RaytheonNarrow moat

RTX (RTX) — moat facet

Raytheon's sales barely grew for four years while its orders surged, and it is now turning an $86 billion backlog into 18% growth.

Raytheon is RTX's defence line and its steadiest. It sold $28,043 million in 2025 and earned $3,227 million, an 11.5% margin1.

Raytheon segment sales ($M)26,611202125,176202226,350202326,713202428,0432025RTX Forms 10-K FY2023 and FY2025, three-segment basis
Flat for four years before the surge.

Inside are integrated air and missile defence, including Patriot, the LTAMDS radar and NASAMS; missiles such as AMRAAM, AIM-9X, Standard Missile, ESSM, Tomahawk, StormBreaker, Javelin, Stinger and Coyote; naval radars such as SPY-6; sensors; space; and hypersonics2.

The present segment dates from July 2023, when Raytheon Intelligence & Space and Raytheon Missiles & Defense were combined and some businesses moved to Collins3. Since then it has sold its cybersecurity and intelligence services business, in March 20244, and agreed in June 2026 to sell Blue Canyon Technologies for $620 million5.

It is paid by governments. In 2025 the U.S. government bought $19,237 million of Raytheon's $27,892 million of external sales, foreign military sales added $4,480 million and foreign governments $4,099 million directly; commercial customers bought $76 million6. Products were $24,063 million and services $3,829 million7.

Profitability recovered after a dip. The margin was 12.8% in 20218, fell to 9.0% in 20239, and rose to 11.5% in 2025 and 12.6% in the second quarter of 20261011.

Growth was slow until the order surge arrived. Sales were $26,611 million in 2021 and $25,176 million in 202212, then $26,350 million, $26,713 million and $28,043 million13, only about 5% above 2021 in four years14. Orders ran far ahead: defence bookings of $39,975 million in 202515, and a backlog of $86 billion in June 202616. Second-quarter 2026 sales rose 18%17.

The outlook was raised the most of any segment: operating profit up $575 million to $650 million in 202618.

The segment has also absorbed a programme that used to sit outside it. Until 2022 the results of the Army's Lower Tier Air and Missile Defense Sensor, LTAMDS, were held in corporate; "Beginning in 2023, LTAMDS results are included in the Raytheon segment"19. That radar is now one of the priorities the 2027 budget request singles out for more money20.

Its profit is managed contract by contract. RTX's net estimate-at-completion adjustments, the revisions to expected contract profit, were negative every year: $648 million in 2023, $473 million in 2024 and $386 million in 202521, with Raytheon's improving in 202522. Raytheon's 2025 operating profit rose partly on a favourable change in those adjustments of $0.2 billion and a better mix on Patriot programmes23.

This line turns backlog into sales. The verdict would change if sales growth fell back to low single digits while the backlog kept rising, because then capacity, not demand, would be the limit on the franchise.

Moat trajectory: Widening

Sales +18% in Q2 2026; backlog $86bn.

The number that tests this moat
Reported
Raytheon segment operating profit, latest quarter
$1,042M (Q2 2026), 12.6% margin

The defence line's earnings; margin back below 10% would mean fixed-price contracts are weighing again.

