Raytheon Technologies Corporation (RTX): Business Model Canvas [Dec-2025 Updated]

You're looking to dissect how a defense and aerospace titan like Raytheon Technologies Corporation (RTX) actually makes its money, especially with the geopolitical landscape shifting. Honestly, looking at their structure is like peering into the engine room of modern defense: it's complex, but the mechanics are clear once you map them out. We're talking about a company projecting sales between $86.5 billion and $87.0 billion for fiscal year 2025, all sitting atop a staggering $251 billion order backlog as of Q3 2025. This Business Model Canvas breaks down exactly how they convert that massive order book, fueled by their 185,000+ skilled employees, into revenue across defense systems, commercial engines, and aftermarket support. Dive in below to see the nine building blocks driving this aerospace giant's performance.

Raytheon Technologies Corporation (RTX) - Canvas Business Model: Key Partnerships

You're looking at the core relationships that keep Raytheon Technologies Corporation running, the ones that secure the big, multi-year revenue streams. These aren't just casual agreements; they are foundational to Raytheon's operations, especially given its position as the world's largest aerospace and defense company.

US Department of Defense (DoD) for major defense programs

The US Department of Defense remains the single most critical partner, underpinning a massive portion of Raytheon's defense segment. The relationship is characterized by large, long-term contracts that provide revenue visibility. For instance, a modification awarded on May 12, 2025, increased a prior contract for Standard Missile-3 Block missile variants for the U.S. and Foreign Military Sales (FMS) partners by $2,134,000,000, bringing the total value to $3,331,830,000. This kind of sustained engineering and product support work is the bread and butter of this partnership. Furthermore, Raytheon secured over $5 billion in integrated air and missile defense awards during the second quarter of 2025. The company's total backlog as of Q3 2025 stood at $251 billion, with $103 billion specifically attributed to defense contracts. Another significant, long-term commitment is the 20-year terms and conditions umbrella contract awarded on August 1, 2025, with a maximum potential value of $50,000,000,000 for Raytheon systems and support. This is a massive commitment to future work.

The Army also continues to invest in advanced analysis capabilities. Raytheon was awarded a follow-on contract from the U.S. Army Futures Command, Futures and Concepts Center to continue utilizing its Rapid Campaign Analysis and Demonstration Environment (RCADE) modeling and simulation capability, ensuring a continuous feedback loop between modeling and real-world threats.

Global network of specialized suppliers for complex components

Raytheon Technologies relies on a vast, complex network to build its sophisticated products. These suppliers deliver innovative, cost-effective solutions that must meet Raytheon's high standards. The company manages this network using tools like the EXOSTAR supplier portal and a Supplier Ratings System (SRS). To be fair, managing this scale is a challenge, especially with supply chain pressures. For example, effective January 21, 2025, Raytheon suspended enforcement of most diversity requirements in active contracts with its suppliers, signaling a focus on immediate operational needs over other mandates. The integration of advanced technology also means bringing in specialized partners; Lagrange Labs, for instance, joined the Raytheon supplier network in December 2025 to verify AI outputs in missile defense and fire-control systems, leveraging its DeepProve technology which has generated over 11 million zero-knowledge proofs in production defense environments.

Strategic alliances with aircraft OEMs like Boeing and Airbus

While Raytheon is defense-heavy, its Pratt & Whitney segment maintains critical ties with major commercial Original Equipment Manufacturers (OEMs). These relationships are essential for engine sales, aftermarket service, and joint programs. You saw this interdependence when Airbus imposed restrictions on extreme cold operations for some aircraft equipped with Pratt & Whitney engines following procedural modifications for engine operations in freezing conditions. On the defense side, Raytheon's joint development work, such as on the David's Sling missile defense system with Israel's Rafael, positions it to benefit from major international sales involving US OEMs like Boeing, such as the $3.5 billion Arrow-3 missile system deal cleared for Germany in 2023. Boeing and Raytheon stand to potentially gain contracts from the $16 billion allocation in the "One Big Beautiful Bill Act" for drones, AI, and low-cost weapons.

