How Much Do Government Contracts Contribute to Defense Suppliers’ Revenue Share?

Originally published in September 2022. Substantially updated on 28 October 2026 with Q3 2026 results and revised government-revenue calculations.

Government contracts contribute very different proportions of revenue across major defense suppliers. Based on the latest disclosures examined for this update, U.S. government business accounts for approximately 98% of Booz Allen Hamilton’s revenue and 69.0% of Lockheed Martin’s quarterly sales. When international government customers are considered, we estimate Lockheed Martin’s total government exposure at more than 95%. RTX generated 51.1% of its Q3 2026 sales from U.S. and foreign government customers, while Boeing derived approximately 37.9% of its Q3 2026 revenue from the U.S. government, including Foreign Military Sales.

These figures are not perfectly like-for-like. Some companies disclose direct U.S. government sales, Foreign Military Sales and direct foreign-government sales separately; others combine government and commercial customers within broader categories. This article therefore distinguishes company-reported figures from TenderAlpha estimates and explains what is – and is not – included in each percentage.

In addition to revenue exposure, we review the companies’ latest sales, profitability, cash flow and backlog developments. These operating indicators provide context for the government-revenue figures, but contract awards and backlog should not be treated as revenue recognized in the same reporting period.

Key Findings

• Booz Allen Hamilton has the highest estimated government exposure in the group. Approximately 98% of revenue comes from U.S. government contracts and task orders, based on the latest exact annual disclosure and the company’s subsequent statement that substantially all revenue remains U.S.-government-derived.
• Lockheed Martin generated 69.0% of Q3 2026 sales directly from the U.S. government. Its international category also includes Foreign Military Sales and direct sales to foreign governments, supporting a TenderAlpha estimate that total government customers represented more than 95% of quarterly sales.
• RTX reported the most complete current customer breakdown. Direct U.S. government sales, Foreign Military Sales and direct foreign-government sales together accounted for 51.1% of Q3 2026 revenue.
• Boeing is the least government-dependent of the four companies, but its exposure remains material. The U.S. government, including Foreign Military Sales, generated approximately 37.9% of Q3 2026 revenue. Direct sales to foreign governments make Boeing’s total government exposure higher, but the filing does not support an exact consolidated percentage.
• Backlog provides evidence of contracted demand, not a timetable for revenue recognition. Each company’s backlog spans multiple programmes, customers and performance periods, and some awards may be modified or cancelled.

How We Calculated Government Revenue Share

The analysis uses the latest company filings and earnings materials available as of 28 October 2026. Lockheed Martin, Boeing and RTX are assessed using Q3 2026 results. Booz Allen Hamilton is assessed using Q2 FY2027 results because its fiscal year ends in March.

For this article:

• Direct U.S. government sales are sales made directly to U.S. government agencies.
• Foreign Military Sales (FMS) are sales to foreign governments administered through the U.S. government. Where a company includes FMS within its U.S. government category, we state this explicitly.
• Direct foreign-government sales are contracts made directly with governments outside the United States rather than through the FMS programme.
• Total government revenue combines the government categories a company discloses. Where the available reporting does not permit an exact calculation, we provide either a clearly labelled estimate or no total percentage.

We do not infer government revenue from the name of a business segment alone. Defense-focused segments can contain commercial revenue, while aerospace and services segments can include material government business. All percentages are calculated from reported revenue – not from the value of awards announced, contract ceilings, remaining performance obligations or backlog – and may not sum exactly because of rounding.

Government Revenue Share Comparison

Source: Company filings and TenderAlpha calculations. The percentages are not fully like-for-like because the companies use different customer classifications and reporting periods.

TenderAlpha Data: $88.1 Billion in 2026 Federal Award Potential

Company filings show aggregate customer concentration, but they do not provide a standardized view of the individual awards and buying-agency relationships behind the reported revenue. TenderAlpha’s 2026 U.S. federal contracts data provides a complementary award-level perspective on the four companies covered in this analysis.

As of 27 October 2026, TenderAlpha Pro contained 20,501 initial-award records associated with Lockheed Martin, Boeing, RTX and Booz Allen Hamilton, with a combined total potential value of approximately $88.1 billion.

