What does L3Harris do and what are its main business segments?

What were the key takeaways from L3Harris’s earnings call?

What is the revenue and EPS growth rate for L3Harris year over year?

What factors drove the changes in L3Harris's revenue and profit?

Did L3Harris beat or miss consensus estimates last quarter?

What is L3Harris's gross profit margin?

What were the key takeaways from L3Harris's earnings call?

What guidance did L3Harris's management provide for the next earnings period?

- **Revenue Growth**: 10% organic Q3 growth, driven by missile defense, space, and international programs.
- **Profitability**: Segment margins expanded across all businesses; Aerojet Rocketdyne at 12.7%.
- **Key Wins**: $2.2B South Korea contract, Poland's Viper Shield, and Morocco's C-130 up award.
- **Guidance Update**: 2025 revenue $22B (6% organic), EPS $10.50-$10.70, free cash flow $2.65B.
- **Risks**: Government shutdown delaying payments and awards; resolution expected in November.
- **Long-Term Outlook**: 2026+ growth driven by missile defense, space-based interceptors, and international expansion.

**【CEO Summary Section】**
- Delivered 10% organic revenue growth, driven by missile defense, space-based interceptors, and international demand.
- Book-to-bill ratio of 1.2, with $6.6 billion in orders, reflecting strong execution across all segments.
- Highlighted key wins: $2.2 billion South Korea airborne early warning contract, Poland's Viper Shield EW system, and Morocco's C-130 up award.
- Emphasized strategic investments in AI, software-defined systems, and agile partnerships to maintain speed and relevance.

**【CFO Financial Commentary】**
- Q3 revenue: $5.7 billion (10% organic growth); Non-GAAP EPS: $2.70 (10% YoY); Free cash flow: $450 million (temporarily impacted by payment delays).
- Segment performance: 
  - Communications Systems (CS): $1.5B (+6%), 26.1% margin
  - Integrated Mission Systems (IMS): $1.7B (+17%), 12% margin
  - Space & Airborne Systems (SAS): $1.8B (+7%), 12.1% margin
  - Aerojet Rocketdyne: $1.1B (+5%), 12.7% margin
- Full-year guidance updated: Revenue $22B (6% organic growth), segment margin >15%, EPS $10.50-$10.70.

**【Q&A Highlights】**
- **ISR Growth**: IMS segment backlog doubled YoY, driven by classified programs and international demand. Canada's Strategic Tanker competition and Morocco's F-35 depot support highlight future opportunities.
- **Aerojet Rocketdyne Margin Outlook**: Mid-12% range for 2025, with potential for improvement as legacy programs mature and new contracts ramp.
- **Government Shutdown Impact**: Delays in payments, export licenses, and contract awards. Assuming resolution in November, expect Q4 catch-up activity.
- **International Expansion**: 22% of revenue now from international markets, targeting 25%. Success in Europe (8 countries selecting Viper Shield) and Asia-Pacific (South Korea, India) underscores global demand for EW and communication systems.
- **Space-Based Interceptors (SBI)**: On all major programs (HBTSS, Tranche 2 Tracking Layer), with new factory capacity ready for production ramp.
- **IRAD Spending**: Focused on high-impact areas like missile defense, AI, and space. Total R&D spend (including CRAD and acquisitions) remains significant, but not disclosed as a percentage of revenue.

L3Harris Technologies, Inc. (LHX) Q3 2025 Earnings Call Transcript

- **Record Growth**: 6% organic revenue growth, $8.3B orders, 1.5 book-to-bill. 
- **Margin Expansion**: 15.9% segment margin (30bps YoY), 16%+ target for 2026. 
- **LHX NeXt Efficiency**: $1B cost savings achieved 40% ahead of schedule. 
- **Strategic Wins**: $200M Germany comms, 130 RL10 engines, 40-45 HBTSS satellites. 
- **Free Cash Flow**: $2.65B guidance (16% YoY), $3B in 2026 (13% YoY). 
- **Missile Momentum**: 15% Q2 growth, 16% YTD growth, decades of demand. 
- **Golden Dome Readiness**: 40-45 HBTSS satellites ready for deployment. 