Collaboration with technology firms, e.g., AWS for space services

To keep its technology relevant, Raytheon is actively partnering with commercial tech leaders. A prime example is the strategic collaboration agreement announced on December 4, 2025, with Amazon Web Services (AWS) to advance satellite data processing and mission control operations. Raytheon will leverage AWS cloud, AI/ML services, and AWS Outpost edge capabilities to deploy scalable solutions. The stated aims are to help customers reduce mission costs, increase program flexibility, and accelerate capability delivery. This move is about ensuring Raytheon's space systems can utilize modern, secure, cloud-based tools for better decision-making.

International government-to-government defense co-production agreements

International sales and co-production agreements are a major growth driver, often involving direct government-to-government Foreign Military Sales (FMS). Raytheon's Q3 2025 results specifically cited higher volume on land and air defense systems, including international Patriot, as a driver for operating profit growth. The aforementioned SM-3 contract modification explicitly included FMS partners. Furthermore, the US and Saudi Arabia signed a massive $142 billion Defense Sales Agreement in May 2025 that includes air force advancement and missile capabilities, which will certainly involve Raytheon's portfolio. A joint venture involving Raytheon, Raytheon-Rafael Protection Systems, was also awarded a $1.25 billion contract to supply Tamir missiles to Israel recently. Pratt & Whitney also services F-35 propulsion systems for Cooperative Program Partners and FMS customers, evidenced by a $115,075,000 modification in August 2025 for long-lead materials.

Here's a quick look at some of the major financial commitments tied to these key external relationships:

The defense backlog alone, at $103 billion in Q3 2025, shows the depth of commitment from government customers. This is what you look at when assessing long-term revenue stability; it's defintely not short-term speculation.

Raytheon Technologies Corporation (RTX) - Canvas Business Model: Key Activities

You're managing the execution across a massive portfolio, so the key activities for Raytheon Technologies Corporation (RTX) are centered on high-stakes engineering, production, and long-term service contracts. Honestly, the sheer scale of their commitments dictates the daily operational focus.

Research and development of advanced technologies like hypersonics

RTX pours substantial capital into future capabilities. The company invested over $7.5 billion on company and customer-funded research and development efforts in 2024. For 2025, they plan to spend over $7.5 billion again to develop advanced capabilities critical for the next generation of platforms, including directed energy and autonomy. This R&D spend supports work on next-generation aircraft systems and advanced defense solutions.

Manufacturing of jet engines, missiles, and integrated defense systems

This is where the physical output happens, spanning Pratt & Whitney's engines and the Raytheon segment's defensive hardware. The Raytheon segment, for example, secured major awards in Q3 2025, including a $2.5 billion GEM-T missile order supporting multiple international customers and a $2.1 billion order for advanced medium-range air-to-air missiles, or AMRAAM. Pratt & Whitney booked over $3 billion in new awards for the F135 engine in that same quarter. The company is focused on fielding new products and advancing capabilities.

Here's a quick look at some recent financial scale and operational metrics:

Global military and commercial aftermarket support and MRO services

Sustaining the installed base is a massive, recurring activity. Pratt & Whitney drove a sharp 35% year-over-year increase in PW1100 Maintenance, Repair, and Overhaul (MRO) output in Q1 2025, aiming for over a 30% full-year improvement to address Aircraft on Ground (AOG) events. Collins Aerospace also saw growth driven by commercial aftermarket sales.

Executing on the $251 billion order backlog

The primary near-term activity is converting that massive backlog into recognized revenue and cash flow. The total order backlog stood at $251 billion as of the third quarter of 2025. The company returned $0.9 billion of capital to shareholders during Q2 2025 and reduced debt by $2.9 billion in Q3 2025, showing progress on cash deployment against that backlog. Management is on track to return between $33 billion and $35 billion to shareowners through dividends and share repurchases through the end of 2025, a commitment tied directly to executing these orders.

Systems integration for complex air, land, and space platforms

This involves tying together the components from Collins Aerospace, Pratt & Whitney, and Raytheon into cohesive customer solutions. A concrete example of this integration focus is the strategic collaboration Raytheon announced in December 2025 with Amazon Web Services (AWS) to advance satellite data processing and mission control. This effort uses AWS cloud, AI/ML, and Outpost edge technologies to improve mission data processing and constellation command-and-control, which is systems integration for space platforms.