Source: RTX Q2 2026 earnings release ↗
References
  1. ReportedIt sold $28,043 million in 2025 and earned $3,227 million, an 11.5% margin.
    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 - totals across segments: segment sales and profit, eliminations, acquisition accounting and FAS/CAS adjustments. — FY2023-FY2025 · publ. 6 February 2026 · source ↗
  2. ReportedInside are integrated air and missile defence, including Patriot, the LTAMDS radar and NASAMS; missiles such as AMRAAM, AIM-9X, Standard Missile, ESSM, Tomahawk, StormBreaker, Javelin, Stinger and Coyote; naval radars such as SPY-6; sensors; space; and hypersonics.
    RTX Form 10-K for fiscal 2025 - Item 1 business: the three segments and their products, the GTF family powering more than 2,600 aircraft for over 90 operators, the F135 as sole-source engine on all F-35 variants, GTF Advantage certification, the IAE collaboration shares, employees (about 180,000 in 52 countries, 69% in the U.S.) and the divested businesses. — FY2025 · publ. 6 February 2026 · source ↗
  3. ReportedThe present segment dates from July 2023, when Raytheon Intelligence & Space and Raytheon Missiles & Defense were combined and some businesses moved to Collins.
    RTX Form 10-K for fiscal 2023 - the three-segment recast of 2021-2022, the GTF family powering more than 1,700 aircraft for 70 operators, backlog of $196 billion, the Carrier and Otis separation and Chinese sanctions on Raytheon Missiles & Defense. — FY2023 · publ. February 2024 · source ↗
  4. ReportedSince then it has sold its cybersecurity and intelligence services business, in March 2024, and agreed in June 2026 to sell Blue Canyon Technologies for $620 million.
    RTX Form 10-K for fiscal 2025 - Item 1 business: the three segments and their products, the GTF family powering more than 2,600 aircraft for over 90 operators, the F135 as sole-source engine on all F-35 variants, GTF Advantage certification, the IAE collaboration shares, employees (about 180,000 in 52 countries, 69% in the U.S.) and the divested businesses. — FY2025 · publ. 6 February 2026 · source ↗
  5. ReportedSince then it has sold its cybersecurity and intelligence services business, in March 2024, and agreed in June 2026 to sell Blue Canyon Technologies for $620 million.
    RTX second-quarter 2026 earnings release, Form 8-K exhibit 99 - sales of $24.7 billion, segment results, cash flow, balance sheet and raised 2026 outlook. — Q2 2026 · publ. 23 July 2026 · source ↗
  6. ReportedIn 2025 the U.S. government bought $19,237 million of Raytheon's $27,892 million of external sales, foreign military sales added $4,480 million and foreign governments $4,099 million directly; commercial customers bought $76 million.
    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 - Raytheon: segment sales, operating profit, organic drivers, defence bookings and customer types. — FY2023-FY2025 · publ. 6 February 2026 · source ↗
  7. ReportedProducts were $24,063 million and services $3,829 million.
    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 - totals across segments: segment sales and profit, eliminations, acquisition accounting and FAS/CAS adjustments. — FY2023-FY2025 · publ. 6 February 2026 · source ↗
  8. Moat Explorer calcThe margin was 12.8% in 2021, fell to 9.0% in 2023, and rose to 11.5% in 2025 and 12.6% in the second quarter of 2026.
    Moat Explorer calculation from RTX's segment results (Forms 10-K FY2023 and FY2025, Q2 2026 earnings release; $ millions). Operating margins: Collins 2,380 / 21,152 = 11.3% (2021), 2,816 / 23,052 = 12.2% (2022), 4,923 / 30,196 = 16.3% (2025), H1 2026 2,613 / 15,812 = 16.5%, Q2 2026 1,306 / 8,210 = 15.9%, Q1 2026 (first half less Q2) 1,307 / 7,602 = 17.2%; Pratt & Whitney 454 / 18,150 = 2.5% (2021), 1,075 / 20,530 = 5.2% (2022), 2,015 / 28,066 = 7.2% (2024), 2,596 / 32,916 = 7.9% (2025), H1 2026 1,448 / 17,062 = 8.5%, Q2 2026 738 / 8,889 = 8.3%; Raytheon 3,399 / 26,611 = 12.8% (2021), 2,448 / 25,176 = 9.7% (2022), 2,379 / 26,350 = 9.0% (2023), 3,227 / 28,043 = 11.5% (2025), Q2 2026 1,042 / 8,269 = 12.6%; Q1 2026 Raytheon sales 15,214 - 8,269 = 6,945. Growth 2021-2025: Collins 30,196 / 21,152 - 1 = 43% (about 9% a year), operating profit 4,923 / 2,380 = 2.07 times; Pratt & Whitney 32,916 / 18,150 - 1 = 81%, 2025 32,916 / 28,066 - 1 = 17%; Raytheon 28,043 / 26,611 - 1 = 5%. 