LHX

L3Harris Technologies, Inc.

Next est. report 2026-10-29 · BMO

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Overview

L3Harris Technologies, Inc. is a global aerospace and defense technology company. Its three segments—Space and Mission Systems (~50%), Communications and Spectr

L3Harris Technologies, Inc. is a global aerospace and defense technology company. Its three segments—Space and Mission Systems (~50%), Communications and Spectrum Dominance (~35%), and Missile Solutions (~19%)—provide diverse mission-critical defense and commercial products. Serving government, including the Department of War and allies, and commercial customers, the company projects approximately $23.25 billion in 2026 revenue.

Search Keywords Brand Product

AMDT 3 satellite
Red Wolf missile
RateShield counter UAS
Vampire counter UAS system
NGC2 radios
smart software defined radios
THAAD propulsion
PAC-3 propulsion
Aerojet Rocketdyne
national security solutions
aerospace defense technology
missile warning systems
missile tracking systems
ISR platforms
electronic attack systems
space mission systems
communications systems
spectrum dominance
missile solutions
air traffic control modernization
counter UAS technology
solid rocket motors
propulsion systems
defense industrial base
wartime footing

Search Keywords Event Phrases

L3Harris earnings
Q2 2026 earnings
Missile Solutions IPO delay

Search Keywords Policy Regulatory

Department of War budget
FY27 defense budget
Munitions Acceleration Council

What They Do (Plain English & Analogies): L3Harris Technologies is like a high-tech workshop for militaries and governments worldwide. Imagine a company that builds everything from the 'eyes and ears' of a battlefield, such as advanced sensors, secure communication systems, and specialized spy planes, to the 'muscles' that deliver a punch, like missiles and rocket engines. They help countries see what's happening from space, communicate securely across vast distances, track and intercept incoming threats, and even manage air traffic. Essentially, they provide the advanced tools and systems needed for modern defense and security, helping their customers stay ahead in a complex and rapidly changing world, often acting as a 'trusted disruptor' by bringing innovative solutions to national security challenges.
Very Brief History: L3Harris Technologies, Inc. was formed in June 2019 through the merger of L3 Technologies and Harris Corporation, which itself was founded in 1895. This merger created a major defense contractor focused on advanced aerospace and defense technology. The company has continued to evolve its portfolio through strategic acquisitions, such as Aerojet Rocketdyne, and divestitures, like the recent sale of a majority stake in its commercial space propulsion business.
"Street Stereotype": The "street stereotype" for L3Harris Technologies is likely shifting towards a more focused, agile, and technologically advanced defense prime. With recent strategic moves like portfolio realignment, divestitures, and the planned IPO of its high-growth Missile Solutions business (though now delayed), investors are increasingly viewing it as a company strategically positioning itself for the future of warfare. The market is keenly focused on the execution of its growth strategies, particularly in missile production and space, and its capital allocation decisions, emphasizing its commitment to operational efficiency and shareholder value creation.
Subsidiaries On Linked In*: Aerojet Rocketdyne — Acquired by L3Harris, now a core part of the Missile Solutions segment.; LinkedIn: aerojet-rocketdyne
Customer Sectors & Example Clients: L3Harris Technologies primarily serves government and commercial customers worldwide, with key sectors including defense, intelligence, and public safety. Specific clients include the Department of War (DOW) and the US government, various international allies and customers (including in the Middle East, Asia Pacific, and Europe), the US Space Force for satellite constellations, the US Air Force for electronic attack missionized business jets, the Federal Aviation Administration (FAA) for telecommunications infrastructure modernization, and Lockheed Martin as a key partner and customer for THAAD and PAC-3 missiles.
New Customers / Segments They'Re Targeting: L3Harris is actively targeting new markets and expanding its share in attractive growth domains, particularly in national security both domestically and internationally. They are focusing on missile warning and missile tracking, having been selected by the US Space Force for the AMDT 3 satellite constellation and securing all five related contracts. In ISR, they are progressing on a multi-year missionization business jet pipeline, including new US Air Force electronic attack jets and international airborne early warning and control programs. The company is also leading a nationwide effort to rebuild and modernize the FAA's telecommunications infrastructure. Internationally, they are expanding sales of smart software-defined radios and counter-UAS systems like Vampire.