• Driving operational excellence using the CORE Operating System.
• Achieving targeted segment margin expansion of approximately 550 to 650 basis points between 2020 and 2025.
• Focusing on next-generation aircraft systems and resilient networks.
• Delivering on commitments across all three principal business segments.

Finance: finalize the Q3 2025 cash conversion cycle analysis by next Tuesday.

Raytheon Technologies Corporation (RTX) - Canvas Business Model: Key Resources

You're looking at the core assets Raytheon Technologies Corporation (RTX) uses to deliver its value propositions. These aren't just line items; they are the tangible and intangible engines driving their defense and aerospace dominance as of late 2025.

Proprietary intellectual property (e.g., Pratt & Whitney GTF engine)

The intellectual property portfolio is massive, but the Pratt & Whitney GTF engine line shows clear, quantifiable market traction and technological advantage. As of mid-2025, the GTF engine program had stabilized its maintenance, repair, and overhaul (MRO) operations, with PW1100 MRO output up 9% in the third quarter and 21% year-to-date. This technology is a key differentiator, offering up to 20% lower fuel consumption and a 75% smaller noise footprint compared to the prior generation of engines. Furthermore, the introduction of the GTF Hot Section Plus (HS+) option promises to nearly double time on wing. On the defense side, Pratt & Whitney secured a US$1.6 billion contract action to sustain the F135 engine powering the F-35 fleet.

Global manufacturing footprint and specialized facilities

The physical assets and production capabilities are being actively scaled to meet demand. For instance, Pratt & Whitney saw material flow improvements, with isothermal forgings up 16% and structural castings up 29% year-over-year in Q3 2025. The Raytheon segment, in particular, is seeing significant capital deployment to support its order book. CEO Christopher Calio noted specific capacity investments, including $300 million this year for Raytheon expansion projects alone.

Highly-skilled engineering and technical workforce of 185,000+ employees

Raytheon Technologies Corporation (RTX) relies on its people to design, build, and service complex systems. As of late 2025 reporting, the company states it has more than 185,000 global employees. This massive talent pool spans the three core businesses: Collins Aerospace, Pratt & Whitney, and Raytheon.

Record-high order backlog of $251 billion as of Q3 2025

The order backlog represents future revenue visibility, and RTX's is at a record high, providing a strong foundation for near-term operations. The total backlog reached $251 billion as of Q3 2025. This backlog is segmented across the major business units, reflecting demand across commercial aerospace and defense:

The Raytheon segment specifically reported a backlog of $72 billion, which included notable bookings such as over $8 billion in munitions orders in Q3 alone.

Significant capital investment, including $2 billion planned for 2025 US expansion

While the specific $2 billion figure for US expansion isn't confirmed in the latest reports, the company is definitely deploying significant capital to support execution. Overall, management highlighted strategic investments, noting over $600 million this year in expansion projects across the company. This investment focus is critical for ramping up production capacity to convert that record backlog into revenue. The company's free cash flow generation is strong, with $4.0 billion generated in Q3 2025 alone.

• Pratt & Whitney received nearly 1,100 GTF engine orders and commitments since the start of 2025.
• Total GTF engine orders and commitments stand at over 12,000.
• Raytheon segment booked $23 billion in defense awards during Q3 2025.
• Collins Aerospace saw a 16% rise in commercial original equipment sales in Q3 2025.

Raytheon Technologies Corporation (RTX) - Canvas Business Model: Value Propositions

You're looking at the core offerings that keep Raytheon Technologies Corporation (RTX) at the top of the aerospace and defense world as of late 2025. The value propositions are concrete, backed by massive order books and recent contract wins.

Integrated air and missile defense systems (e.g., Patriot, NASAMS) represent a critical, high-demand area. The sheer scale of commitment here is evident in the long-term support structures secured this year. For instance, Raytheon secured a monumental $50 billion terms and conditions umbrella contract from the Defense Logistics Agency in August 2025, covering Patriot system sustainment through July 31, 2045. Also, in November 2025, a $698.9 million contract was booked for National Advanced Surface to Air Missile System (NASAMS) fire units. This segment's strength is reflected in the overall defense backlog, which stood at $103 billion as of Q3 2025.

