RTX Corporation delivered solid Q1 2025 results with a revenue base of $20.31 billion and an operating profit of $2.03 billion, translating to an operating margin of 10.0% and a net margin of 7.56%. The company generated $1.305 billion of operating cash flow and $0.792 billion of free cash flow, supporting a healthy liquidity profile despite a heavy balance sheet. Year-over-year revenue rose ~5.2%, while net income declined ~10.2% on a yearly basis due to mix and tax impacts, with a QoQ improvement in earnings per share of 3.6%. Cash deployment remained disciplined: dividends totaled $0.84 billion and a modest amount of share repurchases occurred alongside ongoing capital expenditure of $0.513 billion, reflecting a balanced approach to shareholder value creation and strategic investment.
From a balance sheet perspective, RTX held $5.16 billion in cash and equivalents and reported total debt of $42.95 billion, yielding a net debt position of about $37.79 billion. The current ratio stood at ~1.01, with a quick ratio of ~0.75 and a cash ratio of ~0.10, signaling adequate liquidity but a working-capital-heavy business model typical of large programs with long cycle times. The company’s leverage metrics remain moderate by defense-prime standards (long-term debt to capitalization ~38.3%; total debt to capitalization ~41.1%), while interest coverage sits around 4.05x, underscoring ongoing obligation management.
Looking ahead, RTX remains exposed to government defense budgets, program execution risk, and the broader cyclicality of both military and commercial aerospace demand. In the absence of formal forward guidance in the provided materials, the key drivers to watch include (1) sustained defense appropriation and program ramp-ups, (2) order intake and backlog evolution, (3) supply-chain cost dynamics and commodity pass-throughs, and (4) cash-flow generation and capital allocation efficiency. Overall, the quarter reinforces RTX’s status as a diversified platform with solid cash generation, but the stock trade-off may reflect higher valuation given growth expectations in a two-speed aerospace cycle.