Source: TenderAlpha Pro, data retrieved 27 October 2026.

The figures represent the total potential value of the awards, not amounts fully obligated by the government during 2026. Many of the largest awards cover multi-year programmes and include future phases or contract options. The value ultimately obligated – and the revenue recognized by each company – may therefore be considerably lower and spread across several reporting periods.

Lockheed Martin accounted for almost two-thirds of the combined potential value, consistent with the scale of the company’s 2026 multi-year defense awards and its exceptionally high government-revenue concentration. Boeing and RTX together represented a further 26.2%, demonstrating that government business remains material even though both companies also operate substantial commercial-aerospace businesses.

Booz Allen Hamilton produced the smallest record count but still represented approximately $8.4 billion, or 9.5% of combined potential value. This illustrates why award counts alone can be misleading: a relatively small number of large contract vehicles can carry considerable potential value, particularly in government technology and professional services.

The award data should not be used to reconstruct quarterly revenue directly. Instead, it adds a second analytical layer: company filings show how much revenue was recognized from government customers, while TenderAlpha data reveals the scale and composition of the underlying award activity that may support work over future periods.

TenderAlpha’s ticker-mapped Global Government Contracts data allows users to examine available award records for these companies, including contract descriptions, buying agencies, award values and contract duration. Explore the dataset or request a demo to investigate the relationships in greater depth.

Companies Covered

Jump directly to a company analysis or compare all four businesses in the peer review.

Lockheed Martin (NYSE: LMT)

Lockheed Martin Q3 2026 Results Overview

Lockheed Martin reports results across four business segments. Aeronautics generated approximately 40% of Q3 2026 sales, Missiles and Fire Control (MFC) 22%, Rotary and Mission Systems (RMS) 22%, and Space 17%.

Source: Lockheed Martin Q3 2026 earnings release. Percentages may not total exactly 100% because of rounding.

Lockheed Martin recorded Q3 2026 sales of $20.7 billion, up 11% year over year, with growth across all four segments. MFC delivered the fastest increase, with sales rising 24% as production expanded across PAC-3, THAAD, GMLRS and Precision Strike Missile programmes. Aeronautics sales increased 13%, supported principally by higher F-35 production and sustainment volume.

Net earnings rose 14% to $1.8 billion, while diluted earnings per share increased to $7.97 from $6.95 in the prior-year quarter. Consolidated operating profit reached $2.4 billion. Free cash flow was $3.0 billion, compared with $3.3 billion one year earlier.

Backlog increased 27% from the end of Q2 2026 to a record $292.0 billion. The total included $52.5 billion associated with the multi-year award for PAC-3 Missile Segment Enhancement interceptors. Because backlog represents work expected to be performed over multiple periods, it should be treated as an indicator of contracted demand rather than as an immediate revenue forecast.

Lockheed Martin raised its 2026 outlook for sales, diluted earnings per share and free cash flow. The updated ranges call for sales of approximately $80.0–$82.0 billion, diluted EPS of approximately $30.35–$30.75 and free cash flow of approximately $7.8–$8.0 billion.

Lockheed Martin Government Revenue Share

Lockheed Martin’s Q3 2026 Form 10-Q shows that the U.S. government generated $14.29 billion of the company’s $20.71 billion in quarterly sales. Therefore, 69.0% of Lockheed Martin’s Q3 2026 sales came directly from the U.S. government.

International customers accounted for another $6.36 billion, or 30.7% of sales. This category includes Foreign Military Sales contracted through the U.S. government, direct commercial sales to international governments and sales to other international customers. U.S. commercial and other customers represented only $59 million, or approximately 0.3% of quarterly sales.

Lockheed Martin does not separately disclose the government and commercial components of its international sales. A precise total government-revenue percentage therefore cannot be calculated from the filing. Given the nature of the company’s portfolio and the very small contribution from U.S. commercial customers, we estimate that government customers accounted for more than 95% of Q3 2026 sales. This is a TenderAlpha estimate rather than a company-reported figure.