2025 shares of segment sales (91,155): Pratt & Whitney 36%, Collins 33%, Raytheon 31%; of segment operating profit (10,746): Collins 4,923 = 45.8%, Raytheon 3,227 = 30.0%, Pratt & Whitney 2,596 = 24.2%. Operating profit over segment assets 2025: Collins 4,923 / 71,680 = 6.9%, Raytheon 3,227 / 44,795 = 7.2%, Pratt & Whitney 2,596 / 52,482 = 4.9%. Pratt & Whitney services share 14,449 / 32,916 = 44%; services growth 14,449 / 9,717 = 1.49 times. Collins commercial share 18,858 / 27,585 = 68%; Collins government sales 7,061 + 436 + 1,230 = 8,727, 8,727 / 27,585 = 32%. Raytheon U.S. government share 19,237 / 27,892 = 69%. Collins services share 6,118 / 27,585 = 22%. Pratt & Whitney segment assets 52,482 / 44,307 - 1 = 18%. Pratt & Whitney 2025 defence bookings other than F135: about 9.0 - 2.9 - 2.4 = 3.7 billion. GE Aerospace Commercial Engines & Services profit 8,861 against Pratt & Whitney 2,596: 3.4 times; margins 26.6% against 7.9%. — 2021-2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in RTX's Forms 10-K and 10-Q, earnings releases, earnings call and market data; operands shown in the source line.
  9. ReportedThe margin was 12.8% in 2021, fell to 9.0% in 2023, and rose to 11.5% in 2025 and 12.6% in the second quarter of 2026.
    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 - totals across segments: segment sales and profit, eliminations, acquisition accounting and FAS/CAS adjustments. — FY2023-FY2025 · publ. 6 February 2026 · source ↗
  10. ReportedThe margin was 12.8% in 2021, fell to 9.0% in 2023, and rose to 11.5% in 2025 and 12.6% in the second quarter of 2026.
    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 - totals across segments: segment sales and profit, eliminations, acquisition accounting and FAS/CAS adjustments. — FY2023-FY2025 · publ. 6 February 2026 · source ↗
  11. ReportedThe margin was 12.8% in 2021, fell to 9.0% in 2023, and rose to 11.5% in 2025 and 12.6% in the second quarter of 2026.
    RTX second-quarter 2026 earnings release, Form 8-K exhibit 99 - sales of $24.7 billion, segment results, cash flow, balance sheet and raised 2026 outlook. — Q2 2026 · publ. 23 July 2026 · source ↗
  12. ReportedSales were $26,611 million in 2021 and $25,176 million in 2022, then $26,350 million, $26,713 million and $28,043 million, only about 5% above 2021 in four years.
    RTX Form 10-K for fiscal 2023 - the three-segment recast of 2021-2022, the GTF family powering more than 1,700 aircraft for 70 operators, backlog of $196 billion, the Carrier and Otis separation and Chinese sanctions on Raytheon Missiles & Defense. — FY2023 · publ. February 2024 · source ↗
  13. ReportedSales were $26,611 million in 2021 and $25,176 million in 2022, then $26,350 million, $26,713 million and $28,043 million, only about 5% above 2021 in four years.
    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 - totals across segments: segment sales and profit, eliminations, acquisition accounting and FAS/CAS adjustments. — FY2023-FY2025 · publ. 6 February 2026 · source ↗
  14. Moat Explorer calcSales were $26,611 million in 2021 and $25,176 million in 2022, then $26,350 million, $26,713 million and $28,043 million, only about 5% above 2021 in four years.
    Moat Explorer calculation from RTX's segment results (Forms 10-K FY2023 and FY2025, Q2 2026 earnings release; $ millions). Operating margins: Collins 2,380 / 21,152 = 11.3% (2021), 2,816 / 23,052 = 12.2% (2022), 4,923 / 30,196 = 16.3% (2025), H1 2026 2,613 / 15,812 = 16.5%, Q2 2026 1,306 / 8,210 = 15.9%, Q1 2026 (first half less Q2) 1,307 / 7,602 = 17.2%; Pratt & Whitney 454 / 18,150 = 2.5% (2021), 1,075 / 20,530 = 5.2% (2022), 2,015 / 28,066 = 7.2% (2024), 2,596 / 32,916 = 7.9% (2025), H1 2026 1,448 / 17,062 = 8.5%, Q2 2026 738 / 8,889 = 8.3%; Raytheon 3,399 / 26,611 = 12.8% (2021), 2,448 / 25,176 = 9.7% (2022), 2,379 / 26,350 = 9.0% (2023), 3,227 / 28,043 = 11.5% (2025), Q2 2026 1,042 / 8,269 = 12.6%; Q1 2026 Raytheon sales 15,214 - 8,269 = 6,945. Growth 2021-2025: Collins 30,196 / 21,152 - 1 = 43% (about 9% a year), operating profit 4,923 / 2,380 = 2.07 times; Pratt & Whitney 32,916 / 18,150 - 1 = 81%, 2025 32,916 / 28,066 - 1 = 17%; Raytheon 28,043 / 26,611 - 1 = 5%. 