German submarine maker TKMS reported a record $22 billion order backlog and raised its 2026 sales outlook on Wednesday, citing surging demand for warships amid rising geopolitical tensions that have boosted defense industry investments globally.

The company, spun off from Thyssenkrupp last year, benefits from increased investor appetite for defense companies following the Ukraine war and U.S. pressure on Europe to enhance military capabilities. This strategic move allows TKMS to compete more effectively in multi-billion euro submarine tenders, particularly in India and Canada.

Sales are now forecast to grow by 2% to 5% in 2026, exceeding previous guidance of minus 1% to up to 2%. In the October-December quarter, sales fell 1% to €545 million while operating profit remained stable at €26 million, with the company maintaining its target of an operating margin exceeding 6%.

CEO Oliver Burkhard emphasized that customers continue to show high demand for advanced maritime capabilities, positioning TKMS as Europe's only fully integrated maritime systems supplier. The company's strengthened order book reflects its competitive advantage in the global defense market during a period of increased military spending across Western nations.