Lockheed Martin at $77B TTM Revenue: The F-35 Machine Grinds On While NGAD Slips Away

Lockheed Martin posts $77B in trailing revenue with an 89% ROE, but Boeing's NGAD/F-47 win reshapes the next-gen fighter landscape. The company's AI-driven mission systems and hypersonics portfolio are now its most critical growth vectors.

LMT · Industrials · September 04, 2026

S&P 500 Position

Lockheed is the largest pure-play defense company in the S&P 500, ahead of RTX (Raytheon), General Dynamics, Northrop Grumman, and L3Harris. Within the broader Industrials sector, it sits behind conglomerates like Honeywell, Caterpillar, and GE Aerospace but commands a premium valuation relative to defense peers due to F-35 program visibility and sovereign-backed revenue.

Index Weight: ~0.25% | Rank: Approximately #90-110 in the S&P 500 by market cap

Company Overview

Lockheed Martin is the world's largest defense contractor by revenue, and its dominance is built on a single axis: the F-35 Lightning II program, the most expensive weapons system in human history. With over 1,000 aircraft delivered across three variants (F-35A conventional, F-35B short takeoff/vertical landing, F-35C carrier variant), the program generates revenue not just from new airframes but from a decades-long sustainment tail that locks in allied nations and the U.S. services. The company's four business segments — Aeronautics, Missiles and Fire Control, Rotary and Mission Systems, and Space — collectively address every domain of modern warfare, from low-Earth orbit to the ocean floor. The competitive landscape shifted materially in March 2025 when the U.S. Air Force awarded the Next Generation Air Dominance (NGAD) contract — now designated F-47 — to Boeing, not Lockheed Martin. This was the first time since the JSF competition in 2001 that Lockheed lost a major manned fighter award. The loss removes what would have been a multi-decade, multi-hundred-billion-dollar franchise from Lockheed's pipeline. The company's response has been to double down on hypersonic weapons, integrated air and missile defense, and space systems — areas where it holds strong incumbency through programs like the Long Range Hypersonic Weapon (LRHW), the Aegis Combat System integration work, and the Next Generation Interceptor. Lockheed's financial profile remains extraordinary by industrial standards: an 89.2% return on equity driven by aggressive capital return (buybacks and dividends) and a capital-light model where the U.S. government funds most R&D and facilities. The 2.34x debt/equity ratio is a feature, not a bug — the company systematically levers its balance sheet because its revenue base is backed by sovereign contracts with near-zero default risk.

Products & Revenue

Lockheed Martin's revenue is concentrated in four segments, with Aeronautics (the F-35 and legacy platforms like F-16 and C-130J) historically contributing the largest share. Missiles and Fire Control covers precision strike and integrated air defense. Rotary and Mission Systems spans helicopters (Sikorsky), naval combat systems, and C4ISR. Space handles national security satellites, strategic missile defense, and the Orion crew vehicle for NASA. The F-35 program alone accounts for roughly 25-30% of total company revenue when combining production and sustainment.

Aeronautics (~39%): F-35 production and sustainment, F-16 Block 70/72 new builds for international customers, C-130J tactical airlifter, and classified programs including work on sixth-gen concepts.

Missiles and Fire Control (MFC) (~17%): PAC-3 missile interceptors, THAAD, JASSM/LRASM cruise missiles, Javelin anti-tank missiles, hypersonic strike weapons (LRHW/Dark Eagle), and directed energy systems.

Rotary and Mission Systems (RMS) (~24%): Sikorsky helicopters (Black Hawk, CH-53K), Aegis Combat System, littoral combat ship mission packages, undersea warfare systems, and enterprise IT/cybersecurity services.

Space (~20%): GPS III satellites, SBIRS/Next Gen OPIR missile warning, Orion Multi-Purpose Crew Vehicle, United Launch Alliance (joint venture with Boeing), strategic and missile defense interceptors including the Next Generation Interceptor (NGI).

Segment percentages are approximate and based on FY2024 10-K proportions. Exact FY2025/TTM segment breakdown data unavailable from research findings.

Leadership

Jim Taiclet

CEO since 2020. Former CEO of American Tower Corporation, where he built one of the largest REITs in the world around wireless infrastructure. Taiclet is a West Point graduate, former F-15A pilot, and Harvard MBA. His strategic thesis at Lockheed centers on '21st Century Security' — connecting legacy platforms into networked kill webs using 5G, AI, and cloud architectures rather than relying solely on new platform starts.

