RTX Rides the War Machine: $268B Backlog, Quadrupled Weapons Output, and the AI Brains Behind Autonomous Combat

RTX closed FY2025 at $88.6B in revenue with a record $268B backlog, then landed at the White House to discuss quadrupling missile production as U.S.-Iran operations burn through munitions. The company is simultaneously building the AI autonomy stack for next-generation combat aircraft and fielding cognitive electronic warfare systems on legacy fighters.

RTX · Industrials · March 07, 2026

S&P 500 Position

RTX is the largest aerospace and defense company globally by revenue, larger than Lockheed Martin ($71B), Boeing (recovering from production disruptions), and Northrop Grumman ($41B). Within the S&P 500 Industrials sector, RTX trails only GE Aerospace and Caterpillar by market cap. The competitive dynamic is shifting: while Lockheed dominates in platforms (F-35, hypersonic strike), RTX owns more of the sensor-to-effector kill chain — from radar warning receivers to missiles to engine propulsion — giving it broader program exposure across every major defense platform.

Index Weight: ~0.55% | Rank: Approximately #40-50 in the S&P 500 by market cap

Company Overview

RTX is operating at the nexus of two massive demand drivers: a global air travel recovery fueling commercial aftermarket growth, and a wartime munitions cycle that is stress-testing the entire U.S. defense industrial base. The company's three segments — Collins Aerospace, Pratt & Whitney, and Raytheon — each posted double-digit organic sales growth in Q4 2025, and the combined $268 billion backlog ($161B commercial, $107B defense) provides multi-year revenue visibility that few industrial companies can match. Framework agreements signed in early 2026 with the Department of Defense to ramp Tomahawk production past 1,000 annually, AMRAAM past 1,900, and SM-6 past 500 put Raytheon at the center of the administration's push to quadruple output of high-end weaponry. On the commercial side, Pratt & Whitney's Geared Turbofan (GTF) engine franchise is the growth engine. With over 1,000 GTF orders booked in Q2 2025 alone — including large fleet deals with Wizz Air and Frontier — and the GTF Advantage variant now EU-certified, P&W is building an installed base that will generate decades of high-margin aftermarket revenue. The powder-metal inspection remediation that dogged the GTF fleet is winding down, with MRO output up 26% in 2025 and two new MRO shops onboarded globally. Under Chairman and CEO Chris Calio, RTX is also making a strategic bet on autonomous combat aircraft. Raytheon was tapped to provide the autonomy software for General Atomics' YFQ-42A Collaborative Combat Aircraft, while its PhantomStrike radar — a GaN-based, fully air-cooled AESA unit at roughly half the cost of traditional fire-control radars — is being installed on the Air Force's autonomous X-62A testbed. Collins Aerospace's 'Sidekick' autonomy solution has already flown on the YFQ-42A platform. RTX is not just a missile and engine company; it is building the sensor-to-shooter loop for the next generation of pilotless combat.

Products & Revenue

RTX's $88.6B in FY2025 revenue splits roughly evenly across its three segments, with Pratt & Whitney as the largest by revenue, followed closely by Collins Aerospace and Raytheon. Commercial aerospace (OE + aftermarket) accounts for approximately 60% of total sales, with defense making up the remaining 40%. The aftermarket — spare parts, overhaul, repair, and fleet management — is the profit driver, particularly at Collins and Pratt & Whitney, where commercial aftermarket grew 16-23% year-over-year across quarters. Raytheon's economics are different: it runs on long-cycle government contracts with growing international Patriot, missile defense, and munitions programs generating the largest backlog in company history.

Pratt & Whitney (37%): Designs, manufactures, and services commercial and military jet engines. The GTF engine family powers the A320neo/A220 fleet; military programs include the F135 (F-35) and F100 (F-15/F-16). FY2025 adjusted sales of $32.9B with 17% organic growth.

Collins Aerospace (34%): Supplies avionics, flight controls, power systems, landing gear, nacelles, cabin interiors, and connected aviation solutions to commercial and military platforms. FY2025 adjusted sales of $30.2B with 9% organic growth.

Raytheon (29%): Prime contractor for integrated air and missile defense (Patriot, NASAMS, LTAMDS), precision munitions (Tomahawk, AMRAAM, SM-6, StormBreaker), advanced sensors and radars (PhantomStrike, RAIVEN), and electronic warfare systems. FY2025 sales ~$25.5B with a record $75B defense backlog.

Based on RTX FY2025 earnings release (January 27, 2026) and Q4 2025 segment reporting. Revenue percentages are approximate from full-year adjusted sales figures.

Leadership

Christopher T. Calio

CEO since 2024. Became CEO in May 2024 and Chairman in April 2025. Previously president of Pratt & Whitney and COO of RTX, where he drove the consolidation from four to three business segments. Holds a JD and MBA from the University of Connecticut. Under his leadership in 2024, RTX delivered 41% total shareholder return, ahead of the S&P 500 and core A&D peers.

Neil G. Mitchill, Chief Financial Officer & Executive VP: CFO since 2021, previously VP of FP&A and IR at RTX, and CFO of Pratt & Whitney. Architected the capital allocation strategy that returned $37B to shareholders since the 2020 merger while managing the powder-metal remediation cash outlays.

Juan M. de Bedout, Chief Technology Officer: CTO since January 2024, previously VP of Advanced Technology at Collins Aerospace. Spent 18 years at GE in R&D leadership. Oversees RTX's $2.9B+ annual R&D investment across AI, autonomy, hypersonics, advanced materials, and quantum computing.

