Core Viewpoint - RTX Corp has a record backlog of $268 billion as of Q4 2025, which represents a 23% year-over-year increase, but converting this backlog into revenue is complicated due to ongoing engine delivery issues that have impacted production targets for Airbus [2][4]. Financial Performance - RTX reported adjusted EPS of $1.55 for Q4 2025, exceeding estimates of $1.47, and revenue reached $24.24 billion, which is 7.1% above expectations [9]. - Free cash flow surged 442% year over year to $3.2 billion, indicating strong operational performance [9]. - The company’s valuation stands at 42x P/E, which assumes successful execution on Pratt & Whitney engine remediation [4]. Backlog and Production - The total backlog includes a $75 billion segment from Raytheon, with a book-to-bill ratio of 1.43, while munitions output increased by 20% in 2025 across various programs [4]. - The backlog is seen as a potential growth story, but execution risks related to engine delivery delays could affect future earnings guidance for 2026, estimated at $6.60 to $6.80 adjusted EPS [4]. Market Sentiment - Retail investor sentiment on Reddit remains positive, with scores ranging from 63 to 78, driven by demand in commercial, defense, and munitions sectors [8][10]. - Discussions among Reddit users focus more on real-time munitions consumption rather than backlog conversion, highlighting a shift in investor interest [10].

Core Viewpoint - RTX is positioned for growth with a record backlog of $268 billion, but execution risks related to engine delivery issues could impact future earnings and stock performance [1] Group 1: Financial Performance - RTX reported a record backlog of $268 billion as of Q4 2025, representing a 23% year-over-year increase [1] - The company achieved an adjusted EPS of $1.55, surpassing the estimate of $1.47, and revenue of $24.24 billion, which was 7.1% above expectations [1] - Free cash flow surged 442% year-over-year to $3.2 billion [1] Group 2: Market Sentiment and Demand - Retail investor sentiment on Reddit for RTX has remained consistently bullish, with scores ranging from 63 to 78 [1] - Munitions output increased by 20% in 2025 across key programs, including Patriot GEM-T, AMRAAM, and Coyote, with further increases planned for 2026 [1] - NATO allies are expected to raise defense spending from approximately 2% of GDP to 3.5% by 2035, extending demand for defense products [1] Group 3: Execution Risks - RTX faces execution risks due to delays in GTF engine deliveries, which have already led Airbus to lower A320 production targets [1] - The current asset-to-liability ratio for RTX is 1.03, indicating potential liquidity concerns [1] - The stock is trading at a P/E ratio of approximately 42x, which assumes successful management of the GTF crisis and timely conversion of backlog into revenue [1]

Group 1 - RTX Corporation (NYSE:RTX) is recognized as one of the 14 safe stocks for a starter portfolio, following the US Department of Defense's approval of Egypt's $4.7 billion purchase of National Advanced Surface-to-Air Missile Systems (NASAMS) [1] - Jefferies has reaffirmed its Hold rating and $225 price target for RTX Corporation, with the transaction involving hundreds of missiles, guidance units, and four AN/MPQ-64F1 Sentinel radar systems [1] - The company's Air Warfare Systems division, which includes AMRAAM and Tomahawk, is projected to grow at a high single-digit rate through the end of the decade [2] Group 2 - Each percentage point of growth in Air Warfare is estimated to contribute one cent toward the 2027 earnings per share of $7.40, representing 1% of the total [2] - RTX Corporation operates in the global aerospace and defense industry, providing systems and services to commercial, military, and government clients through three main businesses: Collins Aerospace, Pratt & Whitney, and Raytheon [3]

Core Viewpoint - The armaments sector is experiencing a "megatrend" driven by geopolitical tensions, particularly the conflict in Iran, which is expected to boost demand for missile systems despite conservative growth forecasts from analysts [1][3]. Group 1: Industry Demand and Growth - Citi analysts believe that the escalating conflict in Iran and the urgency for stockpile replenishment are strengthening multi-year demand signals for missile systems [3]. - Despite positive indicators, consensus forecasts still predict a deceleration in growth for key missile segments, which Citi analysts find surprising given the current geopolitical climate [3][6]. - Jefferies notes that the ongoing conflict in Ukraine has already exposed stress in missile supply chains, indicating that the current constraint is capacity rather than demand [7]. Group 2: Company Exposure and Production Targets - Companies such as RTX Corp, L3Harris Technologies, Lockheed Martin, Karman Holdings, and Ducommun are highlighted as particularly sensitive to the missile and interceptor systems theme due to their exposure in this area [2]. - Production targets for missile systems like AMRAAM, SM-3, SM-6, Tomahawk, PAC-3, and THAAD are set to increase two to four times from current levels over the next five to seven years [4][5]. - Lockheed Martin and Raytheon are expected to be primary beneficiaries of increased demand, along with suppliers like L3Harris and Northrop Grumman [8]. Group 3: Financial Implications - The fiscal 2026 US budget allocates $40.2 billion to missile defense, significantly up from $13.5 billion in fiscal 2025, indicating a strong governmental commitment to increasing missile production capabilities [7]. - Citi suggests that if the push to raise output continues, recent framework agreements could be finalized with better economic terms than initially anticipated [5].

