RTX’s Raytheon division has received a multiyear U.S. Navy contract worth up to $24.4 billion to produce Standard Missile-6, or SM-6, systems. The agreement comes as the Pentagon works to replenish weapons inventories depleted by conflicts in the Middle East and strengthens the link between U.S. defense spending and demand for advanced missile systems.

Five-Year Contract Includes Extension Options

The initial contract runs for five years and includes two additional option years. Its goal is to provide the U.S. Navy with a stable and reliable supply of SM-6 missiles as the United States seeks to increase ammunition production and strengthen its defense industrial base.

The SM-6 is a multi-mission missile designed for both offensive and defensive operations. According to Raytheon, the system has demonstrated capabilities against airborne and surface targets as well as ballistic missile threats. The missile has been successfully launched from multiple U.S. Navy ships and land-based launchers.

RTX Benefits From Broader Defense Spending Growth

The new agreement is part of a wider series of large weapons contracts being pursued by the Pentagon in 2026 as the U.S. seeks to encourage defense manufacturers to increase production capacity. In late September, Raytheon received a temporary multiyear agreement worth $20.7 billion for AMRAAM missile production, while Lockheed Martin received a $58.6 billion contract in July for Patriot interceptor production.

Raytheon has already invested in expanding its skilled workforce, strengthening partnerships with defense-industry suppliers and automating manufacturing processes. The company is seeking to significantly increase output to meet demand in both the near and longer term.

Congressional Funding Remains a Key Factor

Despite the expansion in contract volumes, uncertainty remains over how quickly production capacity can be increased. Industry officials have warned that Congress has not yet approved all of the funding required for the new agreements. This could limit manufacturers’ ability to make large-scale investments in factories, workforce expansion and component supply.

For RTX, the new contract provides significant visibility into SM-6 demand and adds to the company’s growing missile-system backlog. The company has said the SM-6 agreement will support an annual production rate of more than 500 missiles. Investors will monitor congressional funding, the pace of production expansion and RTX’s ability to convert stronger demand into revenue and cash flow over the life of the contract.