How RTX Corporation Makes its Money: Revenue Breakdown
A breakdown of RTX Corporation (RTX) financials. See how RTX Corporation makes money from Collins Aerospace, Pratt & Whitney, Raytheon using their 2024 annual report.
How Does RTX Corporation Make its Money?
RTX Corporation (formerly Raytheon Technologies) is one of the world’s largest aerospace and defense companies, formed in 2020 from the merger of Raytheon Company and United Technologies’ aerospace businesses. The company operates through three segments: Collins Aerospace (avionics and aircraft systems), Pratt & Whitney (jet engines), and Raytheon (missiles, defense electronics, and cybersecurity). RTX serves both commercial aerospace and government defense customers worldwide.
RTX Corporation (RTX) Business Model
RTX Corporation Competitors
RTX Corporation’s key competitors and comparable public companies in the aerospace & defense sector include Lockheed Martin, Boeing, Northrop Grumman, and GE Aerospace. Each of these companies competes for market share, investor attention, and revenue in overlapping segments. See how RTX Corporation stacks up by comparing their revenue breakdown, margins, and growth metrics.
Revenue Breakdown
| Segment | 2024 | 2023 | YoY Growth |
|---|---|---|---|
| Collins Aerospace | $27,400 | $23,800 | +15.1% |
| Pratt & Whitney | $28,100 | $23,200 | +21.1% |
| Raytheon | $25,200 | $21,900 | +15.1% |
| Total Revenue | $80,700 | $68,900 | +17.1% |
Collins Aerospace — 34% of Revenue
Avionics, aircraft interiors, mission systems, mechanical systems, and power & controls for commercial and military aircraft. Revenue grew 15.1% to $27.4 billion in 2024, driven by the commercial aerospace recovery and growing defense budgets. Collins Aerospace is the world’s largest provider of aviation electronics and aircraft systems — its products are in virtually every commercial and military aircraft flying today, including flight management systems, communication and navigation equipment, cockpit displays, landing gear, environmental control systems, aircraft lighting, and cabin interior products.
The financial model follows the aerospace “razor-and-blade” pattern: Collins sells original equipment (OE) systems to Boeing, Airbus, and military aircraft manufacturers at modest margins, then generates high-margin aftermarket revenue from maintenance, repair, and overhaul (MRO) services and spare parts for the installed base over the aircraft’s 25-30 year lifespan. Aftermarket revenue carries significantly higher margins (30%+) than OE sales, and the growing global aircraft fleet drives sustained aftermarket demand. Collins Aerospace is also a leading defense electronics provider, supplying mission computers, sensors, electronic warfare systems, and communication equipment to the US military and allied forces.
Pratt & Whitney — 35% of Revenue
Commercial and military jet engines, including the GTF (Geared Turbofan) family powering narrow-body aircraft (A320neo, A220, Embraer E-Jets), the F135 engine for the F-35 Joint Strike Fighter, and legacy large commercial engines. Revenue surged 21.1% to $28.1 billion in 2024, reflecting strong GTF engine deliveries and aftermarket revenue growth as the global airline fleet expands. Pratt & Whitney is one of only two Western manufacturers of large commercial turbofan engines (the other being GE Aerospace through CFM International and its widebody engines).
The GTF engine, which uses a geared architecture to decouple the fan from the core turbine, delivers 16-20% fuel savings compared to prior-generation engines. This technology has won massive market share on the Airbus A320neo family, making GTF-powered A320neos the most-ordered commercial aircraft in history. However, Pratt & Whitney has faced a significant operational challenge: a powdered metal contamination issue in certain GTF engine discs requires accelerated inspections and shop visits, leading to aircraft groundings and substantial warranty costs. The resolution of this issue — inspecting and remediating the affected engines without disrupting airline operations — is one of the most closely watched stories in aerospace.
Raytheon — 31% of Revenue
Missiles, missile defense systems, radars, sensors, electronic warfare, cybersecurity, and command-and-control systems for the US Department of Defense and allied governments worldwide. Revenue grew 15.1% to $25.2 billion in 2024, driven by rising global defense budgets, replenishment of weapons inventories depleted by the Russia-Ukraine conflict, and growing demand for integrated air and missile defense systems. Raytheon produces some of the most critical weapons systems in the Western arsenal: Patriot air defense, Stinger and Javelin missiles, Standard Missile (SM-2, SM-3, SM-6) for naval defense, AMRAAM air-to-air missiles, Tomahawk cruise missiles, and the next-generation LTAMDS radar system.