For Fuel-efficient, advanced commercial jet propulsion (Pratt & Whitney), the value is driven by the installed base and aftermarket needs. Pratt & Whitney reported sales of $8.4 billion in Q3 2025, supported by a 23 percent growth in commercial aftermarket. This recurring revenue stream is vital, and just in December 2025, they were awarded a $1.6 billion undefinitized contract action for F135 engine sustainment. To be fair, Q1 2025 sales for Pratt & Whitney were $7.4 billion, showing strong early-year momentum.

The proposition covering Mission-critical avionics and aerospace systems for all major platforms is anchored by the Collins Aerospace segment. This business posted $7.6 billion in Q3 2025 sales, with commercial aftermarket growing 13 percent year-over-year. You can see the health of the installed base with over $100 billion of out-of-warranty content noted at Collins Aerospace.

When we look at Next-generation defense capabilities like electronic warfare and directed energy, the value is in securing future technology dominance, which is clearly reflected in new awards. The total company backlog hit a record $251 billion at the end of Q3 2025, with $37 billion in new awards that quarter alone.

Finally, the value of Long-term, reliable aftermarket support for commercial and military fleets is what underpins the massive backlog. The total backlog of $251 billion as of Q3 2025 is split between $148 billion commercial and $103 billion defense. This massive order book shows customers are buying into the long-term serviceability of RTX products. Here's the quick math on some of those defense program backlogs contributing to that long-term support stream:

The company is actively investing to service this demand, noting over $600 million this year in expansion projects, with Raytheon specifically investing $300 million to support growing demand.

The core value propositions are supported by these recent financial realities:

• Total RTX Backlog: $251 billion as of Q3 2025.
• Q3 2025 New Awards: $37 billion total.
• Pratt & Whitney Q3 2025 Sales: $8.4 billion.
• Raytheon Segment Q3 2025 Sales: $7,045 million.
• Romania Patriot Contract: $946 million.

If onboarding takes 14+ days, churn risk rises, but for RTX, if they can't ramp capacity to meet the $251 billion backlog, the risk is to future revenue realization, not current value proposition strength.

Finance: draft 13-week cash view by Friday.

Raytheon Technologies Corporation (RTX) - Canvas Business Model: Customer Relationships

The customer relationships for Raytheon Technologies Corporation (RTX) are fundamentally anchored in long-cycle, high-value engagements across defense and commercial aerospace sectors.

Dedicated, long-term contractual relationships with government agencies

Raytheon Technologies Corporation (RTX) maintains deep, multi-year commitments with the U.S. Department of Defense (DoD) and international allies. The defense segment backlog stood at $103 billion as of the third quarter of 2025. This is part of a total company backlog reaching $251 billion at that time. You see this relationship materialize in specific, large-scale awards; for instance, Raytheon secured the largest contract in the history of the AIM-9X program, valued at more than $1.1B, for missile production for the US Navy and international partners. Furthermore, a recent modification for SPY-6 radar production was valued at $646.5 million, with work scheduled through September 2028. A payment of $141 million to RAYTHEON COMPANY from the Department of the Navy was recorded on 2025-03-20.

The structure of these government relationships is evident in the volume of specific defense awards:

• FY 23-25 SM-3 BLOCK IIA AURS: $1,334,626,595
• GMA (MK25) C-BAND: $1,013,250,000
• ADVANCED MEDIUM RANGE AIR TO AIR MISSILE (AMRAAM) PRODUCTION LOT 37: $659,763,997
• STINGER MISSILE PRODUCTION: $544,310,737

Direct, high-touch account management for major commercial airlines

For commercial aviation customers, the relationship is managed through direct, high-touch engagement, particularly in the aftermarket space. This focus drives significant growth; the commercial aftermarket sales for Collins Aerospace saw a 16 percent increase in the third quarter of 2025. In the second quarter of 2025, commercial aftermarket sales specifically rose by 19 percent. This segment's success is also reflected in the Q1 2025 commercial aftermarket growth of 21 percent.

Collaborative R&D with military customers to define future requirements

The development of future defense capabilities is intrinsically linked to customer needs, as seen in ongoing platform modernization. A recent modification awarded to Raytheon Missiles and Defense involved Tomahawk recertification, including an option for engineering support services for foreign military sales, valued at $44,588,201. This type of work solidifies the partnership in evolving mission requirements.