Supply Chain And Sourcing Geographies: L3Harris operates with a global supply base and emphasizes strengthening the industrial base through strategic partnerships. The company is actively investing in capacity and localizing production across the globe to meet customer needs and ensure sustainment. For its Missile Solutions business, L3Harris is making significant investments in facilities and equipment, including building new, highly automated factories like the 'Arsenal Of Freedom Building' for GMLRS and a new PAC-3 facility in the US. They are working closely with their entire supply chain to build production capacity faster than the industry, viewing suppliers as partners. While specific country-level sourcing details are not extensively provided, the emphasis on a 'global supply base' and 'localized production across the globe' suggests a diversified approach, with significant manufacturing expansion occurring in the United States for missile production.
Sales Geographies And Expansion Plans: L3Harris currently sells its products and solutions to government and commercial customers worldwide. The company has a strong international presence, with recent key awards and discussions across the Middle East, Asia Pacific, and Europe. Specific international sales mentioned include airborne early warning and control programs, and increased international volume for tactical communications and electronic warfare. Domestically, they are undertaking a nationwide effort to modernize the FAA's telecommunications infrastructure across the United States. L3Harris is actively expanding its global reach by leveraging a global supply base, investing in local industry, and localizing production to meet international customer needs, aiming for continued growth in international sales.
How Key Themes May Help/Hurt: The 'Modern Warfare '26: Integrators' theme strongly benefits L3Harris. As a key integrator, L3Harris is directly aligned with the theme's drivers: massive fiscal realignment towards defense spending, rapid technological advancements (especially AI-driven multi-domain solutions), and escalating geopolitical tensions. The company's focus on space-based missile warning and tracking, ISR, electronic warfare, and missile solutions positions it to capitalize on increased procurement for integrated defense systems. The theme's bull points, such as the accelerating global defense spending and urgent demand for AI-driven solutions, directly support L3Harris's strategy of investing in capacity and delivering innovative products. However, the theme's bear points, including political and legislative uncertainty in defense budgets, supply chain constraints, and the rapid obsolescence of technology, pose risks that L3Harris must continuously navigate. The company acknowledges these risks and is actively investing in its supply chain and R&D to mitigate them.

3 Main Long-Term Bull Details

Strategic Portfolio Alignment and High-Growth Markets: L3Harris has deliberately aligned its portfolio to the fastest-growing defense priorities, including space sensing, missile defense, resilient communications, aircraft ISR missionization, and kinetic effects. This strategic focus, exemplified by winning all five AMDT 3 missile tracking contracts and securing $2.4 billion in new space contracts, positions them for sustained double-digit growth in critical segments.
Operational Agility and Scaled Production Capacity: The company is making significant capital investments, including $2 billion in commitments, to expand production capacity, particularly for solid rocket motors and satellites, to meet urgent customer demand at unprecedented speed and scale. This includes new highly automated factories for GMLRS and PAC-3, allowing them to more than double capacity and reduce manufacturing times.
Strong Customer Relationships and Strategic Partnerships: L3Harris has a record order book, with $7.3 billion in orders in Q2 2026 and a backlog of $42 billion, reflecting strong demand signals and customer confidence. Their strategic decision to invest in the missile business, including a $1 billion investment from the Department of War, and securing a $12 billion framework agreement for THAAD and PAC-3 production, demonstrates their ability to forge strategic alliances that benefit both the warfighter and shareholders.

