The U.S. Government: 38% of SalesWide moat

RTX (RTX) — moat facet

The U.S. government bought $33 billion from RTX in 2025 across all three segments, and it is also the auditor that caps the margin on much of it.

RTX's largest customer is the United States government, which bought $33,279 million in 20251. It spreads across all three segments: $19,237 million at Raytheon, $7,061 million at Collins and $6,778 million at Pratt & Whitney2.

Sales to the U.S. government by segment, 2025 ($M)19,237Raytheon7,061Collins6,778Pratt & WhitneyRTX Form 10-K FY2025, Note 20; excludes foreign military sales
Raytheon takes most, but all three sell to it.

Its share has been falling, from 46% of net sales in 2023 to 40% in 2024 and 38% in 20253, because commercial aerospace grew faster, not because the government bought less. U.S. government sales rose in each of those years, from $31,628 million in 20234.

This customer is unlike any other. It audits RTX's costs, sets allowable profit on many contracts, reimburses pension costs "through the pricing of our products and services to the U.S. government"5, controls exports and can suspend or debar a contractor. RTX took a $0.9 billion charge in 2024 to settle legal matters including defective pricing6.

In exchange it offers the steadiest demand there is. Budgets are set a year ahead, programmes run for decades, and the 2027 base request is $1.1 trillion7.

The government is also a source of research funding. Customer-funded research and development was $4,886 million in 20258, and much of RTX's defence engineering is paid for by the customer who will buy the result. That funding lowers RTX's risk on development and caps its reward on production.

For a moat, this customer is a mixed blessing: it protects the sole-source positions and caps their margins. What matters is its dollar purchases rather than its share. If U.S. government sales fall in a year when the defence budget rises, RTX is losing priority inside the budget.

Moat trajectory: Holding steady

Purchases rising; share falling as commercial grows.

The number that tests this moat
Reported
Sales to the U.S. government, full year
$33,279M (2025), 38% of net sales

The home customer's purchases; a fall in a rising budget would mean RTX is losing priority.

Source: RTX Form 10-K FY2025, customers and backlog ↗
References
  1. ReportedRTX's largest customer is the United States government, which bought $33,279 million in 2025.
    RTX Form 10-K for fiscal 2025 - customers and backlog: sales to the U.S. government (38%, 40%, 46% of net sales in 2025-2023), Airbus (about 14%, 14%, 17% before discounts and incentives; 29%, 31%, 48% of Pratt & Whitney sales), Boeing and Airbus at 16% of Collins sales, international sales of 47%, and total, commercial and defence backlog with remaining performance obligations. — FY2023-FY2025 · publ. 6 February 2026 · source ↗
  2. ReportedIt spreads across all three segments: $19,237 million at Raytheon, $7,061 million at Collins and $6,778 million at Pratt & Whitney.
    RTX Form 10-K for fiscal 2025 - Item 7 segment review and Note 20: net sales and operating profit by segment for 2023-2025, organic sales drivers (commercial aftermarket, OEM, military), sales by customer type, products and services, segment assets, capital expenditure and research and development - Pratt & Whitney: segment sales, operating profit, organic drivers, customer types, assets and capital expenditure. — FY2023-FY2025 · publ. 6 February 2026 · source ↗
  3. ReportedIts share has been falling, from 46% of net sales in 2023 to 40% in 2024 and 38% in 2025, because commercial aerospace grew faster, not because the government bought less.
    RTX Form 10-K for fiscal 2025 - customers and backlog: sales to the U.S. government (38%, 40%, 46% of net sales in 2025-2023), Airbus (about 14%, 14%, 17% before discounts and incentives; 29%, 31%, 48% of Pratt & Whitney sales), Boeing and Airbus at 16% of Collins sales, international sales of 47%, and total, commercial and defence backlog with remaining performance obligations. — FY2023-FY2025 · publ. 6 February 2026 · source ↗
  4. ReportedU.S. government sales rose in each of those years, from $31,628 million in 2023.
    RTX Form 10-K for fiscal 2025 - customers and backlog: sales to the U.S. government (38%, 40%, 46% of net sales in 2025-2023), Airbus (about 14%, 14%, 17% before discounts and incentives; 29%, 31%, 48% of Pratt & Whitney sales), Boeing and Airbus at 16% of Collins sales, international sales of 47%, and total, commercial and defence backlog with remaining performance obligations. — FY2023-FY2025 · publ. 6 February 2026 · source ↗
  5. ReportedIt audits RTX's costs, sets allowable profit on many contracts, reimburses pension costs "through the pricing of our products and services to the U.S. government", controls exports and can suspend or debar a contractor.
    RTX Form 10-K for fiscal 2025 - consolidated financial statements and notes: income statement, cash flow, dividends and repurchases, long-term debt of $37,700 million, goodwill by segment, pension income, the 2024 resolution of certain legal matters, the Raytheon contract termination and the accelerated share repurchase. — FY2023-FY2025 · publ. 6 February 2026 · source ↗
  6. ReportedRTX took a $0.9 billion charge in 2024 to settle legal matters including defective pricing.
    RTX Form 10-K for fiscal 2025 - consolidated financial statements and notes: income statement, cash flow, dividends and repurchases, long-term debt of $37,700 million, goodwill by segment, pension income, the 2024 resolution of certain legal matters, the Raytheon contract termination and the accelerated share repurchase. — FY2023-FY2025 · publ. 6 February 2026 · source ↗
  7. ReportedBudgets are set a year ahead, programmes run for decades, and the 2027 base request is $1.1 trillion.
    RTX second-quarter 2026 earnings call transcript (The Motley Fool) - Raytheon bookings and book-to-bill, GTF aircraft-on-ground and MRO output, munitions output, framework agreements, the defence budget request, GTF Advantage, Collins margin plans and segment outlook - commercial: GTF fleet, maintenance output, aftermarket, orders, Collins and the outlook. — Q2 2026 · publ. 24 July 2026 · source ↗
  8. ReportedCustomer-funded research and development was $4,886 million in 2025, and much of RTX's defence engineering is paid for by the customer who will buy the result.
    RTX Form 10-K for fiscal 2025 - consolidated financial statements and notes: income statement, cash flow, dividends and repurchases, long-term debt of $37,700 million, goodwill by segment, pension income, the 2024 resolution of certain legal matters, the Raytheon contract termination and the accelerated share repurchase. — FY2023-FY2025 · publ. 6 February 2026 · source ↗
Sources
Generated September 28, 2026