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]

Financial Data and Key Metrics Changes - For the full year 2025, adjusted sales were $88.6 billion, an increase of $9 billion year-over-year, or 11% organically [3] - Adjusted EPS was $6.29, up 10% year-over-year, and free cash flow was $7.9 billion, an increase of $3.4 billion year-over-year [3] - The company ended 2025 with a book-to-bill ratio of 1.56 and a record backlog of $268 billion, up 23% year-over-year [3] Business Line Data and Key Metrics Changes - Commercial OE sales grew by 10%, commercial aftermarket by 18%, and defense by 8% for the full year [3] - In the fourth quarter, Collins' sales were $7.7 billion, up 3% adjusted and 8% organically, driven by commercial OE and aftermarket [17] - Pratt & Whitney's sales were $9.5 billion, up 25% on both an adjusted and organic basis, with commercial OE sales up 28% [19] - Raytheon's sales were $7.7 billion, up 7% on both an adjusted and organic basis, driven by higher volume on land and air defense systems [20] Market Data and Key Metrics Changes - Global RPKs are projected to increase around 5% in 2026, following a similar growth in 2025 [5] - The defense budgets in the Asia-Pacific and Middle East regions are expected to grow at an average of 3%-4% annually over the next five years [8] Company Strategy and Development Direction - The company aims to invest significantly in capacity and technology, with over $10 billion in CapEx planned for 2026 [11] - The strategic focus includes increasing production rates for key aircraft platforms and enhancing operational efficiencies through digital solutions [10] - The company is positioned to leverage its commercial expertise to support defense transformation initiatives [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in strong demand and operational execution, expecting adjusted sales for 2026 to be between $92 billion and $93 billion, with 5%-6% organic growth [9] - Adjusted EPS for 2026 is projected to be between $6.60 and $6.80, with free cash flow expected to be between $8.25 billion and $8.75 billion [9] - The company anticipates continued margin expansion driven by productivity improvements and cost management [9] Other Important Information - The company invested $2.6 billion in CapEx in 2025, focusing on capacity expansion and technology upgrades [12] - The GTF Fleet Management Plan is on track, with MRO output up 39% in the fourth quarter [31] Q&A Session Summary Question: Update on GTF Fleet Management Plan - Management confirmed that the financial and technical outlook remains on track, with AOG down over 20% from highs in 2025 and MRO output significantly improving [30][31] Question: Thoughts on Defense Capital Deployment - Management acknowledged the importance of their products for national security and emphasized their commitment to ramping production and investing in capacity [32][33] Question: Portfolio Composition and Monetization Opportunities - Management expressed confidence in RTX's ability to meet current and future demands, highlighting the competitive advantages of their scale and technology [36][37] Question: 2026 Guidance for Pratt & Whitney - Management provided insights into expected growth rates for large commercial engine deliveries and emphasized the balance between MRO and new installations [39][40] Question: Raytheon Segment Growth Rates - Management indicated that the majority of sales growth in Raytheon is driven by land and air defense systems, with a strong backlog supporting future growth [46][47]

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 ...

Group 1 - U.S. stock index futures show mixed performance, with Nasdaq futures up 0.63% and S&P 500 futures up 0.25%, while Dow futures are down 0.44% [1] - Major European indices also display mixed results, with Germany's DAX down 0.09%, UK's FTSE 100 up 0.35%, France's CAC up 0.37%, and the Euro Stoxx 50 up 0.28% [1] - The Federal Reserve officials expect to pause interest rate cuts this week, with an unclear path for future cuts [1] Group 2 - Samsung Electronics and SK Hynix are negotiating with Apple to significantly increase the price of LPDDR memory used in iPhones, with a potential increase of up to 100% [2] Group 3 - The European Union has initiated two compliance procedures to ensure Google meets its obligations under the Digital Markets Act [3] Group 4 - Microsoft has received approval to build 15 additional data centers in Wisconsin, USA [4] Group 5 - Micron Technology is investing $24 billion to expand production in Singapore to address AI chip shortages [5] - Synopsys CEO anticipates that the price increase and shortage of memory chips will persist until 2027 [5] Group 6 - Nike is reportedly planning to lay off 775 employees to enhance profitability and accelerate automation [6] Group 7 - Alibaba has officially launched its flagship reasoning model Qwen3-Max-Thinking, which is noted for its stronger initiative and proficiency in logical reasoning [7] Group 8 - XPeng Motors' CEO expects "very strong" growth this year, with overseas sales growth potentially surpassing that of the domestic market [8] Group 9 - VinFast is collaborating with AI company Autobrains to develop autonomous driving technology [9] Group 10 - The U.S. Treasury has terminated its contract with consulting firm Booz Allen, related to the leak of tax records for Trump and Musk [10] Group 11 - UnitedHealth reported Q4 revenue of $113.215 billion, with adjusted EPS down 69.02% year-over-year to $2.11 [11] - General Motors reported Q4 revenue of $45.29 billion, with a loss of $3.31 billion; the company approved a $6 billion stock buyback plan [12] - American Airlines reported Q4 adjusted EPS of $0.16, which was below expectations, and anticipates a revenue decrease of $150 million to $200 million due to winter storms [13] - Raytheon Technologies reported a 12% year-over-year increase in Q4 sales to $24.24 billion, with adjusted EPS of $1.55, exceeding expectations [14]