Financial Data and Key Metrics Changes - Q4 2025 revenues reached a record $215.8 million, a 9.4% increase from $197.3 million in Q4 2024, marking the 19th consecutive quarter of year-over-year revenue growth [8][24] - Gross margins improved to 27.7% in Q4 2025, up from 23.5% in Q4 2024, with adjusted gross margins at 27.7%, a 370 basis point increase from 24% in the prior year [10][25] - Adjusted EBITDA margin for Q4 2025 was 17.5%, up from 13% in 2022, indicating significant progress towards the Vision 2027 goal of 18% [12][14] - GAAP EPS for Q4 2025 was $0.48, compared to $0.45 in Q4 2024, while adjusted diluted EPS was $1.05, up from $0.75 in the prior year [13][27] Business Line Data and Key Metrics Changes - Military and space segment revenues grew 13% year-over-year to $124 million, driven by strong performance in fixed-wing aircraft, rotorcraft, missiles, and radar [17][24] - Commercial aerospace segment revenues increased by 1% to $82 million, with growth in A320 and 787 platforms offsetting declines in the 737 MAX [20][24] - Structural Systems segment revenue was $96 million, up from $90 million, with operating income margin increasing to 15.2% from 3.6% [28] - Electronic Systems segment revenue rose to $120 million from $107 million, with operating income margin improving to 18.4% from 17.7% [29] Market Data and Key Metrics Changes - The remaining performance obligation (RPO) grew to a record $1.1 billion, increasing by $75 million sequentially, primarily in defense businesses [9] - Book-to-bill ratio was 1.3x in Q4, indicating strong order intake relative to revenue [10] - The company expects continued strength in defense business and a recovery in commercial aerospace in the second half of 2026 [16] Company Strategy and Development Direction - The company is executing its Vision 2027 strategy, focusing on increasing the revenue percentage of engineered products and aftermarket content, which rose to 23% in 2025 from 15% in 2022 [7] - The company plans to hold an investor conference in September 2026 to present the next five-year vision, Vision 2032 [8] - The company is well-positioned to benefit from increased production capacity in key missile programs due to long-term agreements with major defense primes [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the momentum from both military and commercial aerospace markets, anticipating mid-to-high single-digit revenue growth for 2026 [16][14] - The company expects to see continued strength in defense spending and a gradual recovery in commercial aerospace as inventory destocking issues resolve [16][21] - Management highlighted the importance of maintaining strong relationships with defense primes and the potential for significant growth in missile production [70][71] Other Important Information - The company entered into a binding settlement for the Guaymas fire litigation, resulting in a payment of $150 million, with $56 million covered by insurance [15] - The company completed its restructuring program, which is expected to yield annual savings of $11 million to $13 million by the end of 2026 [31] Q&A Session Summary Question: Inventory destocking and working capital - Management expects continued destocking in the first half of 2026, with improvements anticipated in the second half as inventory levels decrease [40] Question: Medium-term opportunities in defense - Management indicated that they have significant existing capacity to meet increased demand, particularly in missile production, with a conservative estimate of at least 30% additional capacity available [50][51] Question: Margin outlook for 2026 - Management suggested that the exit rate for EBITDA margins would be closer to 16.5% for 2026, with opportunities for improvement as production ramps up [59] Question: M&A market activity - Management noted increased activity in the M&A market, with a focus on assets related to engineered products, although valuations remain competitive [97][99]

Q4 2025 Earnings Call Stephen Oswald - Chairman, President and Chief Executive Officer Suman Mookerji – Senior Vice President, Chief Financial Officer February 26, 2026 Disclosures Forward-Looking Statements: This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be preceded by, followed by or include the words "believe," "continue," "estimate," "expect," "may," "plan," "potential," "should," "result," ...

Core Viewpoint - Raytheon has entered into five significant framework agreements with the U.S. Department of War to enhance production capacity and expedite deliveries of various missile systems, including Tomahawk and AMRAAM, in response to growing global demand for precision munitions [1][2]. Group 1: Production Capacity and Agreements - The agreements will last up to seven years and aim to increase annual production of Tomahawk missiles to over 1,000, AMRAAM missiles to at least 1,900, and SM-6 missiles to more than 500, with many munitions expected to grow 2 to 4 times their current production rates [2]. - RTX plans to accelerate production of SM-3 IIA and SM-3 IB interceptors as part of these agreements [2][4]. Group 2: Investment and Economic Impact - The Department of War's commitment to strengthening the defense industrial base will enable RTX to invest in technology, facilities, and workforce to sustain high production rates [3]. - Investments related to these agreements have been factored into RTX's financial outlook for 2026, incorporating a collaborative funding approach to maintain free cash flow for long-term demand [5]. Group 3: Strategic Importance of Munitions - The Tomahawk cruise missile is a precision weapon capable of striking targets from 1,000 miles away and has been used operationally over 2,300 times [6]. - AMRAAM is the most widely deployed air-to-air missile, with production nearly doubling in 2025 and proven performance through over 6,000 test shots [7]. - SM-3 IB is designed for exo-atmospheric intercept of ballistic missiles and was first used in combat in April 2024 [8]. - SM-3 IIA features enhanced capabilities for faster engagement of threats and broader regional protection [9]. - SM-6 supports multiple warfare roles and has been successfully launched from various U.S. Navy platforms [10].

