RTX delivered a resilient QQ2 2025, with revenue of $21.58 billion, up 9.4% year over year and 6.3% quarter over quarter, underscoring the resilience of its diversified aerospace and defense portfolio. Gross margin remained solid at approximately 20.3%, and operating margin approached 9.8%, benefiting from operating leverage on higher volumes across Collins Aerospace and Pratt & Whitney. Net income of $1.66 billion drove diluted EPS of $1.22–$1.24, supported by favorable mix and cost discipline, though the company continues to incur meaningful capital expenditure and working capital pressures.
Cash flow remained positive from operations at $458 million in the quarter, but free cash flow was negative by about $72 million, driven by a sizable working capital outflow (-$2.34 billion) and capex of roughly $0.53 billion. RTX maintains a large balance sheet with total debt of $43.6 billion and net debt of about $38.8 billion, alongside cash of $4.78 billion, resulting in a cash ratio near 0.09 and a current ratio just over 1.0. Management commentary emphasized ongoing cost optimization, execution discipline, and a deliberate mix shift toward higher-margin defense programs, while noting that the civil aviation cycle and supply chain dynamics continue to pose near-term headwinds. The earnings backdrop suggests RTX remains well-positioned to benefit from defense budget durability and a gradual normalization of service and after-market revenues, but near-term cash flow and leverage remain pivotal considerations for investors.