RTX Corp – Largest U.S. Defense Contractor Posts Results
RTX Corp. (RTX.US), the largest U.S. defense prime and formerly Raytheon, delivered better than expected results for Q4 2025 and confirmed that momentum is carrying into 2026. Both revenue and earnings per share beat Wall Street estimates, reinforcing the broader uptrend across the defense space. The company’s most important long-term growth catalyst appears to be the “Golden Dome” program, although uncertainty around its execution, including political friction with Canada and discussions involving Greenland, may delay any valuation premium tied to potential profits from the project. RTX has also recently been singled out by Trump, who described the company as the least willing to align with new White House guidance. That guidance is increasing pressure on defense contractors to invest more aggressively in domestic factories and ramp production capacity as quickly as possible.
RTX Q4 2025 results
- Revenue: $24.2B, up 12% YoY and clearly above market expectations (around $22.7B).
- Adjusted EPS: $1.55, above consensus (around $1.47).
- YoY EPS growth: +1%, suggesting the quarter was more volume-driven than margin-driven.
- Cash generation: Free cash flow of $3.2B and operating cash flow of $4.2B were among the strongest highlights of the report.
Importantly, all key segments contributed to the quarter:
- Collins Aerospace
- Pratt & Whitney
- Raytheon
GAAP EPS of $1.19 was weighed down by acquisition accounting and restructuring items. For the market, the backlog remains the core pillar of the story: RTX reported a $268B order backlog, including $161B in commercial and $107B directly tied to defense.
Full-year 2025 snapshot
The sharp improvement in free cash flow indicates RTX is moving beyond the “operational cleanup” phase seen in prior years:
- Revenue: $88.6B (+10% YoY).
- Adjusted EPS: $6.29 (+10% YoY).
- Free cash flow: $7.9B, up $3.4B YoY.
2026 outlook
The 2026 guidance looks conservative but highly credible, with room for potential upgrades:
- Revenue: $92–$93B (5%–6% organic growth).
- Adjusted EPS: $6.60–$6.80.
- Free cash flow: $8.25–$8.75B.
The gap between revenue growth (+12%) and adjusted EPS growth (+1%) in Q4 points to cost pressure and or capacity investment. In 2026, the market will be watching operating leverage closely. Overall, RTX enters 2026 with momentum, a large backlog, and improving cash flow, but the key story for the coming quarters will be margins and execution, not order intake alone.
Source: xStation5
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