Defence and space: players, trends, rules and cases
Who the players are by region, the spending surge of 2024 to 2026, export rules, satellite broadband and Earth observation, and typical case prompts.
Industry brief, with a one-minute summary: Defence and spaceFirm processes and online tests change from year to year and differ by office. Use this to prepare, and confirm the exact current steps on the firm's own careers page.
Key takeaways
- Defence and space cases turn on government decisions: budgets, export rules and who is allowed to buy from whom.
- Common traps: Treating backlog as cash: it turns into revenue only as work is delivered, and framework ceilings may never be fully ordered.
- World military spending kept rising.
- Europe is rearming with EU money too.
Key idea
Defence and space cases turn on government decisions: budgets, export rules and who is allowed to buy from whom. Treat them as business cases with a political customer, and stay neutral about the politics.
| Region | Defence | Space |
|---|---|---|
| United States | Lockheed Martin, RTX, Northrop Grumman, General Dynamics, Boeing, L3Harris; newer software-led firms such as Anduril and Palantir | SpaceX (launch and Starlink), Blue Origin, Rocket Lab, Planet Labs (Earth observation), Amazon Leo (formerly Project Kuiper) |
| Europe | BAE Systems (UK), Rheinmetall (Germany), Thales and Safran (France), Leonardo (Italy), Saab (Sweden), Airbus, KNDS, MBDA | Airbus and Thales Alenia Space (satellites), Arianespace (launch), Eutelsat (which runs the OneWeb constellation) and SES (operators) |
| Middle East | EDGE Group (UAE), SAMI (Saudi Arabia); Israeli firms such as Elbit Systems, IAI and Rafael | Space42 (UAE), Arabsat (Saudi Arabia), the UAE and Saudi space agencies |
| India | Hindustan Aeronautics (HAL), Bharat Electronics (BEL), Bharat Dynamics; private firms such as Larsen & Toubro, Tata Advanced Systems, Bharat Forge | ISRO and its commercial arm NSIL; private launch start-ups Skyroot and Agnikul; IN-SPACe authorises private space firms |
| Southeast Asia | ST Engineering (Singapore); state firms such as PT Pindad and PT PAL (Indonesia) | Satellite operators and ground firms; Singapore as a regional space hub |
So-what
SIPRI estimates that the five biggest military spenders in 2025 were the United States, China, Russia, Germany and India, together about 58 percent of world military spending.
Trends from 2024 to 2026 (checked 30 September 2026)
- World military spending kept rising. SIPRI estimates it at about USD 2,887 billion in 2025, up 2.9 percent in real terms, the 11th rise in a row, or about 2.5 percent of world GDP, the highest share since 2009. Spending in Europe rose about 14 percent to about USD 864 billion, while US spending fell about 7.5 percent to about USD 954 billion as aid to Ukraine dropped (SIPRI).
- NATO set a new target. At The Hague in June 2025, allies agreed to spend 5 percent of GDP a year by 2035: at least 3.5 percent on core defence and up to 1.5 percent on related needs such as infrastructure protection, resilience and the defence industrial base (NATO). NATO reports that in 2025, for the first time, every ally met the older 2 percent target, and European allies and Canada raised spending by about 20 percent.
- Europe is rearming with EU money too. The ReArm Europe Plan, or Readiness 2030, aims to unlock up to about EUR 800 billion of extra defence spending, including SAFE, EUR 150 billion of EU loans for joint purchases, adopted in May 2025 (European Commission; Council of the EU).
- Backlogs hit records. Rheinmetall, BAE Systems and Lockheed Martin all reported record or near-record backlogs in 2026 (company reports). The challenge moved from winning orders to building fast enough.
- India spends and exports more. India's Ministry of Defence received about INR 7.85 lakh crore for 2026 to 27, up about 15 percent on the previous budget, with about INR 2.19 lakh crore for capital purchases (MP-IDSA analysis of budget documents). Defence exports reached a record INR 38,424 crore in 2025 to 26, up about 63 percent (PIB).
- Satellite broadband took off. SpaceX's IPO filing (it listed on Nasdaq in June 2026) showed Starlink revenue of about USD 11.4 billion in 2025, about 61 percent of SpaceX's USD 18.7 billion, and about 10.3 million subscribers by March 2026 (as reported from the filing). Amazon renamed Project Kuiper as Amazon Leo and began a preview for business customers; the EU is funding IRIS2, a secure constellation of around 290 satellites costing about EUR 10.6 billion, with service planned from about 2030.
- Launch records, counted differently. The Satellite Industry Association counts 325 launches in 2025, 296 of them bought commercially, carrying a record 4,434 satellites; other trackers count about 320 to 330 orbital launch attempts, depending on what they include. SpaceX flew about 165 Falcon 9 missions, about half of the world total.
- Earth observation is becoming a defence business. Planet Labs reported record revenue of about USD 308 million for its year to January 2026 and a backlog above USD 900 million, helped by satellite service deals with governments such as Sweden (Planet Labs).
