Washington, DC, July 17 - Lockheed Martin has successfully delivered 72 F-35 Lightning II stealth fighters to the U.S. government as of May 1, 2025, according to a report by Bloomberg News. This milestone follows months of delays caused by challenges in implementing the Technology Refresh-3 (TR-3) software upgrade, a critical package designed to enhance the aircraft’s capabilities. The deliveries, which took place at Lockheed Martin’s Fort Worth, Texas facility, mark progress in clearing a backlog of jets that had been parked due to these technical hurdles. However, the program continues to face financial and operational challenges, with the Department of Defense withholding significant funds until the TR-3 upgrades are fully operational.
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The F-35 program, a cornerstone of Lockheed Martin’s portfolio and accounting for roughly 30% of the company’s annual revenue, has been grappling with delays since mid-2023. The TR-3 upgrade, intended to improve the jet’s processing power, sensors, and open architecture for future enhancements, encountered significant software integration issues. These problems prompted the Pentagon to halt deliveries in July 2023, leading to a buildup of 72 completed jets at Lockheed’s facilities. While production continued, the inability to deliver these aircraft created logistical challenges, as storing unfinished jets strained resources and delayed critical upgrades promised to the U.S. military and its allies.
A breakthrough occurred in July 2024 when the Joint Program Office (JPO) partially lifted the delivery suspension, approving a truncated version of the TR-3 software. This limited variant, suitable for initial training tasks, allowed Lockheed Martin to begin transferring jets, starting with two F-35s in July, followed by additional batches in August and at least 22 more by the end of 2024. By May 2025, all 72 jets were delivered, a significant step toward resuming normal operations. However, the full TR-3 package, essential for combat-ready capabilities, remains incomplete, with Lockheed aiming to finalize validation by the end of 2025. Financially, the delays have had a notable impact. Since mid-2023, the Department of Defense has withheld up to $5 million per aircraft, conditioning final payments on the jets’ ability to operate under real-world conditions with the complete TR-3 package.
In January 2025, this amount was reduced by approximately $1.2 million per jet as Lockheed demonstrated progress, but the majority of the withheld funds, potentially totaling hundreds of millions, will remain frozen until 2026, when the JPO expects full TR-3 integration. This financial pressure, combined with a reduced Pentagon order for 47 F-35s in the fiscal 2026 budget (down from 74), poses challenges for Lockheed’s cash flow, with first-quarter 2025 free cash flow dropping to $955 million from $1.3 billion the previous year. The F-35 remains a critical asset for the U.S. and its allies, offering advanced stealth, sensor fusion, and electronic warfare capabilities. Lockheed Martin has invested over $350 million in research to accelerate upgrades, including Block 4 enhancements planned for the next decade. Despite the setbacks, the company is optimistic that resolving TR-3 issues will unlock demand and restore confidence among stakeholders. The program’s long-term success hinges on overcoming these technical hurdles to ensure the F-35 remains effective against evolving global threats.