Friedrichshafen, Germany – Rolls-Royce Power Systems is experiencing a surge in demand, fueled by a confluence of factors including the need for reliable backup power and heightened geopolitical tensions. The company, a key player in large engine manufacturing, reported a record €5.72 billion in revenue for 2025, a 19 percent increase compared to the previous year. This represents a 50 percent increase in revenue over the past three years, according to company officials. The success of Rolls-Royce Power Systems highlights a growing trend: businesses and governments are increasingly prioritizing resilience in the face of potential disruptions, from power outages to international conflicts. This demand for reliable power solutions and armored vehicle technology is driving significant growth for the German-based manufacturer.
The company’s strong performance is reflected in its order books, which are currently full with over €7 billion in orders – a 21 percent increase year-over-year. Even as a net profit figure wasn’t disclosed, the adjusted operating profit reached €995 million, approximately 60 percent higher than in 2024, and has tripled over the last three years. This financial success is enabling Rolls-Royce Power Systems to invest heavily in expansion and its workforce. The company plans to add more than 1,000 modern positions globally this year, with half of those based in the Lake Constance region of Germany.
Demand for Backup Power and Armored Vehicles Drives Growth
Rolls-Royce Power Systems is capitalizing on two distinct but equally important markets: emergency power systems for critical infrastructure and engines for armored vehicles. The demand for uninterruptible power supplies (UPS) for data centers is a major growth driver, as these facilities require continuous operation to support the digital economy. These diesel generators similarly provide crucial backup power for essential services like hospitals and airports, ensuring they can continue functioning during power outages. The company’s mtu brand is central to this offering.
Simultaneously, the company is seeing increased demand for engines used in armored vehicles, including the Leopard and Puma models. The portion of revenue generated from this “authority business” has risen from nearly 10 percent a few years ago to around 25 percent currently. Customers include the German armed forces (Bundeswehr), NATO member states, and their allies. This increase reflects the heightened security concerns in Europe and globally, leading to increased investment in defense capabilities.
Expansion and Investment in the Future
To meet this growing demand, Rolls-Royce Power Systems is embarking on a significant expansion plan. The company is investing a high nine-figure sum in expanding and modernizing its facilities, and is planning to build a third factory at its Friedrichshafen headquarters. Construction is slated to begin this year, with completion expected by 2028. “Our factories are operating at full capacity,” said CEO Jörg Stratmann, explaining the need for increased production capabilities.
The company is also demonstrating its commitment to its workforce, providing a bonus of €2,800 to each of its 11,000 employees worldwide, more than half of whom are based at its two plants and other company divisions in Friedrichshafen. Arbeitsdirektorin (Labor Director) Thelse Godewerth emphasized the importance of attracting skilled workers, stating, “In these times, this is decent news.”
Data Centers Account for Half of Revenue
The business with data centers now accounts for approximately half of Rolls-Royce Power Systems’ revenue, and Stratmann anticipates continued growth in this sector. A reliable power supply is paramount for data centers, making Rolls-Royce Power Systems a critical partner for these facilities. The increasing reliance on cloud computing and digital services is expected to further drive demand for backup power solutions. According to a 2024 study by Bitkom, the German data center market is experiencing significant growth, highlighting the importance of reliable infrastructure. The study details current market developments in Germany.
Rolls-Royce Power Systems also manufactures large engines under the mtu brand for yachts, heavy land vehicles, and rail vehicles. These engines provide power for a diverse range of applications, further diversifying the company’s revenue streams.
Looking ahead, Rolls-Royce Power Systems is well-positioned to continue its growth trajectory. The company’s focus on critical infrastructure and defense, coupled with its commitment to innovation and workforce development, will be key to navigating the evolving global landscape. The next major milestone for the company will be the commencement of construction on its third factory this year, marking a significant step towards expanding its production capacity and meeting the growing demand for its products.
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