RTX

RTX operates a government-contracts model: nearly all revenue comes from long-term, cost-plus and fixed-price agreements with the U.S. Department of Defense and allied nations. Through its Raytheon and Pratt & Whitney divisions, the company sells missiles (Patriot, Javelin, AMRAAM), radar and sensor systems, and jet engines, plus the sustainment, spare parts, and depot maintenance that follow those platforms. Revenue is recognized over time as contract milestones are met — typically on multi-year programs with large backlogs that provide multi-decade visibility; RTX's backlog exceeds $200 billion. The economics are structurally tied to program volume and the government's willingness to pay for readiness. Development contracts carry lower margins (cost-plus) but de-risk R&D investment, while production and sustainment contracts generate higher, more predictable returns as production runs scale. The Pentagon funds most capital equipment and facility investments, so RTX avoids the heavy capex burden typical of commercial hardware businesses. Aftermarket engine and missile sustainment is particularly margin-rich — governments rarely let high-value defense assets sit idle, creating a durable annuity stream once platforms are deployed. International sales, which flow through Foreign Military Sales channels, often carry even better terms because allied nations pay premiums for access to U.S.-controlled systems.