Raytheon's $24.4 billion SM-6 order sets a multi-year production rate for the Navy

The order fixes a production rate for the Navy's main multi-mission interceptor for the rest of the decade. That rate decides how fast the fleet refills magazines drained by combat in 2026. It also keeps Raytheon as the supplier for years [6][11]. One thing is still unknown: the funded value. The contract needs appropriations Congress has not passed [6].

Maritime Executive reported the 1 October award at up to $25 billion. The two accounts of the headline value differ [6][11].

What the Navy is buying

SM-6 covers anti-air warfare, anti-surface warfare and ballistic missile defense. It fires from Navy ships and land-based launchers [11]. Raytheon describes it as the only combat-proven weapon that performs all three missions [11].

The FY2025 budget request priced one SM-6 at roughly $6 million for procurement alone. The Congressional Budget Office estimates $4 million [6]. On either figure the award implies a production rate many times higher than the previous 125-unit-per-year contracts, Maritime Executive reported [6]. Neither Raytheon nor the Navy has said how many missiles the $24.4 billion buys [11].

Adm. Daryl Caudle, the Chief of Naval Operations, cast the deal as a demand signal. "This SM-6 award gives industry the demand signal and stability to expand production," he said in a statement [6].

The award builds on earlier Raytheon agreements with the Department of War, according to scanx.trade [11].

The bill behind the order

The order answers a specific hole. CBO estimated that operations against Iran cost about $38 billion through 1 August, including $21.7 billion to replace expended munitions [7]. Of that, $13.1 billion covered missile defense interceptors: Patriot, THAAD, SM-3 and SM-6. Another $7.3 billion covered land-attack cruise missiles including Tomahawks [7].

CBO also estimated the US has probably used between one-half and two-thirds of its inventory of those high-end interceptors since June 2025 [6]. A July assessment from the Center for Strategic and International Studies put Patriot inventories below 1,000 interceptors and THAAD at approximately 250 [7]. Those researchers warned that depleted stockpiles could threaten American readiness in a confrontation with China [7]. The multiyear structure aims to correct the deficit. It gives contractors long-term visibility to scale production [6].

What Raytheon gets

RTX reported a record $340 billion companywide backlog on 20 October, including $164 billion in defense orders [7]. Its Raytheon division posted $8 billion in quarterly sales, up 14%, and operating profit of $1.13 billion, up 32% [7].

Northrop Grumman's filings showed about $50.1 billion of its $109.6 billion backlog was funded. That is a reminder that headline backlogs do not translate into delivered hardware [7].

The SM-6 deal sits in a run of large awards. Raytheon won an AMRAAM contract worth up to $20.7 billion in September, a Tomahawk award worth up to $22.9 billion in August, and $1.28 billion for SM-3 Block IIA and TOW systems [11]. The three largest exceed $68 billion combined. The SM-6 contract alone equals about 27.7% of RTX's 2025 sales of more than $88 billion [11].

Raytheon also holds a separate SM-3 Block IB contract: five years plus two options, up to $6.3 billion, with work mainly in Tucson, Arizona and Huntsville, Alabama [1].

Phil Jasper, president of Raytheon, said the missile's multi-mission capability is "vital to our customer" and that the company is "intensely focused on meeting the demand" [11].

What happens next

None of this is cash yet. Congress still has to fund the contract through appropriations. A continuing resolution is expected to extend through at least early December, without a full FY2027 defense budget [6].