Core Viewpoint - Solitron Devices, Inc. is exploring potential transactions, including mergers or sales, due to strong market demand for defense-related companies and a significant backlog of orders [2][3]. Group 1: Company Developments - The annual meeting of Solitron has been rescheduled to April 24, 2026, from its typical January date due to an unsolicited acquisition proposal that was not finalized [2]. - The company has a record backlog of $28.3 million as of January 31, 2026, driven by strong demand for key defense programs such as AMRAAM and HIMARS [3]. - Solitron's management has successfully turned around the company, enhancing shareholder value and improving operating results, indicating a positive outlook for the future [3]. Group 2: Strategic Options - The company is considering various strategic options, including acquisitions, potential sales, tender offers, or special dividends, although it has not yet retained an investment banker for financial advisory [3][4]. - Interested parties for potential mergers or acquisitions can contact the company, which will establish a data room for further discussions [4]. Group 3: Company Overview - Solitron Devices, Inc. designs, develops, manufactures, and markets solid-state semiconductor components primarily for military and aerospace markets, with a focus on custom products for government contracts [5]. - The company also operates a subsidiary, Micro Engineering Inc., which specializes in addressing design and manufacturing challenges while maintaining efficiency [6].

Financial Data and Key Metrics Changes - For the full year, adjusted sales were $88.6 billion, up $9 billion year-over-year, or 11% organically, driven by 10% growth in commercial OE, 18% growth in commercial aftermarket, and 8% growth in defense [4] - Adjusted EPS of $6.29 was up 10% year-over-year, and free cash flow was $7.9 billion, up $3.4 billion year-over-year [4][18] - The company ended 2025 with a book-to-bill of 1.56, resulting in a record backlog of $268 billion, up 23% year-over-year [4] Business Line Data and Key Metrics Changes - Collins' sales were $7.7 billion in the fourth quarter, up 3% on an adjusted basis and 8% organically, driven by strength in commercial OE and aftermarket [21] - Pratt & Whitney's sales were $9.5 billion, up 25% on both an adjusted and organic basis, driven by strength across all channels [23] - Raytheon's sales were $7.7 billion in the quarter, up 7% on both an adjusted and organic basis, driven by higher volume on land and air defense systems [24] Market Data and Key Metrics Changes - Commercial air travel is expected to grow again, with global RPKs projected to increase around 5% this year, on top of the 5% seen in 2025 [7] - NATO allies are expected to increase their core defense spending to approximately 3.5% of GDP by 2035, supporting strong demand for defense products [9] Company Strategy and Development Direction - The company is committed to making the right investments to support favorable long-term demand and drive sustainable growth [33] - Increased production rates are expected in 2026, particularly on the A320neo, 737 MAX, and 787 platforms, as well as on business jet and general aviation aircraft [8] - The company plans to invest approximately $10.5 billion in CapEx in 2026, focusing on expanding production capacity and factory automation [15] Management's Comments on Operating Environment and Future Outlook - Demand remains strong, and the company is well-positioned for another year of top-line growth [7] - For 2026, adjusted sales are expected to be between $92 billion and $93 billion, with 5%-6% organic growth year-over-year [9][26] - The company expects adjusted EPS to be between $6.60 and $6.80, with free cash flow projected to be between $8.25 billion and $8.75 billion [10][29] Other Important Information - The company invested over $10 billion in CapEx and R&D in 2025, with a focus on expanding production capacity and factory automation [13] - The GTF Fleet Management Plan is on track, with MRO output up 39% in the fourth quarter and expected to continue growing in 2026 [40] Q&A Session Summary Question: Update on GTF Fleet Management Plan - The financial and technical outlook remains on track, with AOG down over 20% from the highs of 2025, and MRO output is expected to continue improving [38][40] Question: Thoughts on Executive Order for Defense Companies - The company recognizes the responsibility to deliver more and faster, aligning resources with the Department of Defense's mandate to ramp production and invest in capacity [44][46] Question: Portfolio Composition and Monetization Opportunities - The company believes it is well-positioned to meet the ramp in defense and commercial sectors, with a strong balance sheet to support investments [50][52] Question: 2026 Guidance for Pratt & Whitney - The company expects large commercial engine deliveries to grow mid to high single digits, balancing the need to support the flying fleet and new installs [58] Question: Raytheon Segment Growth Rates - The majority of sales increase is coming from land and air defense systems, with a strong backlog supporting the outlook for 2026 [74]

Earnings conference call 4th quarter 2025 January 27, 2026 © 2026 RTX Corporation. All rights reserved. Forward looking statements Note: This investor webcast presentation contains statements which, to the extent they are not statements of historical or present fact, constitute "forward-looking statements" under the securities laws. These forward-looking statements are intended to provide RTX Corporation ("RTX") management's current expectations or plans for our future operating and financial performance, b ...