Net profit increased five percent in 2025 to �2.1 billion ($2.8 billion), BAE said, as revenue climbed eight percent to �28.3 billion.
Chief executive Charles Woodburn hailed a "record order backlog" for the company's fighter jets, missile launchers, nuclear submarines and other products, which reached �83.6 billion last year after �77.8 billion in 2024.
The company booked orders worth �36.8 billion last year alone, including from Turkey and Norway.
"In a new era of defence spending, driven by escalating security challenges, we're well positioned to provide both the advanced conventional systems and disruptive technologies needed," he said.
Along with other defence contractors, BAE has benefited from rising military spending by governments in the face of Russia's war in Ukraine.
NATO allies have committed to spend five percent of annual output on defence by 2035 as European members also faced pressure from US President Donald Trump to bolster defence spending.
UK Prime Minister Keir Starmer said this week that Britain needed to "go faster" in increasing military spending.
BAE forecast sales and underlying earnings before interest and tax to rise further in 2026.
Shares in the company climbed more than three percent in morning deals to top London's FTSE 100 index, which was trading higher overall.
ajb/bcp/js
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