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Capital · Air and missile defense

Anduril pitches new Steelfin interceptor as a lower-cost option to PAC-3

Anduril executives aim for a third of the PAC-3 MSE's price, Breaking Defense reported. The company declined to say whether Steelfin was selected for the Army's next-generation PAC-3 effort.

Anduril on Monday unveiled Steelfin, a family of two-stage surface-to-air interceptors designed for cruise, ballistic and hypersonic missile threats.1–2 Executives aim for it to cost a third of the price of the Patriot's PAC-3 Missile Segment Enhancement (MSE), Breaking Defense reported.2 That benchmark is Lockheed Martin's missile, built under an undefinitized multiyear contract Lockheed puts at $58.62 billion. Lockheed says that funding lets it triple PAC-3 MSE capacity by the end of 2030.4

Anduril executives are aiming for Steelfin to cost a third of the price of the Patriot's PAC-3 MSE

The Army's Future Interceptor program seeks a next-gen version of the PAC-3 MSE

Steelfin interceptoraiming to cost a third of the priceplanned

will begin flight testing Steelfin variants next year

Lockheed Martinone of two companies selectedactual

Lockheed Martin and one other undisclosed company were selected for the Army's Future Interceptor program

Anduril executives declined to comment on whether Steelfin was selected for Future Interceptor

Reported by Breaking Defense, Oct. 9 and Oct. 12, 2026; Anduril, Oct. 12, 2026

Sources
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Anduril was one of many vendors chosen for testing and demonstrations after the Army's xTech Apex Intercept competition, Breaking Defense reported Monday. Steve Milano, Anduril's senior director of missiles, said the company is vying for the Army's low-cost interceptor program with Steelfin. He called it a "natural fit" for Future Interceptor, the Army's effort to find a next-generation PAC-3 MSE, though Anduril executives declined to say whether Steelfin was selected.2 Lockheed's Tim Cahill said in a Breaking Defense report Friday that Lockheed is one of two companies selected, without naming the other.3

The company says Steelfin variants are compatible with launchers including the M903A2, the Mk 41 Vertical Launch System and Typhon. It plans to produce on the order of several thousand Steelfin variants a year in the short term.1 Milano expects full-rate production at the end of 2028 or the beginning of 2029, Breaking Defense reported. Anduril intends to build most subassemblies at Arsenal-1 in Ohio and do final integration with a "handful of our partners," he said.2 Anduril says it has spent years on Steelfin "investing alongside multiple customers," though neither its announcement nor the outlet's report names one or describes an order.1–2

Anduril says it has completed ballistic testing with representative air vehicles and will begin flight testing Steelfin variants next year.1 Naming the second Future Interceptor company will show whether Steelfin advanced in the same program as Lockheed's PAC-3 Edge, which Lockheed intends to begin testing in 2027, according to Breaking Defense.3

Sources (4)
  1. Anduril: Steelfin (Oct. 12, 2026) www.anduril.com
  2. Breaking Defense: Anduril unveils Steelfin interceptor as cheaper option to PAC-3 missiles (Oct. 12, 2026) breakingdefense.com
  3. Breaking Defense: Lockheed unveils PAC-3 Edge, its next-gen Patriot interceptor (Oct. 9, 2026) breakingdefense.com
  4. Lockheed Martin: Department of War Awards Lockheed Martin $58.62B for Multiyear PAC-3 MSE Production (July 29, 2026) news.lockheedmartin.com

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Contracts · Air defense

State Department approves possible $2.1 billion Patriot missile sale to Ukraine

Lockheed Martin would be principal contractor for 500 PAC-3 MSE missiles, with Ukraine paying through allied donations and national funds financed by an EU loan.

The State Department approved a possible Foreign Military Sale to Ukraine estimated at $2.1 billion. Lockheed Martin would be the principal contractor under the proposal, announced in a congressional notification dated Oct. 30, 2026.1

Ukraine requested 500 PAC-3 MSE missiles

State approved a possible Foreign Military Sale to Ukraine of PAC-3 MSE missiles

Estimated total cost$2.1 billioncontingent

The estimated total cost is $2.1 billion

Principal contractorLockheed Martinplanned

The principal contractor will be Lockheed Martin

Financingdonations from Canada, Germany and Norwayplanned

Ukraine will pay for this purchase with donations from Canada, Germany, and Norway via the JUMPSTART program and national funds, financed by the European Union’s Ukraine Support Loan.

Non-major defense equipment items include spare parts and logistics and program support

Source: U.S. Department of State. As of October 30, 2026.

Sources
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Ukraine would pay with donations from Canada, Germany and Norway through the JUMPSTART program, plus national funds financed by the European Union’s Ukraine Support Loan. No U.S. funds are involved in the proposed sale.1

Ukraine requested 500 PATRIOT Advanced Capability-3 Missile Segment Enhancement missiles. The package also includes spare parts and related logistics and program support, so the estimated total covers more than the missiles themselves.1

State says the proposed sale would sustain Ukraine’s existing PATRIOT system operations against ongoing aerial threats and would have no adverse impact on U.S. defense readiness. The approval covers a possible sale; the notification gives no contract award or delivery schedule.1

Sources (1)
  1. State Department, Ukraine – PATRIOT Advanced Capability-3 (PAC-3) Missiles, Oct. 30, 2026 www.state.gov

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Industry · Prime contractors

Lockheed's missiles segment sales rise 24% with margin nearly steady

Missiles and Fire Control accounts for most of Lockheed's backlog increase from year-end through the third-quarter close.

Lockheed Martin's Missiles and Fire Control segment increased sales 24% in third-quarter 2026.1 Sales reached $4.5 billion. Its operating margin edged down to 14.0% from 14.1% a year earlier.2 Companywide, sales rose 11% to $20.7 billion.1

Lockheed's missiles segment outpaces companywide sales growth

Year-over-year sales growth, third quarter 2026 (%)

Missiles and Fire Control24%
Lockheed Martin companywide11%

Companywide sales include Missiles and Fire Control.

Source: Lockheed Martin third-quarter 2026 financial results. As of Oct. 22, 2026.

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Lockheed attributed the segment's sales increase primarily to production ramps on Patriot Advanced Capability-3, Terminal High Altitude Area Defense, Guided Multiple Launch Rocket Systems and Precision Strike Missile programs.1

Also announced

Costs on the F-35 Lot 20 advance acquisition contract began exceeding current contractual authorization and funding during the quarter. Production contracts for lots 20 and higher remain under negotiation. Lockheed warned that without additional authorization and funding from the government, its operating results, cash flows and financial condition will suffer in future periods.1

Missiles and Fire Control accounted for about 97% of Lockheed's backlog increase from the prior year-end through the third-quarter close, by our calculation.2 Total backlog reached $292.0 billion.1–2 It included $52.5 billion associated with the multi-year award to produce PAC-3 Missile Segment Enhancement interceptors.1

Sources (2)
  1. Lockheed Martin Reports Third Quarter 2026 Financial Results news.lockheedmartin.com
  2. Lockheed Martin 8-K, Exhibit 99.1, Oct. 22, 2026 www.sec.gov