Frank St. John, COO: Oversees all four business segments. Previously ran Rotary and Mission Systems, giving him deep operational knowledge of Lockheed's most complex integration challenges across naval, rotary-wing, and cyber domains.

Greg Ulmer, EVP, Aeronautics: Leads the F-35 program and all aeronautics operations. Responsible for managing the largest defense program in history while navigating sustainment cost pressures and TR-3 hardware/software upgrade delivery.

Tim Cahill, EVP, Missiles and Fire Control: Runs the segment with the highest growth trajectory — hypersonic weapons, integrated air and missile defense, and precision strike. MFC is Lockheed's primary vehicle for capturing the global ammunition replenishment cycle.

Robert Lightfoot, EVP, Space: Former acting NASA Administrator. Leads Lockheed's space segment including the Next Generation Interceptor, GPS III, and Orion — programs that define the intersection of national security and deep space.

The AI Angle

AI as the connective tissue of networked warfare

Lockheed Martin's AI strategy is not about building foundation models or competing with hyperscalers. It is about embedding AI into the decision loops of military platforms — sensor fusion, autonomous mission planning, predictive maintenance, and electronic warfare. The company's central concept is the 'kill web,' where AI algorithms stitch together data from satellites, fighter jets, ground radars, and naval vessels to accelerate targeting and decision-making from minutes to seconds. The most visible AI product is the company's work on Collaborative Combat Aircraft (CCA) — autonomous drone wingmen designed to fly alongside manned fighters. While Boeing won the NGAD airframe, the CCA ecosystem remains a critical growth area, and Lockheed is competing for CCA production contracts. The company has also invested in AI-driven electronic warfare suites, where machine learning models classify and counter adversary radar emissions in real time — a capability embedded in F-35 Block 4 upgrades. Lockheed's AI infrastructure strategy leans heavily on partnerships. The company has worked with Microsoft Azure Government for classified cloud computing and with NVIDIA on GPU-accelerated simulation environments. Taiclet has publicly articulated a 'build the integration layer, buy the compute' strategy — Lockheed develops the mission-specific algorithms and data pipelines while relying on hyperscaler infrastructure for training and edge deployment. The company's AI Center of Excellence, established in 2022, consolidates ML engineering talent across the four segments. The risk profile is unique: Lockheed's AI systems operate under DoD certification and accreditation requirements that move far slower than commercial AI deployment cycles. Testing autonomous systems against adversarial AI in contested electromagnetic environments is an unsolved verification problem. The company also faces talent competition from commercial AI labs that can offer compensation and publication freedom that a classified defense contractor cannot match.

Financial Snapshot

Revenue (TTM): $77.0B — TTM ending June 2026 | Net Income: $6.3B net income

Margins: Gross ~13%, operating ~11%, net 8.2% (typical for cost-plus and fixed-price defense mix)

Lockheed's capital allocation is a shareholder return machine: the company has repurchased over $30B in stock over the past five years while maintaining a growing dividend (~2.5% yield). The 8.2% net margin is structurally constrained by cost-plus contract economics and fixed-price development programs that absorb overruns. Free cash flow conversion is the metric that matters — Lockheed typically converts 90-100%+ of net income to FCF, making it one of the most cash-generative industrials in the index.

1-Year Performance

$525.28 as of September 4, 2026 — up 16.2% year-over-year, outperforming the broader S&P 500 Industrials sector.

The YoY gain reflects strong defense budget tailwinds, accelerating international F-35 orders (particularly in Europe and Asia-Pacific post-Ukraine), and elevated munitions demand across Missiles and Fire Control. The NGAD loss to Boeing created a temporary dip in early-to-mid 2025, but the stock recovered as investors priced in the durability of the F-35 sustainment tail and hypersonics growth.

Recent News

Fun Fact: The F-35's Autonomic Logistics Information System (ALIS) — now replaced by the Operational Data Integrated Network (ODIN) — was so technically troubled that maintainers at deployed squadrons would sometimes physically carry hard drives between networks to transfer parts data, a process they nicknamed 'sneakernet.' The ODIN replacement is essentially a cloud-native re-architecture of a logistics system that was originally designed in the early 2000s, making it one of the largest legacy-to-cloud migrations in military history.