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- **Revenue Beat**: $22.5B Q3 sales (+12% YoY), with 13% organic growth across all segments. Full-year outlook raised to $86.5-87B (+8-9% organic).
- **Profit Expansion**: Adjusted EPS guidance raised to $6.10-6.20, driven by 19% segment profit growth and 700bps margin expansion.
- **Defense Strength**: $251B backlog (+13% YoY), 1.63 book-to-bill ratio, with $8B munitions orders and $37B new awards.
- **GTF Momentum**: Pratt's GTF MRO output expected to grow 30% in 2025, supported by 29% year-over-year casting growth.
- **Cash Flow**: Free cash flow of $4B in Q3, on track for $7-7.5B annually. 2026 targets 90-100% conversion of operating profit to free cash flow.

**【CEO Summary Section】**
- **Revenue Growth**: Adjusted sales of $22.5 billion (+12% year-over-year), driven by 13% organic growth across all segments. Commercial OE, aftermarket, and defense each saw double-digit growth.
- **Segment Profit**: Adjusted segment operating profit of $2.8 billion (+19% YoY), with 700 basis points of margin expansion. Free cash flow reached $4 billion, on track for $7-7.5 billion annually.
- **Strategic Priorities**: Continued focus on AI-driven productivity, with examples like Raytheon's AMRAAM program doubling output year-to-date. Pratt's GTF MRO output expected to grow 30% in 2025, supported by material flow improvements.
- **Backlog Strength**: $251 billion backlog (+13% YoY), with 1.63 book-to-bill ratio. Defense bookings include $8 billion for munitions, while commercial orders reflect strong aftermarket demand.

**【CFO Financial Commentary】**
- **Top Line**: Full-year sales outlook raised to $86.5-87 billion (+8-9% organic growth), driven by commercial aftermarket (+mid-teens), OE (+10%), and defense (+mid-single digits).
- **Bottom Line**: Adjusted EPS raised to $6.10-6.20 (+$0.30 low end, $0.25 high end), reflecting $0.20 segment profit improvement and tax benefits. Free cash flow guidance maintained at $7-7.5 billion.
- **Tariff Impact**: $0.12 EPS benefit from tax reorganizations offset $0.04 headwind from new legislation. Full-year tariff impact remains unchanged.

**【Q&A Highlights】**
- **GTF Engine Deliveries**: Pratt on track for 30% MRO output growth in 2025, with record Gate 3 starts. Collins' 737 and 787 production ramps align with Boeing's rate increases.
- **Raytheon Margins**: 12%+ segment margin expansion driven by international programs (44% of backlog) and productivity gains. $75 million year-to-date net productivity improvements.
- **Tariff Mitigation**: Collins and Pratt seeing $90 million/year tariff headwinds, partially offset by USMCA reexports and pricing. Full-year negative engine margin headwind remains $150-200 million.
- **Free Cash Flow**: 2025 guidance ($7-7.5B) includes $2.9B debt paydown. 2026 outlook targets 90-100% conversion of operating profit to free cash flow, supported by declining powder metal compensation payments.

RTX Corporation (RTX) Q3 2025 Earnings Call Transcript

Revenue

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Financing Services Revenue

Other Revenue

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Cost of Financing Services

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Operating Expenses

Selling, General and Administrative Expenses

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RTX

RTX fundamentals

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