RTX Backlog Hits $268B Record on Defense Surge

RTX Corporation posted a record $268 billion backlog for full-year 2025 and raised its 2026 outlook, fueled by a sustained surge in global defense spending not seen in more than a decade.

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What Happened

RTX reported full-year 2025 revenue of $88.6 billion, a 9.74% increase from $80.74 billion in the prior year. Organic growth — which strips out currency effects and portfolio changes — ran at 11%, outpacing the company's own guidance and underscoring broad demand across its three principal segments: Pratt & Whitney, Collins Aerospace, and Raytheon.

Adjusted earnings per share for the second quarter of 2025 reached $1.56, up 11% year-over-year, on revenue of $21.6 billion. The company's book-to-bill ratio — the ratio of new orders to deliveries — stood at 1.86 for the quarter, signaling that incoming demand was running nearly double the pace of fulfillment and that backlog growth would continue.

In the first quarter of 2026, RTX reported adjusted EPS of $1.78, beating consensus estimates of $1.52 by approximately 17%, on revenue of $22.08 billion — an 8.7% year-over-year increase.

Market Reaction and RTX Stock

Free cash flow for the full year 2025 reached $7.9 billion, providing management with the capacity to sustain both capital returns to shareholders and accelerated capital expenditure tied to production ramp-ups in missile systems, aircraft engines, and avionics.

Global Defense Spending as the Structural Tailwind

The record Raytheon earnings backlog does not exist in isolation. It is the direct consequence of a structural shift in global defense spending that has now reached its highest burden on world GDP since 2009.

Global military expenditure totaled $2.887 trillion in 2025, a 2.9% increase in real terms, according to the Stockholm International Peace Research Institute. Europe led the acceleration, with regional spending up 14% year-over-year to $864 billion as NATO member states raced toward the alliance's 2% of GDP commitment following Russia's prolonged military campaign in Ukraine. Asia-Oceania followed at $681 billion, up 8.1%, driven by elevated procurement in Japan, South Korea, and Australia. Total global defense industry news for 2026 projects spending exceeding $2.6 trillion, with U.S. Congress having approved a budget of over $1 trillion for the fiscal year.

Strategic Context

RTX is positioned at the intersection of the two most durable demand currents in defense industry news: missiles and precision strike capabilities through its Raytheon segment, and next-generation propulsion and avionics through Pratt & Whitney and Collins Aerospace. The Patriot air defense system, Stinger missiles, and AMRAAM air-to-air munitions remain among the most requested munitions categories as European and Middle Eastern customers rebuild depleted stockpiles and invest in layered air defense architectures.

The commercial aerospace recovery — principally through Pratt & Whitney narrow-body engine deliveries — provides a counterbalancing revenue stream that reduces RTX's dependence on any single defense procurement cycle. The $144 billion commercial component of the total backlog demonstrates that both pillars of the business are expanding simultaneously.

Outlook

RTX raised its 2026 full-year guidance to adjusted sales of $92.5–$93.5 billion and adjusted EPS of $7.10–$7.25, compared with the prior range of $6.70–$6.90 — a meaningful upward revision that reflects management's confidence in both the pace of defense deliveries and continued commercial aviation strength. Free cash flow guidance of $8.25–$8.75 billion represents further improvement over 2025's $7.9 billion.

With global defense spending continuing to expand and European rearmament programs still in early-to-mid execution phases, RTX enters the second half of 2026 with a record order book, raised guidance, and a structural demand environment that shows few signs of reversal.

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