Source: Lockheed Martin Q3 2026 Form 10-Q.

Boeing (NYSE: BA)

Boeing Q3 2026 Results Overview

Boeing reports results through three principal segments. In Q3 2026, Commercial Airplanes represented approximately 44% of consolidated revenue, Defense, Space & Security 33%, and Global Services 23%.

Source: Boeing Q3 2026 earnings release. Percentages are calculated against consolidated revenue and may not total exactly 100% because of rounding.

Boeing recorded Q3 2026 revenue of $24.2 billion, up 4% year over year. Higher defense and services volume supported the increase, while Commercial Airplanes revenue declined 3% despite deliveries remaining broadly stable at 161 aircraft. Boeing attributed the commercial segment’s performance to a less favourable delivery mix, higher projected costs associated with future production-rate adjustments, and increased estimated supply-chain costs.

The company generated GAAP operating earnings of $354 million, equivalent to a 1.5% operating margin, and reported a net loss of $116 million, or $0.26 per diluted share. Core operating earnings were $204 million, with a core operating margin of 0.8%. The dramatic year-over-year improvement should be interpreted cautiously because Boeing’s Q3 2025 results included a large charge related to the 777X programme. Commercial Airplanes remained loss-making in the latest quarter, with a $697 million operating loss and a negative 6.5% margin.

Defense, Space & Security delivered the strongest revenue growth, rising 15% year over year to $7.9 billion. Its operating margin improved to 6.2%, although the result included a $252 million gain from the sale of HRL Laboratories. Global Services revenue increased 4% to $5.6 billion and produced an 18.3% operating margin. Excluding the Digital Aviation Solutions operations divested in October 2025, Boeing reported that Global Services revenue grew 11% year over year.

Operating cash flow reached $1.5 billion and free cash flow was $464 million in Q3, despite approximately $700 million in Department of Justice settlement payments. However, free cash flow for the first nine months of 2026 remained negative at $359 million. Boeing ended the quarter with $20.7 billion in cash and marketable securities and $45.9 billion in consolidated debt.

Total company backlog reached a record $745 billion, approximately 17% above the $636 billion reported one year earlier. Commercial Airplanes accounted for $612 billion of the total, while Defense, Space & Security reached a record $101 billion and Global Services ended the quarter with $33 billion. The defense backlog included 23% from customers outside the United States. Boeing’s recently announced F/A-XX selection was not included in backlog pending completion of the source-selection and evaluation-review process.

Boeing Government Revenue Share

Boeing generates government revenue primarily through its Defense, Space & Security and Global Services businesses. In Q3 2026, the company disclosed that 93% of Defense, Space & Security revenue and 32% of Global Services revenue came from the U.S. government. Both percentages include Foreign Military Sales conducted through the U.S. government.

Applying those customer shares to the corresponding Q3 segment revenue produces approximately $9.16 billion of U.S.-government-derived revenue. Therefore, approximately 37.9% of Boeing’s $24.19 billion in Q3 2026 consolidated revenue came from the U.S. government, including Foreign Military Sales. This was higher than the comparable 34.7% share calculated for Q2 2026, reflecting the quarter’s stronger defense and services contribution.

This figure should not be presented as Boeing’s complete government revenue share. It does not capture all revenue from foreign governments contracting directly with the company. Boeing’s total government exposure was therefore higher than 37.9%, but the filing does not separate direct foreign-government revenue from other non-U.S. customer revenue well enough to support a precise consolidated percentage.

Source: Boeing Q3 2026 Form 10-Q. TenderAlpha calculation based on Boeing’s disclosed segment revenue and U.S.-government customer shares.

RTX Corporation (NYSE: RTX)

RTX Q3 2026 Results Overview

RTX reports results across Collins Aerospace, Pratt & Whitney and Raytheon. Before intersegment eliminations, Collins Aerospace generated approximately 33% of Q3 2026 segment sales, Pratt & Whitney 36%, and Raytheon 31%.

Source: RTX Q3 2026 Form 10-Q. Consolidated sales were $24.97 billion after $679 million of eliminations and other items.

