The Defence Stock Glossary.
Plain-language definitions for the procurement, capability and market terms used across Defense Presswire coverage.
Procurement & contracts
- DoD
- U.S. Department of Defense — the largest single buyer of defence goods and services worldwide.
- Prime contractor
- A lead company holding a major government contract, often coordinating a chain of subcontractors.
- IDIQ
- Indefinite Delivery / Indefinite Quantity — a contract vehicle allowing flexible ordering of goods or services over a set term.
- Other Transaction (OT)
- A flexible agreement, frequently used for prototypes and new technology, that sits outside traditional procurement rules.
- FAR
- Federal Acquisition Regulation — the primary set of rules governing U.S. federal procurement.
- Cost-plus contract
- A contract that reimburses incurred costs plus a fee; cost risk sits largely with the government.
- Fixed-price contract
- A contract with a set price; cost-overrun risk sits largely with the contractor.
- Backlog
- The value of contracted work not yet completed; a forward indicator of revenue.
- Book-to-bill
- Orders received divided by revenue billed in a period; above 1.0 signals growing demand.
- FMS
- Foreign Military Sales — U.S. government-facilitated sales of defence articles to allied and partner nations.
Defence market & policy
- Defence prime
- One of the largest integrated defence contractors (e.g., Lockheed Martin, RTX, Northrop Grumman, General Dynamics, Boeing).
- NATO
- North Atlantic Treaty Organization — a driver of allied defence spending, standardization and interoperability.
- Defence budget
- Government appropriation for military spending; a core demand driver for the sector.
- Supplemental appropriation
- Funding enacted outside the regular budget, often for contingencies or replenishment.
- Industrial base
- The network of prime contractors, suppliers and sub-tier firms that design and produce defence goods.
- OCONUS
- Outside the continental United States — used to describe deployed or allied operations.
Capability domains
- C4ISR
- Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance.
- EW
- Electronic Warfare — use of the electromagnetic spectrum to attack an adversary or defend friendly systems.
- UAS / UAV
- Uncrewed Aircraft System / Vehicle — a drone and its ground control elements.
- Missile defence
- Systems and sensors used to detect, track and intercept incoming missiles.
- Space-based
- Systems operating in orbit, such as communications, missile-warning and intelligence satellites.
- Autonomy
- Platforms that operate with limited human control, including uncrewed and automated systems.
- Hypersonic
- Flight above Mach 5; describes a class of high-speed weapons and test vehicles.
Companies we cover
- Prime contractor
- A lead systems integrator for major platforms (e.g., LMT, RTX, GD, NOC, BA).
- Aerospace supplier
- A firm supplying airframes, components, engines and systems (e.g., HEI, TDG, TXT, CW, HWM).
- Defence technology
- A firm focused on sensors, software, cyber and uncrewed systems (e.g., LHX, MRCY, KTOS, AVAV, PLTR).
- Government services
- A firm providing IT, engineering and mission support to government customers (e.g., LDOS, CACI, SAIC, BAH, KBR).
Aerospace & systems
- OEM
- Original Equipment Manufacturer — e.g., the maker of an airframe or engine.
- Aftermarket
- Parts, maintenance, upgrades and services sold after the original equipment sale.
- Aeronautics
- The design, development and manufacture of aircraft.
- Avionics
- The electronic systems used on aircraft and missiles.
- Sustainment
- Long-term maintenance, support and modernization of fielded systems.
Market & finance
- Market capitalization
- Share price multiplied by shares outstanding — the total equity value of a company.
- EPS
- Earnings per share — net income divided by the weighted average share count.
- P/E ratio
- Price-to-earnings ratio — share price divided by earnings per share.
- Forward P/E
- Price divided by projected (forward) earnings per share.
- Beta
- A measure of a stock’s volatility relative to the broader market.
- Dividend yield
- Annual dividends per share divided by the share price.
- Guidance
- A company’s forward-looking outlook on earnings, revenue or other metrics.
Definitions are provided for general reference and may be simplified. They are not investment advice. Where a company is named as an example, it is for illustration only — not a recommendation.