Raytheon Secures $1.8 Billion Navy Contract Modification for SPY-6 Radar Production

Raytheon Missiles and Defense has been awarded a $1.81 billion contract modification to produce its advanced AN/SPY-6(V) Family of Radars for the U.S. Navy. The deal, announced by the Department of Defense on Monday, reinforces the company's long-term position as a critical supplier of next-generation naval surveillance technology.

Contract Details

The award modifies a previously issued contract (N00024-22-C-5500) and covers hardware production for the sophisticated radar systems. According to the Pentagon's announcement, the agreement is a mix of fixed-price incentive, firm-fixed-price, and cost-only arrangements.

The contract includes options that, if fully exercised, would increase its cumulative value to $3.39 billion. Work is expected to be completed by July 2031, or October 2031 if all options are exercised.

Financial and Production Footprint

Funding for the contract is drawn from multiple fiscal years, highlighting the program's strategic importance. The primary sources include:

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• $847.3 million (47%) from fiscal 2025 research, development, test, and evaluation funds.
• $706.9 million (39%) from fiscal 2025 shipbuilding and conversion funds.
• $204.6 million (11%) from fiscal 2026 other procurement funds.

Work will be performed at several Raytheon facilities across the United States, including Andover, Massachusetts (30%); San Diego, California (10%); Scottsdale, Arizona (10%); and Syracuse, New York (8%). The Naval Sea Systems Command in Washington, D.C., is the contracting activity.

Significance for Investors

The AN/SPY-6 is the U.S. Navy's next-generation integrated air and missile defense radar, essential for its modern surface fleet, including destroyers and aircraft carriers. This significant, multi-billion-dollar award provides a stable, long-term revenue stream for Raytheon's defense segment.

The contract was procured on a sole-source basis, underscoring Raytheon's unique capability in producing this critical technology. For investors, this demonstrates the company's entrenched market position and the high barriers to entry for competitors in the advanced naval radar sector.