RTX generated Q3 2026 sales of $25.0 billion, up 11% year over year and 12% organically. All three segments contributed to the increase, with demand spanning commercial aerospace and defense markets.

GAAP diluted EPS was $1.89, while adjusted diluted EPS increased 33% to $2.26. The adjusted result included a $0.25-per-share benefit from the recovery of costs associated with tariffs previously imposed under the International Emergency Economic Powers Act. This benefit should be distinguished from RTX’s underlying operating performance.

Operating cash flow reached $2.9 billion, including approximately $300 million from the tariff recovery, while free cash flow was $2.1 billion. RTX raised its full-year 2026 outlook to adjusted sales of $97.0–$97.5 billion, adjusted EPS of $7.65–$7.75 and free cash flow of $9.0–$9.2 billion.

Company backlog reached a record $340 billion, up 36% year over year. This comprised $176 billion of commercial backlog and $164 billion of defense backlog. RTX also reported more than $81 billion of new commercial and defense awards during the quarter, including approximately $37 billion associated with multi-year Tomahawk and AMRAAM production contracts. Backlog should nevertheless be treated as an indicator of future contracted demand rather than guaranteed revenue within a particular period.

Additional source: RTX Q3 2026 earnings release.

RTX Government Revenue Share

RTX’s Q3 2026 Form 10-Q provides a complete customer-type breakdown. Direct sales to the U.S. government generated $8.88 billion, or 35.5% of quarterly sales. Foreign Military Sales conducted through the U.S. government contributed another $2.14 billion, or 8.6%, while direct commercial sales to foreign governments generated $1.74 billion, or 7.0%.

Together, these categories produced $12.75 billion of government revenue, equivalent to 51.1% of RTX’s Q3 2026 sales. The remaining 48.9% came from commercial aerospace and other commercial customers.

Government business is not confined to the Raytheon segment. Collins Aerospace and Pratt & Whitney also generated material U.S. and foreign government sales during the quarter. The consolidated customer breakdown therefore gives a more accurate measure of RTX’s government exposure than treating Raytheon revenue as a proxy.

Source: RTX Q3 2026 Form 10-Q. Direct U.S. government sales exclude Foreign Military Sales, which are reported separately by RTX.

Booz Allen Hamilton (NYSE: BAH)

Booz Allen Hamilton Q2 FY2027 Results Overview

Booz Allen Hamilton’s fiscal year ends in March. In Q2 FY2027, which ended on 30 September 2026, National Security customers accounted for 75% of revenue and Civil and Commercial customers for 25%.

Source: Booz Allen Hamilton Q2 FY2027 Form 10-Q. These customer categories are not equivalent to government and non-government revenue.

Quarterly revenue declined 3.9% year over year to $2.78 billion. Booz Allen attributed the reduction principally to a slower procurement environment, which delayed programme starts – particularly among civil customers – and reduced headcount and billable expenses. Revenue excluding billable expenses decreased by a more modest 0.8% to $1.96 billion.

Net income increased 3.4% to $181 million, while adjusted diluted EPS rose 18.1% to $1.76. Adjusted EBITDA declined 3.4% to $313 million, although the adjusted EBITDA margin improved slightly to 11.3%. Free cash flow was $263 million, down from $395 million in the prior-year quarter.

Total backlog increased 1.9% year over year to $40.93 billion, including $5.71 billion of funded backlog, $10.41 billion of unfunded backlog and $24.81 billion of priced options. Approximately $164 million of the total was acquired with Ultra Mission Solutions. The company also cautioned that procurement delays and reductions in contract value had affected its ability to convert backlog into revenue.

Booz Allen narrowed its FY2027 revenue outlook to $11.3–$11.6 billion and raised adjusted diluted EPS guidance to $6.50–$6.70. Its updated free-cash-flow outlook is $850–$925 million.

Additional source: Booz Allen Hamilton Q2 FY2027 earnings release.

Booz Allen Hamilton Government Revenue Share

The 75% National Security and 25% Civil and Commercial customer split should not be used to calculate Booz Allen’s government exposure. The Civil and Commercial category combines federal civil agencies with commercial customers and therefore is not a non-government category.