Weapons and many military parts need an export licence from the seller's government. In the US, the International Traffic in Arms Regulations (ITAR) control defence items and data, and a single US part inside a foreign product can bring the whole product under US rules. EU countries judge licences against a common set of criteria (Council Common Position 2008/944/CFSP), but each country decides for itself. Many buyers require local production or offsets. Satellites need radio frequencies and orbital slots coordinated through the International Telecommunication Union, and launches need national licences. Rules on dual-use goods (items with both civil and military uses, such as some chips and drones) are tightening in many countries.
| Case prompt | Structure hint | First driver to check |
|---|---|---|
| An ammunition maker must triple output in two years. How? | Bottleneck by input: energetics, shell bodies, fuzes, filling lines, skilled workers, permits; make or buy; partners | The slowest input and how long it takes to add capacity |
| Should we bid for this fixed-price programme? | Cost estimate and its uncertainty, contract terms, penalties, follow-on sustainment, export potential | How much of the cost is already known and locked in with suppliers |
| A Gulf government wants a local defence industry. Where to start? | Demand pipeline, technology partners, local content rules, skills, which subsystems to make first | Which purchases are large and steady enough to justify local production |
| Should a telecom operator in Southeast Asia partner with a satellite broadband provider? | Coverage gaps, customer segments, price versus fibre and mobile, regulation and landing rights | Where customers have no good ground-based option |
| Is an Earth observation start-up worth investing in? | Customers (government versus commercial), backlog, revenue per satellite, replacement capex, analytics | Share of revenue from multi-year government contracts |
So-what
In defence, the customer and the rules set the market. In space, check who pays: governments, businesses or households.
Treating backlog as cash: it turns into revenue only as work is delivered, and framework ceilings may never be fully ordered. Assuming a bigger budget means immediate orders: procurement takes years. Forgetting export licences, which can block a sale regardless of price. Ignoring sustainment, often the most profitable part of a programme. In space, assuming launch is the main business, when most revenue is in services and ground equipment. Taking a side on politics instead of analysing the business.
Lockheed Martin reported a record backlog of about USD 230 billion and second-quarter 2026 sales of about USD 20.1 billion. If every quarter were like the second, how many years of sales would the backlog cover? Round to one decimal place.
Related modules: "Industrial manufacturing and aerospace" covers civil aircraft and industrial equipment; "Semiconductors, electronics, and data centers" covers chips, a key input; "Telecom" covers mobile and fibre networks that satellite broadband competes with; "Public sector" covers how governments budget and buy. Case types that fit: "Capacity, supply chain, and footprint" and "Investment and capital project decisions".
What is the NATO spending target agreed at The Hague in 2025?
A European defence firm wants to sell a system containing a US-made component to a country in Asia. What should it check first?
Sources for this lesson (23)
- SIPRI: global military spending surges in 2025 (press release, April 2026)
- SIPRI Fact Sheet: Trends in World Military Expenditure, 2025 (April 2026)
- NATO: The Hague Summit Declaration, 25 June 2025 (official text)
- NATO: Secretary General's Annual Report 2025 shows significant increase in defence investment from Europe and Canada (March 2026, official)
- European Commission: questions and answers on the ReArm Europe Plan/Readiness 2030 (official)
- Council of the EU: SAFE, Council adopts EUR 150 billion boost for joint procurement on European security and defence (27 May 2025, official)
- Rheinmetall: half-yearly financial report H1 2026 (August 2026, official)
- Lockheed Martin: second quarter 2026 financial results (July 2026, official)
- BAE Systems: 2026 half year results (July 2026, official announcement)
- MP-IDSA (India's government-funded defence studies institute): Ministry of Defence 2026 to 27 budget estimates, an analysis (February 2026)
- Press Information Bureau, Government of India: defence exports reach a record INR 38,424 crore in 2025 to 26 (official)
- US Department of State, Directorate of Defense Trade Controls: International Traffic in Arms Regulations (ITAR) (official)
- EUR-Lex: Council Common Position 2008/944/CFSP on exports of military technology and equipment (official)
- Satellite Industry Association: 29th annual State of the Satellite Industry Report (May 2026, official summary)
- Via Satellite: SpaceX's IPO filing gives first look into the company's financials (May 2026, reporting the SEC filing)
- Business Today: SpaceX shares make Nasdaq debut after its IPO (12 June 2026)
- Space.com: SpaceX shatters its launch record again with 165 orbital flights in 2025
- AIAA: SpaceX and China power record-breaking year for orbital launches (January 2026, citing SpaceNews counts)
- Spaceflight Now: Falcon 9 booster B1067 lands after a record 37th flight (August 2026)
- European Spaceflight: Europe allocates EUR 10.6 billion to build and launch the IRIS2 constellation (December 2024)
- PCWorld: Amazon's satellite internet project Kuiper gets a new name, Amazon Leo (November 2025)
- Planet Labs: financial results for the fourth quarter and full fiscal year 2026 (March 2026, official)
- Recognized public explanations of case-interview concepts and frameworks
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