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- **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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