Booz Allen’s FY2026 Form 10-K states that substantially all of the company’s revenue is derived from services provided under contracts and task orders with the U.S. government. The most recent exact annual disclosure, for FY2025, placed revenue from contracts and task orders with U.S. government agencies at 98% of total revenue.

The company no longer supplies an exact percentage in its latest annual or quarterly filings. On that basis, approximately 98% remains the best supportable estimate of Booz Allen Hamilton’s U.S. government revenue share, but it should be labelled as an estimate rather than a disclosed Q2 FY2027 figure.

Sources: Booz Allen Hamilton FY2026 Form 10-K and FY2025 Form 10-K.

Defense-Sector Peer Analysis

Government concentration differs substantially

Booz Allen Hamilton and Lockheed Martin are the most government-dependent businesses in the group. Approximately 98% of Booz Allen’s revenue is estimated to come from the U.S. government, while Lockheed Martin generated 69.0% of Q3 2026 sales directly from the U.S. government and likely more than 95% from government customers overall.

RTX occupies the middle ground. Government customers generated 51.1% of its Q3 2026 sales, but its commercial aerospace operations remain almost equally important. Boeing has the lowest disclosed government concentration in the group because of the scale of Commercial Airplanes. Even so, U.S. government revenue – including Foreign Military Sales – accounted for approximately 37.9% of its Q3 2026 consolidated revenue, and direct foreign-government business takes its total exposure above that level.

The differences matter because government concentration brings both demand visibility and concentration risk. Contracted programmes can support activity over long periods, but revenue remains exposed to appropriations, procurement delays, programme execution, contract modifications and customer decisions. High government exposure should therefore not automatically be interpreted as financial stability or protection from an economic downturn.

The latest results show different operating positions

Lockheed Martin and RTX combined strong Q3 sales growth with record backlogs and higher full-year guidance. Their results indicate robust demand across defense programmes, although the timing of converting that demand into sales and cash flow will depend on production capacity, programme execution and funding.

Boeing’s position remains more mixed. Defense, Space & Security generated 15% revenue growth in Q3, but Commercial Airplanes remained loss-making and the group reported a net loss. The company’s $745 billion backlog is also dominated by commercial aircraft, so it should not be read as a proxy for government demand.

Booz Allen Hamilton provides a useful counterexample to the idea that government dependence guarantees smooth growth. Revenue declined 3.9% in Q2 FY2027 as procurement delays affected programme starts and billable expenses, even though backlog increased. Its results demonstrate that the timing and structure of government purchasing can matter as much as the overall level of exposure.

Backlog strengthens the demand picture – but does not settle it

All four companies reported higher or record backlogs in their latest results, but the totals are not directly comparable. Boeing’s backlog includes a dominant commercial-aircraft component; RTX separates commercial and defense backlog; Booz Allen includes funded backlog, unfunded backlog and priced options; and Lockheed Martin’s total includes multi-year programme awards.

Backlog is therefore most useful when examined within each company over time. It indicates work under contract or expected under contract structures, but it does not establish the timing, profitability or certainty of future revenue. Revenue share, award activity, backlog composition, programme execution and cash conversion should be considered together.

Conclusion

Government customers remain fundamental to all four businesses, but the degree of dependence varies sharply. Booz Allen Hamilton and Lockheed Martin derive nearly all their revenue from government customers; RTX combines a 51.1% government share with a similarly substantial commercial-aerospace business; and Boeing’s large commercial-aircraft operation reduces its disclosed U.S.-government share to approximately 37.9% of consolidated revenue.

These percentages should be monitored rather than treated as permanent characteristics. Business mix, delivery volumes, programme timing and customer classifications can all change the quarterly result. The clearest analysis therefore combines company-reported revenue with careful examination of the underlying contracts, customers and backlog – without treating award value as recognized revenue.

Readers seeking to move from aggregate revenue percentages to individual award records can explore the companies through TenderAlpha’s Global Government Contracts data. TenderAlpha’s Public Markets Research use case explains how this intelligence can support company and sector analysis.

This article is provided for informational purposes only and does not constitute investment advice.