Lockheed Martin

Lockheed Martin operates a government-contracts business model: nearly all revenue comes from long-term, multi-year contracts with the U.S. Department of Defense, allied governments, and civil space agencies. The company designs, manufactures, and sustains large-scale defense platforms — fighter aircraft (F-35), missile defense systems, satellites, and integrated command-and-control networks. Revenue is recognized as work is performed under cost-plus, fixed-price, and time-and-materials contract structures. The company sells to a single dominant buyer (the U.S. government) and its treaty allies, with procurement cycles measured in decades. The F-35 program alone accounts for roughly 30% of revenue, with sustainment and upgrades providing a multi-decade recurring tail after production. The model's structural advantage is incumbency: Lockheed controls the supply chains, security clearances, and systems-integration expertise required to bid on programs that no new entrant can replicate quickly. The economics are capital-intensive on the front end — massive R&D and production facilities — but margins structurally improve as programs move from development into production and sustainment. High-margin contractor logistics support and classified sovereign-services work provide the most attractive unit economics within the portfolio. Newer partnerships with software-native firms like Anduril and Palantir represent a shift toward layer-adding modernization work on top of existing platforms, typically structured as subcontracts or teaming agreements under prime contracts.