RTX Corporation

RTX's $268B backlog at year-end 2025 — approximately three times annual revenue — provides multi-year revenue visibility, with roughly 25% expected to convert within 12 months. Defense programs are multi-year sole-source contracts; commercial engine aftermarket is bound by long-term service agreements tied to the installed fleet, which continue independently of new order activity.

Three segments — Collins Aerospace (~34%), Pratt & Whitney (~34%), and Raytheon (~32%) of FY2025 revenue — are roughly equal in size and serve distinct applications in airframe systems, propulsion, and weapons and sensors respectively. While all three are anchored in aerospace and defense, they serve different customers and have largely uncorrelated demand drivers between commercial aviation cycles and government defense appropriations.

U.S. government sales were $33.3B in FY2025 (~38% of total revenue), and international sales reached $41.3B (~47%), with the remainder in U.S. commercial. No single non-U.S. country accounts for a dominant share given the breadth of allied governments and global commercial customers served, but the U.S. government remains the largest single revenue source in aggregate.

RTX's manufacturing model is capital- and labor-intensive — jet engines, avionics, and missile systems require specialized workforce, controlled facilities, and extended supply chains that scale proportionally with output. The Collins and P&W aftermarket businesses carry better incremental economics, but supply chain constraints and labor shortages flagged in FY2025 operational updates limit enterprise-level operating leverage.

A substantial share of RTX's revenue flows from long-term government defense contracts and commercial engine aftermarket service agreements — both contractual, recurring, and mission-critical. Fixed-price defense development contracts at Raytheon expose margins to cost overruns, tempering what would otherwise be a high-quality, low-churn revenue profile.