High-trust, compliance-driven engagement for sensitive defense programs

Trust is paramount for programs involving national security systems. The Raytheon segment reported sales of $7,045 million in the third quarter of 2025. The company's ability to secure contracts like the one for the Standard Missile-6 program, valued at $117.1 million with completion expected by April 2029, demonstrates sustained confidence in meeting stringent compliance and performance standards.

Aftermarket service agreements for engine and component maintenance

The maintenance, repair, and overhaul (MRO) business forms a critical, recurring revenue stream, especially for Pratt & Whitney engines and Collins Aerospace components. The overall commercial aftermarket performance is a key driver for the company's financial health, with organic sales growth in Q2 2025 being 16 percent across all segments.

Here's a look at recent segment sales performance, which includes the aftermarket component:

The relationship with commercial customers is heavily weighted toward ensuring fleet readiness and maximizing asset uptime through these service agreements.

Raytheon Technologies Corporation (RTX) - Canvas Business Model: Channels

Direct sales to the US Department of Defense and international militaries are channeled through the Raytheon segment, securing major platform and missile system contracts.

The total contract backlog at the end of the second quarter of 2025 stood at $236 billion, with $92 billion attributed to defense contracts.

Specific contract awards in 2025 demonstrate this channel:

• Raytheon was awarded a $946 million contract to supply Romania with additional Patriot air and missile defense systems in January 2025.
• A September 2025 award for the Coyote Missile System totaled $5,039,629,681.
• A September 2025 contract for Stinger missiles was valued at $578,628,020.
• The US Army awarded a follow-on contract for the Rapid Campaign Analysis and Demonstration Environment (RCADE) modeling and simulation capability in March 2025.

Direct sales to major commercial aircraft Original Equipment Manufacturers (OEMs) are primarily executed through the Collins Aerospace and Pratt & Whitney segments.

For Collins Aerospace, the 2024 sales portfolio breakdown showed that 55% was OEM-related.

Pratt & Whitney secured a $1.6 billion sustainment contract for F135 engines in November 2025.

The segment sales for the quarter ended March 31, 2025, were:

Global network of Collins Aerospace and Pratt & Whitney service centers supports aftermarket revenue.

Collins Aerospace operates over 250+ Sites Globally.

Pratt & Whitney Canada PT6A aerial application engine surpassed 1 million flight hours in 2025.

Pratt & Whitney invested $20 million to increase Engine Center maintenance, repair and overhaul (MRO) capacity in West Palm Beach, Florida, with completion expected by the second half of 2025.

The Government-to-government Foreign Military Sales (FMS) process is a significant channel for the Raytheon segment, often resulting in large potential sales notifications.

Recent FMS activity includes:

The FMS process also funds development work; for instance, a Standard Missile 2 development contract obligated $18.5 million in Foreign Military Sales Canada funds in August 2025.

Direct digital channels for parts provisioning and technical data are integrated across the segments, supporting the aftermarket business.

For Collins Aerospace, the commercial aftermarket sales grew by 13% in Q1 2025.

Pratt & Whitney saw a 19% rise in commercial aftermarket sales in Q2 2025.

The F135 propulsion systems contract awarded in September 2025 explicitly included support for F-35 Cooperative Program Partners and Foreign Military Sales customers, indicating a structured digital/logistical pathway for these sales.

Raytheon Technologies Corporation (RTX) - Canvas Business Model: Customer Segments

You're looking at the core customer base for Raytheon Technologies Corporation (RTX) as of late 2025. This company's revenue streams are deeply tied to government defense spending and the health of the global commercial aviation sector. Honestly, the sheer scale of their backlog tells you a lot about where their near-term certainty lies.

For the full year 2024, Raytheon Technologies Corporation reported adjusted sales of $80.8 billion. By the second quarter of 2025, the total backlog had swelled to $236 billion, which was a 15 percent increase versus the prior year. The defense portion of the backlog at the end of 2024 stood at $93 billion.

US Government (DoD, NASA, intelligence agencies)

This segment represents the bedrock of stability for Raytheon Technologies Corporation, given the non-discretionary nature of defense spending. In fiscal year 2024, the United States accounted for 57.1% of the company's total revenue. The Raytheon segment, which houses many of the core defense systems, reported adjusted sales of $7,157 million in the fourth quarter of 2024. For the third quarter of 2025, the Raytheon segment saw adjusted sales of $7,045 million, marking a 10 percent increase year-over-year, driven by demand for systems like international Patriot and naval programs. The company is planning to increase Coyote production by 93 percent in 2025.

