RTX · Q2 2026 Earnings

Bullish

RTX Corporation

Reported July 23, 2026

30-second summary

Q2 revenue grew 14.5% to $24.71B (16% organic) with all three segments printing double-digit growth and free cash flow of $2.88B, and management raised the FY2026 organic growth guide to 8–9% (from 5–6%), revenue to $95.0–$96.0B (from $92.5–$93.5B), adjusted EPS to $7.10–$7.25 (from $6.70–$6.90), and free cash flow to $8.50–$8.75B (from $8.25–$8.75B) — the raise that follows Q1's defense-only upgrade. Adjusted EPS printed $1.89 (+21% YoY), backlog reached $289B (+22% YoY), and Raytheon grew +18%. The organic band raise of 3 full points is unusually large for a mid-year revision at a $95B-revenue company — this is the H1 outperformance dropping through and the FY assumption itself being re-underwritten.

Headline numbers

EPS

Q2 FY2026

$1.89

+13.9% vs est.

Revenue

Q2 FY2026

$24.71B

+14.5% YoY

+8.0% vs est.

Gross margin

Q2 FY2026

20.8%

Free cash flow

Q2 FY2026

$2.88B

Operating margin

Q2 FY2026

11.4%

Key financials

Q2 FY2026

Metric	Q2 FY2026	Q2 FY2025	YoY	Q1 FY2026	QoQ
Revenue	$24.71B	$21.58B	+14.5%	$22.08B	+11.9%
EPS	$1.89	$1.56	+21.2%	$1.78	+6.2%
Gross margin	20.8%	20.2%	+60bps	20.9%	-10bps
Operating margin	11.4%	9.9%	+150bps	11.6%	-20bps
Free cash flow	$2.88B	$-0.07B	+4097.2%	$1.31B	+119.9%

Guidance

RTX substantially raises full-year FY2026 guidance across revenue, EPS, and organic growth following a strong Q2 beat, with revenue raised ~2.7% and organic growth expectations increased 3 points to 8–9%.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Revenue	FY 2026	$92.5 - $93.5 billion	$95.0 - $96.0 billion	+$2.5B at low end, +$2.5B at high end	Raised
EPS	FY 2026	$6.70 - $6.90	$7.10 - $7.25	+$0.40 at low end, +$0.35 at high end	Raised
Free Cash Flow	FY 2026	$8.25 - $8.75 billion	$8.50 - $8.75 billion	+$0.25B at low end, flat at high end	Raised
Organic Sales Growth	FY 2026	5% to 6%	8% to 9%	+3 percentage points at both low and high end	Raised

Segment KPIs

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
Collins Aerospace	$8.21B	$7.622B	+7.7%
Pratt & Whitney	$8.889B	$7.631B	+16.5%
Raytheon	$8.269B	$7.001B	+18.1%

Other KPIs

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
Backlog	$289B	$236 billion	—
Commercial Backlog	$170B	—	—
Defense Backlog	$119B	—	—
Organic Sales Growth	16%	—	—
Collins Aerospace Adjusted Operating Margin	16.7%	16.4%	—
Pratt & Whitney Adjusted Operating Margin	8.3%	8.0%	—
Raytheon Adjusted Operating Margin	12.6%	11.6%	—
Free Cash Flow	$2.9B	—	—

Management tone

Narrative arc: Tariff defense (Q2 2025) → Backlog execution and operational scale-up (Q3 2025) → Multi-year industrial expansion thesis (Q4 2025) → Defense-led FY raise (Q1 2026) → Full re-underwriting of the growth trajectory (Q2 2026).

The FCF confidence gap that persisted through prior quarters finally closed this quarter. Through Q1 2026 management raised sales and EPS while maintaining (not raising) the FCF guide — a signal that operating leverage and cash conversion were tracking on different curves. This quarter that gap closed: the FCF low end lifted $0.25B alongside the sales and EPS raises, framed in the press release as: "Given our first half performance and current backlog, we are raising our full year outlook for adjusted sales, adjusted EPS, and free cash flow." The signal is that cash generation is now moving with earnings, not lagging it.

