QinetiQ reports revenue rise in FY24 despite “difficult” US market conditions

UK-based defence technology company QinetiQ reported a 21% and 20% increase in revenue and operating profit respectively in its preliminary results for the full year to end-Q1 2024, despite what it termed “difficult market conditions” in the United States.

Revealing the figures on 23 May 2024, QinetiQ stated that results were “strong” for FY24, despite being “against the background of difficult market conditions in the US”, with “excellent growth” in Europe, Middle East, and Africa (EMEA) services at 19% organic revenue growth and a stable margin at 11.5%.

The company’s outlook was described as having “strong momentum, a healthy order book and increased visibility, with 64% revenue under contract”, in its official release.

In addition, QinetiQ said that it expected FY25 to deliver high single-digit organic revenue growth, compared to FY24, at a stable operating profit margin. The company was on track to deliver around £2.4bn ($3.5bn) organic revenue at 12% margin by FY27, it reported.

Steve Wadey, Group CEO, said: ““I am pleased with our strong Group financial results for FY24, delivered against the background of difficult market conditions in the US.

“We enter this year with strong momentum and increasing spending in our major markets, which gives us confidence to increase our guidance for FY25 and underpins our FY27 outlook of c.£2.4bn organic revenue at c.12% margin.”

DragonFire among QinetiQ’s “strategic achievements” in FY24

QinetiQ also reported three “strategic achievements” during the reporting process, including its participation in Nato’s Exercise Formidable Shield, with the UK Hebrides range hosting dozens of platforms and thousands of personnel over a three-week period to test naval and missile defences.

In addition, the company continued its work under the Joint Adversarial Training and Testing Services (JATTS) for Australia to support training of Australian Defence Force personnel with red air aircraft and aerial targets. QinetiQ reported an in-year increase in aircraft flying hours of 20% and 90% rise in aerial target missions than originally planned.

Other achievements included its role in the ongoing development of the DragonFire laser directed energy weapon (LDEW) system. Subsequently, the UK Ministry of Defence announced the DragonFire LDEW will be installed on Royal Navy warships for the first time from 2027, sooner than previously envisaged.

In 2017, the UK Government committed around £30m to industry to help develop an LDEW capability demonstrator, which later transformed into DragonFire. Since then, around £100m has been committed to the programme.

In late-2023, the DragonFire LDEW underwent a series of operational trials at QinetiQ’s facilities in the Hebrides, culminating in the shoot-down of an uncrewed aerial target drone.