Dan Theisen, President, Advanced Products & Solutions, Raytheon: Leads Raytheon's next-gen sensor and weapons portfolio, including the PhantomStrike radar program and the RAIVEN EO/IR sensor family. Driving the strategy to equip autonomous combat aircraft with affordable, exportable sensors.

Bryan Rosselli, President, Advanced Products and Solutions, Raytheon (Electronic Warfare): Oversees Raytheon's electronic warfare portfolio, including the CADS AI-powered radar warning receiver and the advanced EW prototype for the F/A-18 Super Hornet.

The AI Angle

Fielding AI at the edge of combat

RTX's AI strategy is not a corporate rebranding exercise — it is producing fielded, operational systems. The Cognitive Algorithm Deployment System (CADS), successfully flight-tested in early 2025, integrates embedded GPUs with Deepwave Digital's computing stack directly into Raytheon's ALR-69A radar warning receivers on 4th-generation fighters. CADS runs AI/ML models at the sensor edge to identify, classify, and prioritize enemy radar threats in real time — a capability the Air Force is expected to procure across multiple platforms. The RAIVEN sensor family fuses hyperspectral imaging, LiDAR, and AI into a single EO/IR package delivering over 5x the detection capability of previous systems. Meanwhile, Raytheon was selected to provide the autonomy software for General Atomics' YFQ-42A Collaborative Combat Aircraft, one of two CCA prototypes the Air Force plans to downselect in late 2026. Collins Aerospace's Sidekick autonomy solution has already flown the YFQ-42A on a four-hour autonomous mission. The Shield AI partnership, announced in July 2025, is the most strategically significant AI move. RTX is integrating Shield AI's Hivemind autonomous pilot software into its loitering munitions — aiming to field the first operational weapon powered by Networked Collaborative Autonomy, where swarms of weapons coordinate actions in real time without human-in-the-loop control. Shield's ViDAR software is also being bolted onto Raytheon's 3,000+ unit installed base of Multi-Spectral Targeting System (MTS) turrets to enable AI-based detection of maritime and airborne drone swarms. This is a self-funded effort — no government R&D dollars required — signaling RTX's conviction that autonomy is not a future capability but a near-term product differentiator. The foundational research engine is BBN Technologies, RTX's storied R&D lab founded in 1948 (the group that built the original ARPANET routers and sent the first email). BBN operates at the intersection of AI, quantum computing, spectrum dominance, and advanced signal processing. Recent contracts include a Department of Defense program to build ML-powered smart spectrum managers for real-time 5G/defense radar coexistence, targeting a 1,000x improvement in 5G link quality alongside a 20 dB interference reduction for radars. BBN also develops custom large language models for classified defense applications and advanced speech recognition for low-resource languages in intelligence contexts. On the manufacturing side, RTX is deploying proprietary data analytics and AI tools across its factories to monitor KPIs, identify bottlenecks, and improve throughput. Raytheon's Andover, Massachusetts facility reduced circuit card production cycle times by 35% using these tools. Pratt & Whitney cut aged inventory by 45% at its Lansing facility. The $191 million RCADE (Rapid Campaign Analysis and Demonstration Environment) AI-powered simulation tool for the U.S. Army represents another vector: training commanders to adapt to evolving threats in real time using AI-generated scenarios. RTX invested $2.93 billion in R&D in 2024 directed toward AI, autonomy, and quantum computing, with RTX Ventures providing VC-style funding to startups in adjacent technology domains.

Financial Snapshot

Revenue (TTM): $88.6B — FY2025 | Net Income: $6.7B GAAP net income; $8.5B adjusted

Margins: Gross ~20%, operating ~10%, net 7.6%

FY2025 free cash flow of $7.9B was up 75% year-over-year, driven by working capital improvements and the wind-down of powder-metal remediation cash outlays ($1B in 2025, declining to $700M in 2026). The 2026 outlook calls for $92-93B in adjusted sales, $6.60-6.80 adjusted EPS, and $8.25-8.75B in free cash flow. RTX carries a $268B backlog — over 3x annual revenue — providing exceptional forward visibility. Capital allocation priorities are clear: invest in capacity expansion ($2B+ annually in U.S. manufacturing), maintain the dividend ($0.68/quarter, ~1.3% yield), and buy back shares opportunistically.

1-Year Performance

$209.76 as of March 7, 2026. The stock hit an all-time high of $214.50 on March 2, 2026, driven by the onset of U.S.-Iran military operations.

RTX has nearly doubled from its 52-week low, which was driven by tariff fears and lingering GTF powder-metal overhang in spring 2025. The recovery began with strong Q2/Q3 earnings beats, rising defense spending conviction from NATO and the proposed 13% U.S. defense budget hike for FY2026, and culminated in the Iran conflict rally that pushed defense stocks to record highs. The stock now trades at a premium to historical multiples, reflecting both the backlog visibility and the wartime production ramp catalyst.

Recent News

Fun Fact: RTX's BBN Technologies division — the company's advanced research lab — built the Interface Message Processors (IMPs) that formed the backbone of the ARPANET in 1969, making BBN the engineering team behind the first internet routers. BBN engineer Ray Tomlinson also sent the first network email in 1971, choosing the '@' symbol that persists in every email address today. The group still operates from Cambridge, Massachusetts, now developing quantum-secured communications and ML-powered spectrum management systems for the Department of Defense.