The demand narrative shifted from defense-led to broad-based for the first time since the multi-year cycle began. Q1 was explicitly a defense-only raise ("the increase at Raytheon"). This quarter Raytheon's +18% is the headline, but Pratt at +16.5% and Collins at +13% organic mean the organic band raise to 8–9% is being carried by all three segments simultaneously. The press release language — "Demand remains robust, and our backlog is up 22 percent year over year" — is notably less segment-specific than Q1's defense framing, converting a defense-led thesis into a whole-portfolio thesis.

Productivity and capacity moved from cost-side story to growth lever. The updated qualitative statement — "RTX is exceptionally well positioned to drive continued growth as we execute on our backlog, increase productivity, expand capacity, and introduce new technologies to our customers" — names productivity and capacity as growth drivers alongside backlog execution. This is a continuation of the Q4 2025 industrial-expansion thesis but with a sharper operating-leverage read: the EPS midpoint raise of 5.5% running ahead of the 2.7% revenue midpoint raise is the mechanical evidence that operating leverage is now showing up in the guide, not just aspiration.

Answers to last quarter's watch list

Whether the headline organic growth band gets raised in Q2 — Directly resolved. H1 organic came in at 13% consolidated, and management raised the headline band by 3 full points to 8–9% from 5–6%.

Resolved positively

Framework agreement finalization and dollar quantification — Not addressed in the press release. No named customers, dollar values, or contract durations attached to the framework language from Q1.

Continue monitoring

Pratt segment margin trajectory — Q2 Pratt adjusted margin at 8.3%, +30 bps YoY but a sequential step-down from a Q1 print implied near 8.7% by the H1 8.5% average. Revenue accelerated but margin did not step up sequentially — the H2 inflection needed to validate the FY 1–2 point aftermarket expansion thesis is now more concentrated in Q3/Q4. Status: Continue monitoring, with elevated urgency.

Collins margin sustainability at 17%+ — Q2 Collins adjusted margin at 16.7%, +30 bps YoY but below the H1 six-month average of 16.9%, which implies a Q1 print in the low 17s. Status: Resolved mixed — YoY expansion held, but the segment did not sustain at 17%+ in Q2.

FCF cadence vs. FY guide — H1 FCF of $4.19B against the raised $8.50–$8.75B guide implies $4.31–$4.56B needed in H2, a modest sequential step-up rather than a heavy ramp.

Resolved positively

IEEPA tariff refunds — Not called out in the press release. No indication that refund income has been recognized or included in the raised guide.

Not resolved

What to watch into next quarter

Pratt margin sequential trajectory into Q3 — Q2 margin sequentially softer despite +16.5% revenue growth is the single most important execution signal for the FY thesis. Watch whether Q3 delivers Pratt adjusted margin at or above 9.0% — below that, the FY 1–2 point aftermarket margin expansion narrative comes under pressure and the EPS guide's operating-leverage assumption weakens.

Whether the headline organic band gets raised a second time — H1 organic ran at 13% against a new FY guide of 8–9%. If Q3 organic prints above 8%, watch for a second Q3 raise of the headline band or the emission of an implicit H2 conservatism read.

Collins margin recovery toward the Q1 anchor — H1 margin averaged 16.9%; Q2 came in at 16.7%. Watch whether Q3 stabilizes at or above 17% or continues to drift lower — the latter would suggest divestiture and mix drag are structural rather than transitional.

Framework agreement dollar quantification — the qualitative multi-decade defense agreements referenced in Q1 have now had two quarters to move to dollar values. Watch whether Q3 attaches customer names or contract durations, converting a tone shift into a backlog event.

FCF high-end raise in Q3 — the FY FCF high end held at $8.75B this quarter (only the low end moved). If Q3 FCF exceeds $3.0B, the high end becomes stale and Q3 will likely raise the top of the FCF range.

Sources

RTX Corporation Q2 FY2026 Earnings Press Release (Form 8-K Exhibit 99), SEC EDGAR, July 23, 2026.

Get the next brief, free.

We publish analyst-grade earnings briefs the same day or morning after every call — headline numbers, segment KPIs, Q&A highlights, and tone analysis. Free during beta.

This is not investment advice.