**【CEO Summary Section】**
- **Strategic Momentum**: 6% organic revenue growth and record $8.3B orders, driven by Golden Dome alignment and missile production expansion. 
- **LHX NeXt Efficiency**: $1B cost savings target achieved 40% ahead of schedule, with 2026 margin target on track. 
- **Key Wins**: $200M Germany comms contract, 40-45 HBTSS satellites for space defense, and 130 RL10 engines for space propulsion. 
- **Production Scale**: New SRM facilities in Virginia, Arkansas, and Alabama to meet global demand, with Missile Solutions up 15% Q2. 
- **2026 Outlook**: $23B revenue, 16%+ segment margin, and $3B free cash flow (13% YoY increase). 

**【CFO Financial Commentary】**
- **Q2 Results**: 
  - Revenue: $5.4B (6% organic growth) 
  - Segment Margin: 15.9% (30bps YoY expansion) 
  - Non-GAAP EPS: $2.78 (16% YoY) 
  - Free Cash Flow: $574M 
- **Segment Performance**: 
  - Aerojet Rocketdyne: 12% organic growth, 2.0 book-to-bill 
  - SAS: 7% growth in FAA networks and airborne systems 
  - IMS: 6% growth in ISR programs 
- **2025 Guidance Update**: 
  - Revenue: $200M increase to $21.8B (5% growth) 
  - Free Cash Flow: $2.65B (16% YoY) 
  - Non-GAAP EPS: $10.80 (12% YoY) 
- **2026 Outlook**: 
  - Free Cash Flow: $3B (13% YoY) 
  - Margin: Low 16% range 

**【Q&A Key Highlights】**
- **LHX NeXt Runway**: 30-40% of cost savings retained in margins, with program completion by end-2025. 
- **International Growth**: 20% of revenue from Europe, wins in Germany, Czech Republic, and Mid East. 
- **Golden Dome Confidence**: 40-45 HBTSS satellites ready for deployment, with potential 2025 revenue contribution. 
- **Missile Solutions**: 15% Q2 growth, 16% YTD growth, and decades of durable demand. 
- **Space Leadership**: 130 RL10 engines awarded, Wolf Pack attritable systems in development. 
- **Tax Reform Impact**: $0.30 EPS headwind in 2025, but $200M+ FCF benefit in 2026+. 


L3Harris Technologies, Inc. (LHX) Q2 2025 Earnings Call Transcript

- **Record Q1 Financials**: $5.1B revenue, 15.6% segment margin, $2.41 Non-GAAP EPS (+7% YoY).
- **$1T Defense Budget Catalyst**: FY2026 revenue target of $23B achievable with 7% CAGR, driven by classified awards and Golden Dome opportunities.
- **Hypersonic Defense Leader**: HBTSS satellite uniquely positioned for accelerated deployment under Golden Dome.
- **Shareholder Returns**: $570M buybacks in Q1; 24th consecutive dividend increase.
- **Margin Expansion**: 6 consecutive quarters of operating margin growth; SAS segment on path to mid-12% margins.


**【CEO Opening Remarks】**
- L3Harris is strategically aligned with the U.S. government's defense priorities, including the $1 trillion FY2026 defense budget proposal.
- The company secured a $350 million classified award in Q2 and a $1.1 billion Dutch defense contract, highlighting strong international demand.
- Emphasized the importance of commercial-like procurement reforms to accelerate innovation and reduce costs.
- Hypersonic tracking satellite (HBTSS) is positioned to be a core component of the Golden Dome architecture, with potential launches during President Trump's tenure.