Core Viewpoint - The defense and aerospace company reported better-than-expected earnings and sales for the fourth quarter [1] Financial Performance - The company achieved higher earnings than analysts' expectations for the fourth quarter [1] - Sales figures also surpassed forecasts, indicating strong demand in the defense and aerospace sectors [1]

Core Insights - RTX reported higher sales in the fourth quarter, driven by strong demand for munitions and missiles, indicating robust market conditions and potential for future growth [1] Company Performance - The company experienced increased sales in the fourth quarter, attributed to ongoing demand for its products [1] - RTX has provided guidance for continued growth in the upcoming year, suggesting confidence in its market position and operational strategy [1]

Core Insights - Aerospace and defense giant RTX reported an increase in fourth-quarter revenue and profit, attributed to higher sales in its engines and robust demand for commercial aircraft maintenance and repairs [1] Group 1: Financial Performance - The company experienced a rise in fourth-quarter revenue and profit, indicating strong financial performance [1] Group 2: Sales Drivers - The increase in revenue was primarily driven by a surge in sales for its engines [1] - There was also a strong appetite for commercial aircraft maintenance and repairs, contributing to the overall sales growth [1]

Financial Performance - RTX reported fourth quarter 2025 sales of $24.2 billion, up 12% year-over-year, and full year sales of $88.6 billion, up 10% year-over-year[6][9] - GAAP EPS for Q4 2025 was $1.19, reflecting an 8% increase from $1.10 in Q4 2024, while full year GAAP EPS was $4.96, up 40% from $3.55[9][6] - Adjusted EPS for Q4 2025 was $1.55, a 1% increase from the prior year, and full year adjusted EPS was $6.29, up 10% year-over-year[6][9] - Net sales for Q4 2025 reached $24,238 million, a 12% increase from $21,623 million in Q4 2024[28] - Operating profit for Q4 2025 was $2,596 million, up 23% from $2,111 million in Q4 2024[28] - Net income attributable to common shareholders for Q4 2025 was $1,622 million, compared to $1,482 million in Q4 2024, reflecting a 9% increase[28] - Basic earnings per share (EPS) for Q4 2025 was $1.21, up from $1.11 in Q4 2024, representing a 9% growth[28] - Consolidated net sales for the quarter ended December 31, 2025, reached $24,238 million, an increase from $21,623 million in the same quarter of 2024, representing a growth of 7.5%[29] - Operating profit for the total segments was $3,060 million for the quarter ended December 31, 2025, compared to $2,434 million in the same quarter of 2024, reflecting a year-over-year increase of 25.6%[29] - Net income for the twelve months ended December 31, 2025, was $7,069 million, significantly higher than $5,013 million for the same period in 2024, representing a growth of 40.9%[31] - Total adjusted net sales for the twelve months ended December 31, 2025, reached $88,603 million, a 9.0% increase from $80,738 million in 2024[33] Cash Flow and Liquidity - Operating cash flow for Q4 2025 was $4.2 billion, with free cash flow of $3.2 billion, representing a 549% increase from $492 million in Q4 2024[9][8] - Free cash flow for the quarter ended December 31, 2025 was $3,195 million, a significant increase from $492 million in the same quarter of 2024[38] - For the twelve months ended December 31, 2025, free cash flow reached $7,940 million, compared to $4,534 million in 2024, reflecting a year-over-year growth of 75%[38] - The company reported a net cash flow from operating activities of $4,165 million for the quarter ended December 31, 2025, compared to $1,561 million in the same quarter of 2024, indicating a substantial increase of 167.5%[31] - The company reported net cash flows from operating activities of $10,567 million for the twelve months ended December 31, 2025, up from $7,159 million in 2024[38] Segment Performance - Collins Aerospace reported Q4 2025 sales of $7.736 billion, up 3% year-over-year, driven by a 9% increase in commercial OE and a 13% increase in commercial aftermarket[11][12] - Pratt & Whitney's Q4 2025 sales were $9.496 billion, a 25% increase year-over-year, supported by a 28% rise in commercial OE and a 30% increase in military sales[16][17] - Raytheon reported Q4 2025 sales of $7.657 billion, up 7% year-over-year, driven by higher volume in land and air defense systems[18][19] - Collins Aerospace segment reported net sales of $7,736 million for the quarter, an increase from $7,537 million in the same quarter of 2024[32] - Pratt & Whitney segment net sales increased to $9,496 million from $7,569 million year-over-year, reflecting a growth of 25.5%[32] - Raytheon segment net sales were $7,657 million, up from $7,157 million in the same quarter of 2024, marking a 7.0% increase[32] Guidance and Future Outlook - For full year 2026, RTX expects adjusted sales between $92.0 billion and $93.0 billion, with organic sales growth projected at 5% to 6%[6] - Adjusted EPS guidance for 2026 is estimated to be between $6.60 and $6.80, with free cash flow expected to be between $8.25 billion and $8.75 billion[6] - The company anticipates continued growth in adjusted net sales and operating profit, although specific forward-looking guidance is subject to variability[25] Costs and Expenses - The total costs and expenses for Q4 2025 were $21,948 million, an increase from $19,770 million in Q4 2024[28] - Interest expense for Q4 2025 was $400 million, down from $486 million in Q4 2024, indicating improved cost management[28] - Research and development expenses for Q4 2025 were $789 million, slightly down from $808 million in Q4 2024[28] Strategic Initiatives - The company is focused on strategic initiatives such as digital transformation and operational efficiency to enhance future performance[25] - The company’s backlog reached $268 billion, with $161 billion in commercial and $107 billion in defense[6] Balance Sheet Highlights - Cash and cash equivalents increased to $7,435 million as of December 31, 2025, up from $5,578 million a year earlier, marking a growth of 33.3%[30] - Total assets rose to $171,079 million as of December 31, 2025, compared to $162,861 million in 2024, indicating an increase of 5.5%[30] - Total current liabilities increased to $58,784 million as of December 31, 2025, from $51,499 million in 2024, reflecting a rise of 14.2%[30] - Total liabilities amounted to $103,941 million as of December 31, 2025, up from $100,903 million in 2024, which is an increase of 2.0%[30] - The company’s total equity increased to $67,102 million as of December 31, 2025, compared to $61,923 million in 2024, representing a growth of 8.4%[30] Non-Recurring Items - The company incurred a net pre-tax charge of approximately $0.1 billion related to a customer bankruptcy at Pratt & Whitney for the twelve months ended December 31, 2025[45] - A pre-tax gain of $0.1 billion was recorded for the sale of the Simmonds Precision Products business at Collins during the quarter ended December 31, 2025[45] - The twelve months ended December 31, 2025 included a non-cash pre-tax pension settlement charge of $0.3 billion related to a buy-out conversion of a group annuity contract[46]