2025 shares of segment sales (91,155): Pratt & Whitney 36%, Collins 33%, Raytheon 31%; of segment operating profit (10,746): Collins 4,923 = 45.8%, Raytheon 3,227 = 30.0%, Pratt & Whitney 2,596 = 24.2%. Operating profit over segment assets 2025: Collins 4,923 / 71,680 = 6.9%, Raytheon 3,227 / 44,795 = 7.2%, Pratt & Whitney 2,596 / 52,482 = 4.9%. Pratt & Whitney services share 14,449 / 32,916 = 44%; services growth 14,449 / 9,717 = 1.49 times. Collins commercial share 18,858 / 27,585 = 68%; Collins government sales 7,061 + 436 + 1,230 = 8,727, 8,727 / 27,585 = 32%. Raytheon U.S. government share 19,237 / 27,892 = 69%. Collins services share 6,118 / 27,585 = 22%. Pratt & Whitney segment assets 52,482 / 44,307 - 1 = 18%. Pratt & Whitney 2025 defence bookings other than F135: about 9.0 - 2.9 - 2.4 = 3.7 billion. GE Aerospace Commercial Engines & Services profit 8,861 against Pratt & Whitney 2,596: 3.4 times; margins 26.6% against 7.9%. — 2021-2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in RTX's Forms 10-K and 10-Q, earnings releases, earnings call and market data; operands shown in the source line.
  15. ReportedOrders ran far ahead: defence bookings of $39,975 million in 2025, and a backlog of $86 billion in June 2026.
    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 ↗
  16. ReportedOrders ran far ahead: defence bookings of $39,975 million in 2025, and a backlog of $86 billion in June 2026.
    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 - defence: Raytheon bookings, book-to-bill and backlog, munitions output, framework agreements and the budget request. — Q2 2026 · publ. 24 July 2026 · source ↗
  17. ReportedSecond-quarter 2026 sales rose 18%.
    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 ↗
  18. ReportedThe outlook was raised the most of any segment: operating profit up $575 million to $650 million in 2026.
    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 ↗
  19. ReportedUntil 2022 the results of the Army's Lower Tier Air and Missile Defense Sensor, LTAMDS, were held in corporate; "Beginning in 2023, LTAMDS results are included in the Raytheon segment".
    RTX Form 10-K for fiscal 2023 - the three-segment recast of 2021-2022, the GTF family powering more than 1,700 aircraft for 70 operators, backlog of $196 billion, the Carrier and Otis separation and Chinese sanctions on Raytheon Missiles & Defense. — FY2023 · publ. February 2024 · source ↗
  20. ReportedThat radar is now one of the priorities the 2027 budget request singles out for more money.
    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 - defence: Raytheon bookings, book-to-bill and backlog, munitions output, framework agreements and the budget request. — Q2 2026 · publ. 24 July 2026 · source ↗
  21. ReportedRTX's net estimate-at-completion adjustments, the revisions to expected contract profit, were negative every year: $648 million in 2023, $473 million in 2024 and $386 million in 2025, with Raytheon's improving in 2025.
    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 ↗
  22. ReportedRTX's net estimate-at-completion adjustments, the revisions to expected contract profit, were negative every year: $648 million in 2023, $473 million in 2024 and $386 million in 2025, with Raytheon's improving in 2025.
    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 ↗
  23. ReportedRaytheon's 2025 operating profit rose partly on a favourable change in those adjustments of $0.2 billion and a better mix on Patriot programmes.
    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 - Raytheon: segment sales, operating profit, organic drivers, defence bookings and customer types. — FY2023-FY2025 · publ. 6 February 2026 · source ↗
Sources
Generated September 28, 2026