RTX (NYSE: RTX), one of the world’s largest defense companies by revenue, is reporting surging orders across both its commercial aerospace and defense divisions.
The company’s revenue climbed 14% year over year to $24.7 billion in the second quarter, reflecting strong demand across its two core business segments.
Non-GAAP adjusted earnings per share rose 21% to $1.89, while free cash flow for the quarter reached $2.9 billion, underscoring the company’s financial strength.
RTX’s backlog, which represents deals signed but not yet delivered or recorded as revenue, surged 22% compared to the prior-year period, reaching $289 billion in total value.
What may surprise some investors is the composition of that backlog, with roughly 60% of the $289 billion attributable to commercial aerospace operations rather than defense contracts.
That translates to approximately $170 billion tied to commercial aerospace and roughly $119 billion coming from the defense side of the business.
Management recently upgraded its adjusted sales estimate for 2026 to a range of $95 billion to $96 billion, meaning the backlog represents approximately three times the company’s projected annual revenue.
That ratio provides RTX with a substantial runway of secured future business, offering rare visibility into long-term revenue streams that most industrial companies cannot match.
The defense segment delivered particularly striking order activity, with Raytheon bookings reaching $19.9 billion for the quarter and producing a book-to-bill ratio of 2.42, a figure that signals demand is growing far faster than current delivery capacity.
Commercial aerospace has historically been viewed as cyclical and unreliable compared to the steady, government-backed revenue of defense contracts, but RTX’s model challenges that conventional wisdom.
Strong commercial aerospace demand has given RTX the financial flexibility to be selective when bidding on defense contracts, allowing the company to walk away from deals it considers unfavorable.
That discipline has allowed RTX to focus on proven defense solutions such as Patriot missiles rather than pursuing higher-risk, novel programs that could weigh on margins and execution timelines.
The two business divisions effectively reinforce each other across varying market conditions, with their combined backlogs helping to secure cash flows and stabilize overall business operations.
Segment operating profit grew 18% year over year, contributing directly to the 21% increase in adjusted earnings per share and reflecting the operational leverage RTX is generating at scale.
With backlog growth continuing to outpace revenue growth, RTX’s forward revenue visibility is becoming one of its most compelling investment characteristics heading into the second half of 2026.