Core Insights - RTX delivered strong sales, adjusted EPS, and free cash flow in 2025, with expectations for continued growth in 2026 [3][4][7] Financial Performance - Fourth quarter 2025 reported and adjusted sales were $24.2 billion, up 12% from the previous year, with GAAP EPS of $1.19 and adjusted EPS of $1.55, up 1% [4][7] - Full year 2025 sales reached $88.6 billion, a 10% increase year-over-year, with adjusted EPS of $6.29, up 10% [7][9] - Operating cash flow for Q4 was $4.2 billion, leading to free cash flow of $3.2 billion, a significant increase from $492 million in the prior year [5][9] Segment Performance - Collins Aerospace reported Q4 sales of $7.736 billion, a 3% increase, with operating profit up 27% to $1.402 billion [10][11] - Pratt & Whitney saw Q4 sales of $9.496 billion, a 25% increase, with operating profit rising 53% to $773 million [12][13] - Raytheon achieved Q4 sales of $7.657 billion, a 7% increase, with operating profit up 7% to $885 million [14][15] 2026 Outlook - The company anticipates adjusted sales between $92.0 billion and $93.0 billion for 2026, with organic sales growth projected at 5% to 6% and adjusted EPS expected between $6.60 and $6.80 [7][9]

Core Insights - RTX Corporation is a key player in the aerospace and defense sector, with an upcoming quarterly earnings report expected to show an EPS of $1.46 and revenue of approximately $22.7 billion [1][6] Group 1: Financial Performance - Analysts predict a 5.2% year-over-year decrease in RTX's EPS, while revenues are expected to increase by 5.2% to $22.7 billion [4][6] - The consensus EPS estimate has been revised upward by 1.3% over the last 30 days, indicating potential positive investor sentiment [4][6] - RTX's stock has seen a 6% increase over the past month, outperforming both the Zacks S&P 500 composite and the Zacks Aerospace - Defense industry [5] Group 2: Market Positioning - The company has secured significant contracts, particularly with the FAA, enhancing its revenue visibility in the aerospace domain [2] - RTX's engagement in the commercial aerospace market provides diversification, contributing to stable revenue streams [3] - The company's extensive product portfolio positions it favorably within the current market dynamics, especially amid rising demand for sophisticated military systems due to global geopolitical tensions [2][3] Group 3: Valuation Metrics - RTX trades at a marginally lower price-to-book valuation compared to General Dynamics, with a P/E ratio of approximately 39.83 [3][5] - The company's debt-to-equity ratio stands at approximately 0.63, indicating a moderate level of debt relative to its equity [5]