Q4 2025 RTX Corp Earnings Call Transcript
Key Points
- RTX Corp (RTX) reported strong sales, adjusted EPS, and free cash flow in Q4 2025, with full-year adjusted sales reaching $88.6 billion, up 11% organically.
- The company achieved a record backlog of $268 billion, with a book-to-bill ratio of 1.56, indicating strong demand for its products and services.
- Commercial air travel is expected to grow, with global RPKs projected to increase by around 5% in 2026, supporting further growth in commercial OE and aftermarket segments.
- RTX Corp (RTX) is making significant investments in capacity and technology, with $10 billion invested in CapEx and R&D in 2025, and plans for $10.5 billion in 2026.
- The company is well-positioned to benefit from increased defense spending, with NATO allies and other regions projected to grow their defense budgets significantly over the next five years.
- Higher corporate expenses and a higher effective tax rate partially offset strong segment operating profit growth in Q4 2025.
- The company faces ongoing challenges with tariffs, which impacted Collins' margins by 90 basis points in 2025.
- RTX Corp (RTX) anticipates a $700 million cash outflow related to powder metal compensation in 2026, adding to the $2.8 billion cumulative impact.
- Pratt & Whitney's commercial OE growth is expected to be low single digits in 2026, with a mix headwind affecting top-line growth.
- The company continues to face supply chain challenges, particularly in areas like solid rocket motors and casting suppliers, which could impact production ramp-up.
Good day, ladies and gentlemen, and welcome to the RTX fourth-quarter 2025 earnings conference call. My name is Olivia, and I'll be your operator for today. As a reminder, this conference is being recorded for replay purposes. On the call today are Chris Calio, Chairman and Chief Executive Officer; Neil Mitchill, Chief Financial Officer; and Nathan Ware, Vice President of Investor Relations.
This call is being webcast live on the Internet, and there is a presentation available for download from RTX website at www.rtx.com. Please note, except where otherwise noted, the company will speak to results from continuing operations, excluding acquisition accounting adjustments and net nonrecurring and/or significant items often referred to by management as other significant items.
The company also reminds listeners that the earnings and cash flow expectations and any other forward-looking statements provided in this call are subject to risks and uncertainties. RTX's SEC filings, including its Forms 8-K, 10-Q and 10-K, provide details on
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