3 Main Long-Term Bear Details

Political and Legislative Uncertainty in Defense Spending: Despite overall increases in defense budgets, the allocation and timing of funding remain subject to political and legislative processes, including potential debates on Department of War budgets and the impact of continuing resolutions. This could lead to shifts in specific program allocations or delays in funding.
Missile Solutions IPO Delay and Capital Allocation Concerns: The decision to delay the Missile Solutions IPO to mid-2027 due to unfavorable market conditions has raised concerns among investors regarding capital allocation and the timing of unlocking shareholder value from this high-growth business.
Supply Chain Vulnerabilities and Production Constraints: While L3Harris is actively investing in capacity and working to eliminate single-source suppliers, the broader defense industrial base and supply chain remain critical vulnerabilities. The challenge of scaling second and third-tier suppliers, particularly for missile components, could lead to bottlenecks, cost overruns, and hinder the rapid deployment of advanced systems.

Competitors And Differentiation: L3Harris competes with other major defense primes and specialized technology firms. The company differentiates itself by aiming to be the 'trusted disruptor,' emphasizing innovation, speed, and a willingness to challenge the status quo while taking calculated risks. They highlight their leadership in missile tracking, being the only company awarded all five contracts related to missile tracking. In missile solutions, they are the only company producing solid rocket motors at scale on factory today and are expanding capacity to meet demand at a scale no one else can. Their smart software-defined radios are also positioned as offering superior sensing solutions and faster fielding capabilities. While not explicitly named as direct competitors in the transcript, other defense primes like Lockheed Martin (a partner for THAAD/PAC-3), RTX, Northrop Grumman, and Boeing operate in overlapping defense and aerospace segments.
Recent Performance & What The Market'S Focused On: L3Harris reported strong Q2 2026 results, with revenue of $5.9 billion (up 8% year-over-year) and a book-to-bill of 1.2x, increasing backlog to $42 billion. All three segments contributed to growth, with international sales up over 20%. The company raised its full-year 2026 revenue guidance to $23.2 billion to $23.7 billion and diluted earnings per share guidance to $11.80 to $12.00. However, the market reacted negatively to the delayed Missile Solutions IPO (now mid-2027), leading to a stock decline. The market is now focused on the company's continued execution in missile production ramp-up, the impact of the commercial space propulsion business divestiture, and future capital deployment strategies, including potential debt paydown or share repurchases, given the expected $4 billion of cash on hand.

Revenue Segments And Estimated Mix: Space and Mission Systems (SMS) — Mix: ~51%; Source: Q2 2026 Earnings Call; Trend: Grew 7% year-over-year to approximately $3 billion in Q2 2026. Full year revenue guidance increased to $11.7 billion. Growth driven by ISR, missionized aircraft, classified space, F-35 control systems, and air traffic control modernization. Segment operating margin was 9.8%.
Communication and Spectrum Dominance (CSD) — Mix: ~32%; Source: Q2 2026 Earnings Call; Trend: Delivered $1.9 billion in Q2 2026, up 4% year-over-year, driven by increased international volume and higher electronic warfare and data links revenue. Operating margin was 26.9%, up 230 basis points. Expected to ramp up in the second half due to strong demand for smart software defined radios and Vampire counter UAS system.
Missile Solutions (MSL) — Mix: ~17%; Source: Q2 2026 Earnings Call; Trend: Delivered 14% year-over-year revenue growth in Q2 2026. Revenue increased 16% in the retained business, partially offset by lower growth in the commercial space propulsion business being divested. Segment operating margin was substantially similar to the prior year. Full year guidance adjusted to reflect divestiture closing in August.
Product Brands: THAAD (propulsion and DAC systems)
PAC-3 (propulsion and DAC systems)
Standard Missile (interceptors)
AERIS X (Airborne Early Warning & Control)
hC2™ Software Suite
Westcam (sensors)
LHX NEXT (internal efficiency program)
Golden Dome (initiative/capabilities related to space-based missile defense, hypersonics, large solid rocket motors)
Fuzing and Ordnance Systems (including fuzes, electronic safe and arm devices, ignition safety devices, height-of-burst/proximity sensors)
AMDT 3 satellite constellation
Red Wolf (low cost modular cruise missile)
RateShield (counter UAS jamming solution)
Vampire (counter UAS system)
NGC2 (smart software defined radios)
Smart software defined radios

