The U.S. Air Force has awarded Raytheon a $20.7 billion contract for multi-year production of AIM-120 Advanced Medium Range Air-to-Air Missile systems for 16 allied nations through June 2033. The contract covers Australia, Belgium, Canada, Czech Republic, Denmark, Finland, Germany, Italy, Japan, Kuwait, Netherlands, Norway, Poland, Sweden, Taiwan, and the United Kingdom.
What's happening
- Raytheon secured a $20.7 billion multi-year foreign military sales contract from the U.S. Air Force for AIM-120 AMRAAM production.
- The contract extends through June 2033, covering 16 allied nations across Europe, Asia-Pacific and the Middle East.
- Raytheon is qualifying additional European suppliers to support the long-term production demand.
Why it matters
- The contract sustains and locks in AMRAAM production capacity at Raytheon's McKinney, Texas facility across seven years of allied demand.
- Foreign military sales for a single munition platform of this scale create stable, multi-year revenue visibility and reduce production ramp risk.
- Expanding the European supplier base strengthens allied defense industrial capacity and reduces single-source bottlenecks across the supply chain.
Financial impact
- Revenue will be recognized over the contract period through June 2033 as missiles are produced and delivered, timing not disclosed for obligated versus option tranches.
- The $20.7 billion ceiling value establishes substantial backlog for Raytheon's missiles and fire control segment, supporting multi-year cash flow forecasting.
- Effect on gross margin and operating cash flow depends on production ramp rates and supplier qualification costs, which are not disclosed.
The fine print
- Contract value is stated as a ceiling; obligated funds in the first year or tranche are not disclosed.
- Delivery schedules and production rates for individual allied nations are not disclosed.
Source: Defense Daily · Sep 29, 2026 · Drafted with Claude, reviewed by Industrial Base Alpha.
