Aerospace & Defense Industry Report – First Half 2025
Industry Trends
Budget and Procurement Shifts
US defense spending remains steady (~$892B proposal for FY 2026), but priorities are shifting: the Pentagon is cutting F‑35 procurements (~45–50% fewer jets) in favor of missiles, drones, and next-gen platforms like NGAD and collaborative combat aircraft.
NATO nations continue to ramp up their defense budgets, pledging 5% of GDP by 2035—a trend fueling European defense equities.
Technological Integration & AI
The Pentagon is accelerating partnerships with Silicon Valley and defense-tech outfits, awarding contracts (e.g., OpenAI’s $200 M AI deal), embedding tech execs into military roles, and focusing on autonomy and surveillance systems.
Rapid Growth in Drones & Missile Systems
Missile systems (e.g., Lockheed, RTX) and drones/UAS are top procurement priorities, and companies like AeroVironment are reporting record earnings—+40% YoY sales, backlog jumped from $400 M to $726 M.
Stockholm-based Unmanned tech is widely cited as part of a “War from Home” trend—low-risk, high-tech warfare.
Commercial Aerospace Recovery
In May 2025, U.S. durable goods orders spiked 16.4%, driven by a 230% jump in commercial aircraft orders (303 new orders, largely from Boeing).
Executives expect narrow- and wide-body aircraft deliveries in H1 2025 to match or exceed H1 2024 levels: 83% and 88% respectively.
M&A & Investment Landscape
Q1 saw strong M&A activity in A&D, with deal volume slightly higher YoY and significant strategic and PE interest in mission critical‑ tech, especially AI/digital integration.
Globally, while overall M&A volume dipped (~9%), A&D deal values rose, bucking broader market trends.
Market & Investment Trends
Defense-tech VC flourished: over 400 firms raised nearly $13 billion in H1 2025—but uncertain exit environments due to flat M&A multiples.
Equity-wise, RTX hit record highs backed by over $200 B in combined backlog (commercial + defense).
ETFs like Select STOXX Europe A&D (EUAD) climbed ~78% in 2025, propelled by European defense spending.
Mr. Calogero has deep experience in Supply Chain and Manufacturing Industries. Prior to FOCUS, he was the Vice President of Operations for McElroy Manufacturing, Inc., an OEM with revenues of $100M and 250 people. Under his leadership, he leveraged Lean Manufacturing and Advanced Manufacturing technologies to transform the operations of the company. He drove an increase of Gross Margin by 700 basis points, while improving On-Time Performance from 62% to 92%, reduced turnover by 60%, with world-class safety and quality.
As the COO of Coastal Sunbelt Produce, he was responsible for operations, supply chain management, street sales, and asset velocity for this Private Equity backed $300M, 500-person Food Manufacturing and Distribution firm, delivering a 100-basis point increase to EBITDA in the first year. He has also worked in the Aerospace sector, launching his career at Lockheed Martin and Boeing in Finance and oversaw $3B in helicopter and weapons systems contracts. He also led a consulting business in Michigan that transformed product development for Ford, General Motors, and several Tier 1 & 2 Automotive suppliers.
He also worked extensively in Management Consulting and Government Information Technology. He helped transform over 200 companies in Manufacturing, Distribution, Hospitality, Technology, Semiconductor, Life Sciences, and Hospitals/Healthcare. He founded a management consultancy, XSell Solutions, improving performance in Sales, Supply Chain, and Production. He also served as the President of Tefen USA. For this 100 person Global Management Strategy and Operations Consulting firm, he directed all activities within North America and the Far East. Customers included Schneider Electric, Massachusetts General Hospital, Baxter Healthcare, Abbott Laboratories, Applied Materials, Amgen, and Pfizer.
His career in Government IT included Senior VP of Sales and Strategy at Robbins-Gioia, a 600-person program management and business process outsourcing firm, with clients across the DOD and Federal Civilian Agencies. He also served as the Business Manager for Computer Sciences Corporation, leading systems integration programs for the Department of Interior and Department of Commerce.
With an MBA from The George Washington University and a BA from Loyola University Maryland, he is an accomplished presenter, including keynote presentations in Healthcare and National Manufacturing Week conferences, to name a few. Mr. Calogero is a Member of the Young Presidents’ Organization Gold Washington DC/Baltimore Chapter and past Chairman of the YPO DC/Baltimore Chapter.
Mr. Calogero holds FINRA Series 63 and Series 82 licenses.