• The defense portion of the total backlog was $93 billion as of the end of 2024.
• In Q1 2024, the cumulative government revenue exposure was reported at 55%.

International Governments and Foreign Militaries (e.g., Middle Eastern, Asian)

International government sales are a critical growth vector, especially for the Raytheon segment's missile and defense products. Raytheon's systems, such as Patriot and National Advanced Surface-to-Air Missile System (NASAMS), are protecting more than 50 countries around the world. Geographically, Europe contributed 19.8% of revenue and Asia Pacific contributed 13.5% in 2024. The Middle East and North Africa region accounted for 4.3% of revenue in 2024. The Q4 2024 sales increase for the Raytheon segment was partially due to higher volume from the restart of contracts with a Middle East customer.

Commercial Aerospace OEMs (e.g., Boeing, Airbus)

This group consists of the major aircraft manufacturers who purchase original equipment (OE) from Collins Aerospace and engines from Pratt & Whitney. The commercial portion of the backlog was substantial at $125 billion at the end of 2024. Pratt & Whitney's Q3 2025 sales were up 16 percent versus the prior year, with commercial OE sales increasing by 5 percent, driven by higher volume in large commercial engines. Collins Aerospace reported that its Q2 2025 sales included a 1 percent increase in commercial OE.

Global Commercial Airlines and Cargo Operators

These operators are the primary consumers of aftermarket services and new engines, making the health of their fleets a direct driver for two of Raytheon Technologies Corporation's segments. Pratt & Whitney saw its commercial aftermarket sales jump by 23 percent in Q3 2025. Collins Aerospace's commercial aftermarket sales increased by 13 percent in Q2 2025. For the full year 2024, Pratt & Whitney had more than 90,000 engines in service. The company expects adjusted sales of $83.0 to $84.0 billion for the full year 2025.

Business and Regional Aircraft Operators

The installed base data for Collins Aerospace gives you a sense of the scope of support required by this diverse group of operators. Collins Aerospace has an installed base of $170 billion, which includes avionics, power systems, and advanced structures on more than 115,000 aircraft. Pratt & Whitney Canada, a key supplier for regional and business jets, contributed to the 5 percent increase in commercial OE sales in Q3 2025.

Here's a quick look at the financial scale tied to these customer groups based on 2024 and 2025 projections:

The total new awards secured in Q3 2025 alone reached $37 billion, showing robust global demand across all customer types. To be fair, the Pratt & Whitney segment's Q4 2024 revenue was $7.57 billion, while Collins Aerospace was $7.5 billion.

Finance: draft 13-week cash view by Friday.

Raytheon Technologies Corporation (RTX) - Canvas Business Model: Cost Structure

You're looking at the sheer scale of investment required to keep Raytheon Technologies Corporation at the forefront of aerospace and defense. The cost structure is dominated by the physical assets and the intellectual capital needed to deliver on that $\mathbf{\$251}$ billion backlog.

High fixed costs from global manufacturing and capital-intensive facilities

The foundation of Raytheon Technologies Corporation's costs rests on its global manufacturing footprint. For the nine months ended September 30, 2025, the Cost of Sales alone reached $\mathbf{\$51,293}$ million. Looking just at the third quarter of 2025, Cost of Sales was $\mathbf{\$17,898}$ million on total sales of $\mathbf{\$22,478}$ million. Capital Expenditures (CapEx) for the third quarter of 2025 were $\mathbf{\$0.6}$ billion. Analysts project that for the full year 2025, CapEx will be in the range of $\mathbf{3.5-4\%}$ of revenue, up from the $\mathbf{3.0-3.5\%}$ range seen between 2020 and 2024.

Significant research and development (R&D) expenditure for future tech

Innovation isn't cheap; it's a mandatory, massive outlay. For the first nine months of 2025, Research and Development expenses totaled $\mathbf{\$2,018}$ million. In the third quarter of 2025 specifically, R&D spend was $\mathbf{\$684}$ million. This investment supports the development of next-generation products across all segments. Raytheon Missiles & Defense, for instance, is planning to increase Coyote production by $\mathbf{93}$ percent in 2025.

