RTX's Raytheon won a five-year AMRAAM production contract valued at up to $20.7 billion, including two option years. The award targets at least 1,900 missiles annually to supply the U.S. Air Force, Navy and 44 allied nations.
What's happening
- Raytheon secured a five-year AMRAAM contract worth up to $20.7B with two option years from the U.S. Air Force and Navy.
- The award targets annual production of at least 1,900 missiles, reflecting nearly doubled 2025 output versus 2024.
- AMRAAM is fielded by 44 countries across 14 platforms and has recorded more than 7,000 successful live firings in testing and combat.
- Raytheon is investing significantly in workforce, supply chain and manufacturing facilities and working with hundreds of small and midsize U.S. suppliers.
Why it matters
- The contract locks in record production rates to sustain U.S. air combat and NASAMS air defense inventory for the Pentagon and allied air forces.
- Raytheon's capacity expansion supports the industrial base by scaling domestic manufacturing and engaging hundreds of small and midsize suppliers.
- Long-term demand visibility from 44 allied nations provides production stability and justifies capital investment in facilities and automation.
- The contract positions AMRAAM as the primary beyond-visual-range air-to-air interceptor across NATO and partner nations facing peer threats.
Going deeper
- AMRAAM's fifth-generation variant features upgraded processors allowing software changes to address evolving threats without hardware redesign.
- Raytheon is exploring international co-production arrangements, signaling potential transfer or licensing of manufacturing to allied nations.
- The missile serves dual roles in air-to-air combat and as the primary interceptor in NASAMS ground-based air defense systems.
Financial impact
- Revenue will be recognized over the five-year initial contract term plus two option years; timing and year-by-year obligated funds not disclosed.
- The $20.7B ceiling value represents maximum contract value including options; obligated funds for the first order are not specified.
- Raytheon's capex will increase in 2026 and 2027 to fund workforce expansion, supply chain infrastructure and manufacturing facility upgrades to support the 1,900-missile annual rate.
The fine print
- Contract value of $20.7B is the maximum across the initial five-year term and two option years; actual obligated funds per fiscal year not stated.
- Raytheon's statement references 'up to' $20.7B, indicating the full ceiling will only be realized if all options are exercised and production targets sustained.
Source: defence-industry.eu · Sep 28, 2026 · Drafted with Claude, reviewed by Industrial Base Alpha.