Bull / Bear Details

L3Harris Technologies is positioned for sustained growth as a trusted disruptor, driven by robust demand in high-priority defense missions. Despite the Missile

Thesis

L3Harris Technologies is positioned for sustained growth as a trusted disruptor, driven by robust demand in high-priority defense missions. Despite the Missile Solutions IPO delay to mid-2027 due to market conditions, the underlying business demonstrates strong operational performance, record backlog, and significant investments in missile capacity, space, and international expansion. The company's strategic alignment and execution underpin a compelling bullish outlook as of August 13, 2026.

Bull case

The Missile Solutions business is poised for "high teens" to "20%+" growth, underpinned by a $12 billion THAAD and PAC-3 framework agreement and over $20 billion in new contract negotiations. L3Harris is investing $2 billion in capacity, including new GMLRS and PAC-3 factories, to quadruple and nearly triple production, addressing urgent national security needs and ensuring long-term revenue.
L3Harris delivered strong Q2 2026 results with 8% year-over-year revenue growth and a 1.2x book-to-bill ratio. The backlog increased to a record $42 billion, providing excellent revenue visibility. Management raised full-year 2026 revenue guidance to $23.2-$23.7 billion (8-10% organic growth) and reaffirmed $3 billion in free cash flow, demonstrating strong financial momentum.
Strategic wins in space, including all five US Space Force AMDT 3 missile tracking contracts and a $9 billion pipeline, along with $3 billion in international airborne early warning programs and a $10 billion international pipeline, highlight L3Harris's expanding market penetration. International sales grew over 20% year-over-year, now comprising 23% of total revenue.

Bear case

Political and legislative uncertainties, including potential delays in the FY2027 defense budget, continuing resolutions, and election-year dynamics, create headwinds for defense spending. Management explicitly cited these factors as influencing market conditions and the decision to delay the Missile Solutions IPO, potentially impacting program funding and timing.
While L3Harris is aggressively investing $2 billion in capacity and supply chain improvements for its missile business, the broader defense industrial base still faces challenges. The rapid scale-up required to meet demand, coupled with potential bottlenecks in second and third-tier suppliers, could lead to execution risks, delays, and cost pressures despite internal efforts.
The delay of the Missile Solutions IPO to mid-2027 due to unfavorable market conditions is a material concern, impacting the timing of shareholder value realization. This strategic shift, along with the non-recurrence of prior-year product line sale gains and a $0.20 EPS headwind from a recent divestiture, could temper investor sentiment regarding capital allocation.