The Russia-Ukraine conflict has fundamentally changed the defense spending environment — NATO allies have committed to increasing defense budgets to 2%+ of GDP, and the US is accelerating investment in missile defense, munitions production capacity, and space-based systems. Raytheon’s backlog has grown significantly as nations rearm and modernize their defense capabilities. Cybersecurity and intelligence services provide recurring revenue from classified government contracts.
RTX Corporation (RTX) Income Statement
| Metric | 2024 | 2023 |
|---|---|---|
| Total Revenue | $80,700 | $68,900 |
| Cost of Revenue | $65,500 | $56,400 |
| Gross Profit | $15,200 | $12,500 |
| Operating Expenses | $8,200 | $10,300 |
| Operating Income | $7,000 | $2,200 |
| Net Income | $4,000 | $-700 |
All values in millions USD unless otherwise stated.
Financial data sourced from RTX Corporation SEC Filings.
RTX Corporation (RTX) Key Financial Metrics
- Gross Margin: 18.8%
- Operating Margin: 8.7%
- Revenue Growth: 17.1%
Is RTX Corporation Profitable?
Yes, RTX returned to solid profitability in 2024 after a difficult 2023. The 18.8% gross margin is standard for a diversified aerospace & defense company that includes both lower-margin engine manufacturing (Pratt & Whitney) and higher-margin services and electronics (Collins, Raytheon). The 8.7% operating margin represented a dramatic recovery from 2023’s 3.2% margin, which was depressed by $5.6 billion in charges related to the Pratt & Whitney GTF engine powder metal issue and other one-time items. Net income swung from a $700 million loss in 2023 to a $4.0 billion profit in 2024. Revenue growth of 17.1% was strong across all three segments, driven by commercial aerospace recovery, defense backlog conversion, and aftermarket demand. RTX’s massive defense backlog ($200B+ total company) provides multi-year revenue visibility, while the growing installed base of GTF engines promises decades of high-margin aftermarket revenue.
RTX Corporation (RTX): What to Watch
- Pratt & Whitney GTF engine inspection and remediation progress — The powder metal contamination issue requires inspecting and potentially replacing discs in thousands of GTF engines. The pace of inspections, aircraft-on-ground (AOG) counts, and warranty cost trajectory are the most closely watched operational metrics.
- Defense backlog conversion and margin improvement — RTX’s defense backlog exceeds $200 billion. The ability to convert this backlog into revenue while expanding margins through operational efficiency and fixed-price contract performance is critical.
- Commercial aerospace aftermarket growth — Collins Aerospace and Pratt & Whitney aftermarket revenue grows as the global commercial fleet expands and ages. Aftermarket is the highest-margin business for both segments.
- Free cash flow recovery — RTX’s free cash flow has been depressed by GTF-related warranty payments and heavy capital investment. The trajectory back toward $7-8 billion+ in annual free cash flow generation is key for shareholder returns.
- Global defense spending trends — NATO allies increasing budgets to 2%+ of GDP, AUKUS partnership activities, and the broader geopolitical environment drive long-term demand for Raytheon’s missiles, radars, and defense electronics.
RTX Corporation (RTX) Financial Summary
RTX Corporation is one of the world’s largest aerospace and defense companies, operating Collins Aerospace (34%, avionics and aircraft systems), Pratt & Whitney (35%, jet engines including GTF), and Raytheon (31%, missiles, defense electronics, and cybersecurity). Revenue grew 17.1% to $80.7 billion in 2024, with all three segments accelerating — Collins and Raytheon each growing 15.1% and Pratt & Whitney surging 21.1%. Net income recovered to $4.0 billion from a $700 million loss in 2023 (which included $5.6 billion in GTF engine charges). The 18.8% gross margin and 8.7% operating margin reflect normalized operations, and RTX’s $200B+ defense backlog provides exceptional long-term revenue visibility. The key near-term overhang is the ongoing Pratt & Whitney GTF powder metal remediation program.
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