**【CFO Financial Highlights】**
- Q1 2025 revenue: $5.1 billion (flat organically due to 12-week quarter).
- Segment operating margin: 15.6% (6th consecutive quarter of YoY expansion).
- Non-GAAP EPS: $2.41 (+7% YoY).
- Free cash flow: Outflow of $70 million (improved from $150 million in Q1 2024).
- Share buybacks: $570 million; total returns to shareholders: $800 million.
- Updated FY2025 guidance: Revenue $21.4-$21.7 billion, Non-GAAP EPS $10.30-$10.50.

**【Q&A Key Takeaways】**
- **International Growth**: Communications Systems segment up 4% QoQ, driven by high-margin international orders (e.g., Netherlands contract). IMS segment down 2% due to program timing but margin +140bps.
- **Golden Dome Strategy**: HBTSS is the only proven hypersonic tracking satellite; potential for accelerated awards in 2025. Aerojet's solid rocket motors and missile interceptors are critical to defense modernization.
- **Space Business Momentum**: SDA Tranche 0-2 contracts driving double-digit margin expansion. Fort Wayne and Palm Bay factories positioned for scale.
- **F-35 Recovery**: TR-3 production ramp to begin in 2026, offsetting 2025 volume decline.
- **LHX NeXt Transformation**: $1.2 billion annual savings target on track; enterprise-wide digital transformation underway.


L3Harris (LHX)-24 Apr 25-2025 Q1 Earnings call transcript

- **Record Backlog Growth**: $40B backlog (+15%) driven by missile defense and AI wins.
- **Financial Strength**: $2.3B Free Cash Flow, 15%+ margins, $10.55-10.85 EPS guidance for 2025.
- **Cost Savings Acceleration**: $800M+ LHX NeXt savings vs. $400M target, targeting 16%+ margins in 2026.
- **International Expansion**: 20%+ of revenue, 20%+ CAGR fueled by NATO and APAC demand.
- **AI Leadership**: $100M+ annual AI investment in partnerships with Palantir and startups.


**【CEO Overview】**
- Delivered record backlog of $40 billion, up 15% YoY, driven by wins in missile defense, space, and AI-enabled solutions.
- Appointed Ken Bedingfield as President of Aerojet Rocketdyne to accelerate operational excellence.
- 2025 priorities: Execute Trusted Disruptor strategy, grow international sales (20%+ of revenue), and deliver 5%+ organic growth.

**【CFO Financial Highlights】**
- 2024 revenue: $21.3B (+10% YoY), Non-GAAP EPS: $13.10, Free Cash Flow: $2.3B (+14%).
- Q4 results: $5.5B revenue, $3.47 EPS, $1B+ Free Cash Flow.
- 2025 Guidance: $21.8-22.2B revenue, 15%+ segment margin, $2.4-2.5B Free Cash Flow.

**【LHX NeXt Cost Savings】**
- Exceeded $800M in cumulative savings vs. $400M target, now targeting $1.2B by end-2025.
- 40%+ of savings flow to margin, driving 16%+ segment margin in 2026.

**【Business Segment Performance】**
- **SAS**: $1.7B Q4 revenue (-1% organically), 10.8% margin. Won 18 space vehicles for missile tracking.
- **IMS**: $1.8B Q4 revenue (+9%), 13.4% margin. Strong demand for munitions and maritime solutions.
- **CS**: $1.4B Q4 revenue (+5%), 24.4% margin. Software-defined radios drive international growth.
- **Aerojet**: $550M Q4 revenue (+5%), 11.5% margin. Solid rocket motor production ramping.

**【Q&A Key Takeaways】**
- **DOGE Impact**: Positive feedback on L3Harris' 4 recommendations to modernize defense procurement.
- **AI Strategy**: $100M+ annual investment in AI partnerships with Palantir and startups.
- **International Growth**: 20%+ of revenue, 20%+ CAGR in next 3 years driven by NATO and APAC.
- **Risk Management**: $100M+ EAC adjustments in space programs, but 2025 guidance assumes flat EACs.


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