A Hundred and Sixty-Three Billion, Twelve Per Cent of It Next YearWide moat
GE Aerospace (GE) — moat facet
A backlog disclosed with its calendar: a seventh of the services obligation arrives after 2041.
Backlogs are usually a marketing number. GE Aerospace's is disclosed with a schedule, and the schedule is the most persuasive single disclosure in the company.
At the end of 2025 the remaining performance obligation was $190,564 million, of which equipment was $27,534 million and services $163,029 million1. The company then states how it expects to recognise it: equipment-related obligations 34%, 57% and 89% within one, two and five years; services-related obligations 12%, 42%, 69% and 86% within one, five, ten and fifteen years, with the remainder thereafter2.
Read the services line slowly. Only an eighth of it converts next year. Fewer than half within five years. Nearly a third of it is still outstanding after ten years, and about a seventh arrives beyond fifteen — which is to say, after 2041.
That is what a thirty-year installed base looks like when a company is made to put a calendar against it. It also explains why GE Aerospace can be valued on something other than next year's earnings: a large part of the next decade and a half of services revenue is contracted rather than forecast.
The backlog is growing faster than it is being consumed. Total RPO rose $18.9 billion, or eleven per cent, in 2025, and another $20.2 billion, or eleven per cent, in the first six months of 2026 to $210,790 million3 — the growth coming from contract modifications, engines put into service under long-term service agreements, and equipment orders outpacing revenue.
The qualification is real: this is contracted revenue, not contracted profit, and the profit on the services half is the estimate discussed elsewhere on these pages.
Track the services share of the backlog: $163,029 million of $190,564 million, or 86%, at the end of 20254. A falling services share would mean the company is accumulating orders for engines rather than commitments to maintain them, and the engines are the part sold at a loss.
Total remaining performance obligation rose $18.9 billion in 2025 and a further $20.2 billion in the first six months of 2026, with services at $178,705 million and eighty-six per cent of the services obligation scheduled inside fifteen years. The backlog is being added to faster than it is consumed.
Against annual services revenue of $30,163M — about five and a half years already contracted. The disclosed run-off is 12%, 42%, 69% and 86% within one, five, ten and fifteen years, so roughly a seventh arrives after 2041. A falling services share of the backlog would mean orders for engines rather than commitments to maintain them.
Source: GE Aerospace Form 10-K, fiscal year 2025 ↗- ReportedAt the end of 2025 the remaining performance obligation was $190,564 million, of which equipment was $27,534 million and services $163,029 million.GE Aerospace Form 10-K, FY2025 - Management's Discussion and Analysis — consolidated results, profit and operating profit margins, adjusted earnings per share, total remaining performance obligation and its year-on-year movement, cash flow from operations and free cash flow, the share repurchase programme, borrowings and the financing-arrangement discussion. — FY2025 · publ. January 2026 · source ↗
- ReportedThe company then states how it expects to recognise it: equipment-related obligations 34%, 57% and 89% within one, two and five years; services-related obligations 12%, 42%, 69% and 86% within one, five, ten and fifteen years, with the remainder thereafter.GE Aerospace Form 10-K, FY2025 - notes to the consolidated financial statements — the segment note including segment expenses, segment profit and other segment income; contract assets, contract liabilities and long-term service agreement balances; the remaining performance obligation note with its expected recognition schedule; goodwill and intangible assets; and the geographic revenue table. — FY2025 · publ. January 2026 · source ↗
- ReportedTotal RPO rose $18.9 billion, or eleven per cent, in 2025, and another $20.2 billion, or eleven per cent, in the first six months of 2026 to $210,790 million — the growth coming from contract modifications, engines put into service under long-term service agreements, and equipment orders outpacing revenue.GE Aerospace Form 10-Q for the quarter ended June 30, 2026, Management's Discussion and Analysis — consolidated revenue, profit and earnings per share, the segment results for Commercial Engines & Services and Defense & Propulsion Technologies, commercial engine and LEAP unit deliveries, internal shop visit revenue growth, the remaining performance obligation and its equipment and services split, the supply chain, tariff and Middle East discussions, and the planned $1 billion US manufacturing investment and 5,000 US hires. — Q2 2026 · publ. July 2026 · source ↗
- Moat Explorer calcTrack the services share of the backlog: $163,029 million of $190,564 million, or 86%, at the end of 2025.Moat Explorer calculation from GE Aerospace's reported figures. Equipment gross margin: sales of equipment less cost of equipment sold was $(314)M in 2022, $(582)M in 2023, $(67)M in 2024 and $(223)M in 2025, about $1.2 billion cumulatively, and about -1.8% of equipment sales in 2025 against -0.7% in 2024. Services gross margin: (18,345-10,836)/18,345 = 40.9% in 2022, 42.4% in 2023, 43.8% in 2024 and (30,163-16,586)/30,163 = 45.0% in 2025. Services RPO of $163,029M against services revenue of $30,163M is 5.4 years, and $163,029M of $190,564M is 86%. LEAP deliveries of 1,570 + 1,407 + 1,802 + 1,030 in the first half of 2026 total 5,809 since the start of 2023. LEAP was 1,802 of 2,386 commercial engines in 2025, 75.5%. — FY2022-FY2026 · publ. September 2026 · source ↗