29 billion from €1.95 billion a year earlier, driven by rising European military spending amid the Ukraine conflict. Operating profit more than doubled to €562 million, though net profit edged down to €124 million from €130 million due to one-time costs.

New orders skyrocketed to €11.37 billion from €1.98 billion, lifting the company’s order backlog to a record €80.47 billion. Despite this strong performance, Rheinmetall lowered its 2026 sales forecast to €13.7-14.2 billion, citing the cancellation of Germany’s €15.2 billion F126 frigate project in favor of TKMS’s MEKO A-200 warships.

"Demand remains strong, and we continue to succeed in securing major orders both at home and abroad," said CEO Armin Papperger. Germany has become Ukraine’s second-largest arms supplier after the US and has significantly expanded its long-term defense commitments, aiming to increase spending to 3.5% of GDP by 2029. This buildup is driven by the perceived threat of Russian aggression, which Moscow dismisses as baseless.

The German economy, however, faces challenges from a cost-of-living crisis and high energy prices, exacerbated by the phaseout of Russian energy supplies.