Bull / Bear Case

Bear Case: Despite strong operational performance, L3Harris faces significant headwinds. The delay of the Missile Solutions IPO to mid-2027 due to unfavorable market conditions, including political and legislative uncertainties (budget debates, continuing resolutions, election-year dynamics), creates a material concern for shareholder value realization and capital allocation. The stock's over 6% decline post-earnings, underperforming the broader market, reflects investor skepticism regarding these factors. While L3Harris is investing heavily in capacity, the broader defense industrial base still presents supply chain vulnerabilities and execution risks, potentially leading to bottlenecks and cost pressures. The non-recurrence of prior-year product line sale gains and a $0.20 EPS headwind from a recent divestiture also temper investor sentiment.
Bull Case: L3Harris Technologies is poised for sustained growth, driven by robust demand in high-priority defense missions and strategic market penetration. The Missile Solutions business is expected to achieve "high teens" to "20%+" growth, supported by a $12 billion THAAD and PAC-3 framework agreement and over $20 billion in new contract negotiations. The company is investing $2 billion in capacity, including new highly automated GMLRS and PAC-3 factories, to significantly increase production. Strong Q2 2026 results, with 8% year-over-year revenue growth and a 1.2x book-to-bill ratio, led to raised full-year 2026 revenue guidance to $23.2-$23.7 billion (8-10% organic growth) and reaffirmed $3 billion in free cash flow. Strategic wins in space (AMDT 3 missile tracking contracts, $9 billion pipeline) and international markets ($3 billion in airborne early warning, $10 billion pipeline) further solidify its market position and long-term value creation potential.
More Compelling & Why: Bear. Despite strong operational results and raised guidance, the market reacted negatively, with the stock falling over 6% post-earnings, underperforming the SPY. This indicates that the delay of the Missile Solutions IPO to mid-2027, explicitly attributed to unfavorable market conditions and political uncertainties, is a significant overhang impacting investor confidence and the timing of value realization. While the company's P/E ratio might have compressed post-earnings, the underlying sentiment suggests a cautious outlook. My view would flip if there was a clear resolution of defense budget uncertainties and a firm, earlier timeline for the Missile Solutions IPO, demonstrating a path to accelerated shareholder value.

