Lockheed Martin Corporation

The FY2025 year-end backlog of $194B is approximately 2.6 times annual sales, supported by defense programs with 20-30 year lifecycles; F-35 sustainment is growing as the most profitable segment within Aeronautics. Forward visibility is strong, though individual contracts remain subject to government convenience termination.

Four business segments (Aeronautics 40%, RMS 23%, MFC 19%, Space 17% of FY2025 revenue) provide reasonable spread across mission areas, with no segment exceeding 40%. All four segments serve defense and national security end markets with correlated budget cycles, and the F-35 program alone accounts for 27% of consolidated FY2025 revenue.

Approximately 73% of FY2025 revenue derived from the US Government, with international customers representing roughly 27%; no single allied nation contributes more than a few percent of total revenue. High single-country concentration is a structural limitation for a company with operations and customers across more than 50 nations.

Defense prime manufacturing requires proportional labor and capital investment as production volumes scale; Lockheed plans to increase combined capital expenditure and independent R&D to approximately $5B in FY2026, a step-function increase above FY2025 levels, to support missile and fighter production ramps. Operating leverage is limited by the capital intensity of building new facilities and scaling a security-cleared defense workforce.

The majority of revenue flows from multi-year US and allied government contracts for national security programs with no civilian substitutes, and company management describes F-35 sustainment as the fastest-growing, highest-margin segment within Aeronautics. Fixed-price development contracts on new programs carry cost-at-completion risk, preventing fully contractual revenue quality.