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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

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