Thales: Defence orders surge as Iran war drives military spending

The French company saw a significant jump in its defence orders, reaching €2.24bn in the first quarter, driven by several large contracts and rising geopolitical tensions.

French defence and technology company Thales reported that orders for its defence business increased by 75% in the first quarter of 2026, rising to €2.24 billion from €1.3 billion a year earlier.

The company also announced a nearly 10% increase in total sales for the first three months of 2026, reaching €5.31 billion and surpassing expectations.

"As recent events, particularly in the Middle East, reinforce the relevance of its solutions, especially in the fields of air surveillance and air defence as well as underwater mine warfare, Thales continues to benefit from sustained demand across its entire portfolio," the company said in a statement.

Total orders for the first quarter of 2026 amounted to €4.65 billion, up 27% from the same period in 2025, primarily driven by several large orders from European countries.

The company recorded seven orders exceeding €100 million each, five of which were defence-related. This compares with one such order during the same period in 2025.

Thales' defence-related large orders in the first quarter included a contract to modernise equipment supporting France’s nuclear deterrence, as well as orders from the Danish Ministry of Defence and the Qatar Emiri Air Force, according to the company's statement.

Sales in the defence segment reached €3 billion, representing a 14.3% year-on-year increase.

Thales' other business segments also grew, with aerospace sales rising by 5.9% and cyber & digital sales increasing by 2%.

“Amid continued geopolitical uncertainty, Thales’ solutions, centred on security, sovereignty, and innovation, clearly demonstrate their relevance. Benefiting from unique visibility across our activities, we confirm all our annual financial targets for 2026,” said Patrice Caine, Chairman & Chief Executive Officer, in a statement.

Thales expects sales growth of between 6% and 7% in 2026, targeting €23.3 billion to €23.6 billion, with profit margins estimated between 12.6% and 12.8%.

Thales' share price was down 2.7% in morning trading in Europe.