Chair, Chief Executive Officer and President at Northrop Grumman
Thanks, Todd. Good morning, everyone, and thank you for joining us. We've seen significant changes to the geopolitical landscape since our last earnings call. Russia's invasion of Ukraine has consequences for the stability of the region in addition to creating a profound humanitarian crisis. Our thoughts are with the people of Ukraine as they defend their freedom and protect their way of life. Through the Northrop Grumman Foundation, we are committing aid to help the people of Ukraine, including matching our employees' personal donations to select charitable organizations. This situation underscores the importance of having strong defensive capabilities to deter broader aggression and contain global conflicts. At Northrop Grumman, we've worked to ensure our country and its allies have these deterrent capabilities.
Modern deterrence depends on our customers' ability to maintain advantage over competitors in multiple domains from undersea to space and cyberspace and every domain in between. Northrop Grumman continues to demonstrate our ability to bring deterrent solutions to a more complicated world through unique capabilities in areas such as stealth, cyber, space, computing, propulsion and communications to name a few. I'll talk more specifically about our capabilities and our strategy in a few moments. But first, let's address the budget trends we see in light of this threat environment. In the U.S., there is bipartisan support for increasing defense budgets.
Congress finalized the fiscal year 2022 defense appropriations in March, and the administration has since issued the fiscal year 2023 defense budget request. Both of these base budgets showed solid 4% to 5% top line growth with additional potential in supplemental funding. Based on initial indications from Congress, the final fiscal year 2023 appropriation could be even higher than the initial request as Congress looks to address the evolving threat landscape, but also to offset inflationary pressures. Currently, the fiscal year 2023 budget request includes a 4% increase in the investment accounts. The main driver behind this increase is a 9% increase in R&D to fund development of critical capabilities, particularly in space and deterrents.
Space continues to be one of the fastest-growing defense budget areas with a 30%-plus year-over-year increase. The request also fully fund modernization of the strategic deterrent, including initial production funding for B-21 as well as significant year-over-year increase in development funding for GBSD. And NASA budgets are also growing in support of a new era of space exploration. The FY 2023 budget request includes an 8% increase over FY 2022, including funding ongoing programs such as Artemis and new initiatives for Moon to Mars efforts. And globally, there is an ongoing paradigm shift regarding national security and several allies have pledged to increase defense spending as a result.
We stand ready to support them in achieving their national security objectives as well. With the budget environment as context, I'll take a few minutes to step back and frame our business strategy. Our fundamental goal is to be the leading technology company, enabling the U.S. and its allies to protect freedom, deter conflict and sustain our planet. Our business strategy, which we've been executing for several years is focused on four core areas. First, is maintaining technology leadership and delivering innovative and affordable solutions with speed. Next is sustainably and profitably growing our business in our customers' highest priority missions while maintaining contracting discipline.
Third is keeping a laser focus on performance and driving cost efficiencies. And finally, we are focused on deploying our capital in value-creating ways for our customers and investors. This strategy has created strong alignment with our customer priorities and strengthened our portfolio position. As we sit here today, we expect this will enable us to accelerate our revenue growth rate in 2023 from the low single digits in our 2022 guidance. By 2024, we also expect that by growing our business and delivering strong operational performance, we will be able to drive our segment operating margin rate to approximately 12%. And we continue to expect to grow our transaction-adjusted free cash flow at a double-digit CAGR through this period.
From a capital deployment perspective, investing in our business to support this growth outlook remains our top priority. After making such investments, we are targeting a return of at least 100% of our free cash flow to investors in 2022. Underlying these performance goals and expectations is our position in several priority growth areas for our customers. Our role in supporting deterrents across all domains is in direct alignment to the needs of today's changing global national security environment. For nearly seven decades, the U.S. has successfully mitigated the risk of broader global conflict through strategic deterrents. Northrop Grumman is the prime contractor on two of these recurrent deterrents modernization program.
For the B-21 program, the Air Force confirmed that the first aircraft has entered the ground test phase, paving the way for first flight, and there are five additional test aircraft in various stages of assembly. This progress is partly enabled by our digital design capabilities and advanced manufacturing technologies, which reduce risk ahead of the aircraft's first flight. And looking forward, we expect sales on the B-21 program to grow as the EMD phase continues, and we progress into low rate initial production. This assumption underpins our expectations for aeronautics revenue to be flat next year and return to growth in 2024. For GBSD, we remain on schedule.
The program is expected to continue to ramp over the next couple of years as we execute on the $13 billion EMD contract with nearly $1.9 billion in expected revenue in 2022. We still expect the program to enter production in the 2026 time frame with initial operating capability planned for 2029. GBSC production is expected to be a material growth driver in the middle of the decade as is reflected in the precedent budget. In addition, our space business continues to experience rapid growth as our customers rearchitect their space-based capabilities. This growth is in response to adversaries developing more sophisticated weapons, the need for more capable missile defense warning systems as well as the migration of some airborne missions to the space domain.
In the first quarter, we've received several new awards that showcase the breadth of our space portfolio and our ability to compete and win in various domains, including ground systems and proliferated LEO constellations. These awards build on our significant backlog and positions our space business for expected double-digit growth once again this year. Notable wins in this quarter included nearly $700 million award for 42 satellites in low-Earth orbit that provide high-speed, low-latency communications for the Space Development Agency's transport layer. And we won a $340 million contract for Deep-Space Advanced Radar Capability, or DARC, that dramatically improves situational awareness, particularly in geosynchronous orbit.
And in Q2, we anticipate an approximately $2 billion award from ULA to provide GEM 63 motors for launch services, including in support of Amazon's Project Kuiper. Another area where we see meaningful future growth opportunities is in Mission Systems, particularly our network information solutions business, which at its core is a communications and processing business. In this area, we have proven technology leadership in connecting and linking military systems with a broad portfolio of products, including networking systems and radios and cyber computing and AI capabilities. We're seeing a rapid evolution in this area with ambitious goals from our customers to field open distributed secure networks that are more survivable.
Initiatives like JADC2 are providing demand for our existing platform-agnostic solutions as well as providing opportunities for new technologies we are developing. And we are creating partnerships like the 5G partnership with AT&T that we announced this month to strengthen our competitive position. We believe this communications business will be the fastest-growing area of MS over the next couple of years. Given all that I've just outlined, you can see that our portfolio is aligned to the evolving national security environment and priority areas for our customers. We continue to demonstrate our ability to deliver compelling solutions in this environment. Ultimately, executing on our strategy depends on having the right culture and people.
This is one of the reasons we focus on remaining an industry leader in ESG. I encourage you to look at our annual sustainability report, which we published in March. It provides insights to our progressive governance structure, our culture, our commitment to ethics, diversity, equity and inclusion and environmental sustainability. As we shared in this year's report, we are committing to net zero emissions in our operations by 2035. We also published our first TCFD report, which provides additional transparency around our approach to managing the climate-related risks and opportunities across our business. So with that, I'm going to turn the call over to Dave to provide more detail on our results and guidance, and then we'll move on to Q&A. Dave?