Defence & Aerospace Guides
Backlog basis labels, book-to-bill momentum, FCF conversion, contract-type margin dispersion, budget-cycle demand, and FCF-yield screening for listed defence primes.
Defence Primes
Backlog and Book-to-Bill in Defence
Funded vs unfunded backlog, book-to-bill arithmetic and FY2025 peer ratios: RTX 1.56x, GD 1.6x defence, LHX 1.3x, BAE 1.2x, NOC 1.10x, plus the LMT filing gap.
Defence Prime Book-to-Bill Benchmarks
FY2025 book-to-bill ranked across RTX, GD, LHX, LMT, BAE and NOC, each with backlog and the filer's own orders-to-revenue definition beside it.
Funded vs Unfunded Backlog in Defence
What appropriation does to a backlog number, why each prime defines funded and unfunded in its own words, and a worked example from one FY2025 filing.
Free Cash Flow Conversion for Primes
Why primes screen on FCF ÷ net income: GD incentive weight 25%, OCF 122% vs FCF 94%, and the FY2025 ladder from LHX 170% to NOC 79%.
FAS vs CAS Pension Accounting for Defence Primes
Why a defence prime books its pension cost twice, where the reconciling line sits between segment and consolidated profit, and how each filer defines it.
Cost-Plus vs Fixed-Price Contracts
NOC cost-type vs FFP margin/risk language, verified portfolio mix (~50% fixed at NOC; GD 51% fixed / 44% cost-reimb), and segment margin dispersion across the peer set.
Defence Budgets and the Demand Cycle
US DoD FY2026 request $961.6B (+11.8%), NATO 2% met by all 32 Allies, Hague 5%-by-2035, and how RTX 52/48 vs LMT ~99.6% government changes budget-beta.
Valuing Defence Primes (FCF Yield)
How to compute FCF yield for defence primes and cross-check it against P/E, using FY2025 filed figures, the BAE FX adjustment, and FCF conversion.
Defence Primes Research Profiles
Commercial Aerospace
OEM vs Aftermarket: Where Aerospace Makes Money
Why commercial aerospace margins split between loss-making OE ramps and high-margin aftermarket: Boeing BCA −17.1% vs BGS ~18.5%, GE 71% services at 26.6% CES margin, and a ~15-25 pp aftermarket premium we state as a teaching convention.
Aerospace Aftermarket Revenue Mix by Company
FY2025 aftermarket or services revenue share ranked across six aerospace filers, with the basis behind each filed figure stated on every row.
Backlog and the Narrowbody Ramp
Derived backlog-years, production-rate targets and book-to-bill for the narrowbody cycle: Boeing 737 ~9.9 yr at 42/month, Airbus A320 ~11.8 yr ramping to 75/month, and FY2025 order intake.
Firm Backlog vs Unfilled Orders in Aerospace
What Boeing's ASC 606 backlog test excludes, how Airbus applies the same test under IFRS 15, and why GE files the number as RPO.
Aftermarket Margins and the Installed Base
Razor/blade engine economics, GE ~45,000-engine installed base, CES backlog ~90% services, MRO revenue share benchmarks, and why filers rarely split aftermarket-only margins.
Boeing/Airbus Duopoly Economics
Why Boeing and Airbus still control 86% of 2024 deliveries, certification and production-cap barriers, sole-source supplier lock-in, and why transaction-level airframe pricing stays off the filing record.
Valuing Aerospace (EV/EBITDA, FCF)
FY2025 peer EV/EBITDA on filed EBITDA bases, FCF divergence between Boeing ($1.9B outflow) and GE ($7.7B), screening bands by business model, and FCF conversion framing.
Commercial Aerospace Research Profiles
Space & Satellites
Space Sector Business Models
Launch, in-orbit connectivity and ground/data monetisation: why segment mix sets the metric screen, with Rocket Lab backlog split, Iridium subscribers and Planet recurring ACV.
Cash Runway in Pre-Profit Space Names
Liquidity ÷ |OCF burn| for Rocket Lab (~6.6 yr) and Planet (~15 yr on OCF): why net loss misleads, capex is separate, and EchoStar needs a debt lens.
Satellite Constellation Capex and Economics
Upfront-build economics vs operating burn: FY2025 capex intensity from Iridium 11.5% to Globalstar 201%, historical Kuiper and Iridium NEXT anchors, and why OCF ≠ satellite build spend.
LEO vs GEO Satellite Economics
Why orbit class, not company size, sets a satellite operator's capex cycle: a rolling LEO constellation replacement against a staggered, per-satellite GEO build.
Backlog and Government Contracts in Space
Government anchor programmes and backlog definitions: Iridium EMSS $738.5M, Rocket Lab SDA $816M, Planet NGA $200M ceiling, Viasat defence $984M, plus concentration and recompete risk.
Government Revenue Share Across Space Stocks
FY2025 government revenue share ranked, with the basis behind each filed figure and the two names that do not disclose the split.
Valuing Space Stocks (EV/sales, Runway)
How to compute EV/sales for pre-profit space stocks, cross-check with EV/EBITDA once earnings are real, and overlay cash runway before reading the multiple.