Cost of goods sold for complex, low-volume defense systems

The nature of defense contracts-complex, often low-volume, and highly specified-drives up the Cost of Sales relative to commercial volume. The third quarter of 2025 saw Raytheon segment sales of $\mathbf{\$7,045}$ million, with an operating profit of $\mathbf{\$859}$ million. The defense portion of the total backlog stands at $\mathbf{\$103}$ billion as of Q3 2025. The cost structure reflects the complexity of programs like the F135 engine and various missile systems.

Supply chain and raw material procurement costs, including tariff impacts

Supply chain pressures remain a cost factor. In the third quarter of 2025, tariffs alone represented a meaningful headwind, costing the company approximately $\mathbf{\$90}$ million. This impact was noted as being offset by drop-through on higher commercial aftermarket and military volume. The total backlog of $\mathbf{\$251}$ billion requires managing a vast network of suppliers globally.

Labor costs for a large, highly-skilled engineering and production workforce

The human capital required is substantial and highly compensated. Raytheon Technologies Corporation employs approximately $\mathbf{185,000}$ global employees. This workforce demands significant investment in salaries, benefits, and training for specialized engineering and production roles. Selling, General, and Administrative expenses for the third quarter of 2025 were $\mathbf{\$1,436}$ million, contributing to the total costs.

Here's a quick look at the major cost components for the third quarter of 2025:

The overall cost picture for the third quarter of 2025 shows total costs and expenses reached $\mathbf{\$20,018}$ million. This is set against a backdrop of a workforce numbering around $\mathbf{185,000}$ people.

• Total Global Employees: 185,000
• Total Backlog: $251 billion
• Defense Backlog Share: $103 billion
• Interest Expense (Q3 2025): $449 million
• Total Costs and Expenses (Q3 2025): $20.02 billion

Raytheon Technologies Corporation (RTX) - Canvas Business Model: Revenue Streams

You're looking at the top-line picture for Raytheon Technologies Corporation (RTX) as of late 2025. The company has definitely seen demand pick up, leading to an updated full-year expectation. Adjusted sales are projected to land between $86.5 billion and $87.0 billion for Fiscal Year 2025.

A major pillar supporting this forecast is the sales of defense systems and missiles, primarily through the Raytheon segment. This stream benefits directly from escalated geopolitical tensions and increased defense budgets globally. For instance, in the third quarter of 2025, the Raytheon business generated $7.05 billion in quarterly sales, marking a 10 percent year-over-year increase, driven by higher volumes across Patriot, SM-6, and Evolved SeaSparrow Missile programs.

The commercial aftermarket services segment is showing serious strength, which is great for stability. We're seeing growth rates that are definitely in the mid-teens, and sometimes higher. For example, in the second quarter of 2025, commercial aftermarket sales for Collins Aerospace grew by 13 percent, and Pratt & Whitney saw a 23 percent increase in commercial aftermarket revenue for the same period. Earlier in the year, Q1 2025 saw commercial aftermarket sales rise by 21 percent. This is all about parts, repair, and overhauls for an aging global fleet.

To give you a clearer picture of the segment contributions based on the latest reported quarterly figures, here's the revenue breakdown from the third quarter of 2025:

The sales of commercial and military aircraft engines, which fall under Pratt & Whitney, are a significant component, with third quarter 2025 reported and adjusted sales reaching $8,423 million, up 16 percent versus the prior year. Similarly, the sales of avionics and aerospace components from Collins Aerospace contributed $7,621 million in the third quarter of 2025. This latter segment saw its commercial aftermarket revenue grow by 13 percent in that quarter.

You can see the revenue streams are well-diversified, balancing long-term government contracts with the cyclical but currently booming commercial aviation maintenance cycle. The company's total backlog at the end of Q3 2025 stood at a record $251 billion, split between $148 billion commercial and $103 billion defense.

• Adjusted sales target for FY 2025: $86.5 billion to $87.0 billion.
• Pratt & Whitney Q3 2025 Sales: $8.423 billion.
• Collins Aerospace Q3 2025 Sales: $7.621 billion.
• Raytheon Q3 2025 Sales: $7.05 billion.
• Commercial Aftermarket Growth (Q2 2025 Example): 16 percent to 23 percent across segments.