Key Factors5 rows

Key Factor	Why It Matters	What To Watch	What It Signals	Where/How To Track	Free Alt Data	Paid Alt Data
New Contract Awards (Space, International, and FAA)	Significant contract wins, particularly in high-growth areas like space-based missile tracking, international airborne early warning, and critical infrastructure (FAA), demonstrate L3Harris's market leadership and provide long-term revenue visibility, expanding its backlog.	Announcements of specific contract awards from the $9 billion space pipeline and $10 billion international pipeline; successful conversion of a significant portion of the over $20 billion in new contract negotiations; specific milestones or additional phases for the $4 billion FAA contract.	Bullish: New contract awards exceeding $500 million in space or international defense; successful conversion of a significant portion of the $20 billion negotiation pipeline; additional phases or funding for the FAA contract. Bearish: Lack of significant new awards; loss of expected contracts in key growth areas.	L3Harris press releases, SEC filings (e.g., 8-K for material contracts), Department of War/Space Force announcements, international defense ministry announcements, and FAA press releases.	Defense News, Breaking Defense, Janes Defence Weekly: Industry news on contract awards; USASpending.gov: Government contract awards data.	GovWin IQ: Federal contract awards and opportunities; FactSet/Refinitiv: News sentiment analysis on contract announcements.
Book-to-Bill Ratio and Backlog Growth	A consistently strong book-to-bill ratio and growing backlog indicate robust demand for L3Harris's defense technologies and provide clear visibility into future revenue streams, reinforcing investor confidence in sustained growth.	Quarterly book-to-bill ratio (currently 1.2x, trailing 12-month 1.3x); total backlog value (currently $42 billion); management commentary on order intake trends and backlog conversion during earnings calls.	Bullish: Quarterly book-to-bill ratio consistently above 1.1x; backlog increases significantly beyond $42 billion due to new wins (e.g., from the $20 billion negotiation pipeline); management expresses confidence in accelerating backlog conversion. Bearish: Book-to-bill ratio falls below 1.0x; backlog stagnates or declines; management signals slower conversion.	L3Harris earnings releases, investor presentations, and SEC filings (10-Q, 10-K).	Industry reports on defense spending and order trends (e.g., SIPRI, Deloitte); financial news aggregators for company-specific announcements.	Bloomberg Terminal: Consensus estimates for order intake; Sentieo: Keyword searches for 'book-to-bill,' 'backlog,' 'orders' in L3Harris transcripts and reports.
FY2027 US Defense Budget Finalization	The finalization of the FY2027 US Defense Budget and National Defense Authorization Act (NDAA) directly influences L3Harris's program funding, contract opportunities, and overall revenue outlook, especially given the company's focus on national security and anticipation of a record budget.	The total proposed defense budget (White House requested $1.5 trillion, House authorized $1.15 trillion), specific line-item allocations for missile defense, space programs (e.g., AMDT 3), ISR platforms, and tactical communications. Watch for the final passage of the NDAA and appropriations bills, particularly the Senate's vote after its August recess.	Bullish: Final defense budget exceeding $1.15 trillion with strong increases in procurement and RDT&E for L3Harris's core areas; timely passage of the NDAA without a prolonged continuing resolution. Bearish: Flat or reduced defense budget; significant cuts to L3Harris's key growth programs; prolonged continuing resolution into Q1 2027.	Congressional websites (e.g., House Armed Services Committee, Senate Armed Services Committee), Department of War press releases, defense news outlets (Defense News, Breaking Defense).	GovTrack.us: Legislative progress of NDAA and appropriations bills; Congressional Budget Office (CBO) reports on defense spending.	FiscalNote: Legislative tracking and policy analysis; Quorum: Congressional activity and sentiment analysis.
Progress on Missile Production Capacity Expansion (GMLRS & PAC-3 Facilities)	Aggressive investment in missile production capacity is crucial for L3Harris to meet urgent national security demands, capitalize on the $12 billion THAAD and PAC-3 framework agreement, and drive significant future revenue and profit growth.	The opening of the new GMLRS 'Arsenal Of Freedom Building' (expected August 2026); construction progress and specific milestones for the new PAC-3 facility (expected online late 2027); announcements of further government or prime contractor funding for capacity expansion; updates on quadrupling THAAD and nearly tripling PAC-3 production.	Bullish: GMLRS factory opens on schedule; PAC-3 facility construction is ahead of schedule or new funding is announced; confirmed ramp-up of THAAD/PAC-3 production quantities. Bearish: Delays in the GMLRS factory opening; setbacks in PAC-3 facility construction; lack of further concrete commitments for capacity funding.	L3Harris press releases, earnings calls, investor presentations, Department of War/Pentagon announcements, and local news in facility areas.	USASpending.gov: Government contract awards related to L3Harris missile facilities or production; local government press releases on new factory openings.	Satellite imagery providers (e.g., Maxar, Planet Labs): Construction progress at L3Harris missile facilities; Thinknum: Job postings for manufacturing and engineering roles at missile production facilities.
Missile Solutions Business IPO Revisit/Update	The planned IPO of the Missile Solutions business was a key component of L3Harris's strategy to unlock shareholder value. Its delay to mid-2027 due to market conditions impacts valuation expectations and capital allocation, making any future updates critical for investors.	Public statements from L3Harris management regarding the re-evaluation of the IPO, commentary on market conditions, or a more precise timeline for the IPO than 'mid-2027'.	Bullish: Management provides a firm, earlier-than-mid-2027 date for the IPO or expresses strong confidence in favorable market conditions. Bearish: Further delays are announced, or management provides negative commentary on the market's receptiveness to the IPO.	L3Harris earnings calls, investor presentations, company press releases, and SEC filings (e.g., updated S-1 if the IPO proceeds).	Financial news outlets covering IPO market sentiment; industry forums (e.g., Reddit's r/stocks, r/investing) for discussions on defense sector IPOs.	Bloomberg Terminal: Analyst consensus on IPO timing and valuation; Sentieo: Transcript keyword searches for 'IPO,' 'spin-off,' 'missile solutions' in L3Harris communications.

Key Reported Metrics, Reratings Triggers & Results3 rows

International expansion is a key strategic focus, with significant pipeline opportunities. Strong growth in international sales demonstrates successful market p

Upcoming print · 2026-10-29

Key reported metrics
Metric	Last period	Why it matters
International Sales	20%+	International expansion is a key strategic focus, with significant pipeline opportunities. Strong growth in international sales demonstrates successful market penetration and diversification, crucial for sustained revenue growth.
Total Revenue (Organic Growth)	Q2 Revenue: $5.9 billion (8% y/y growth); Full-year 2026 organic revenue growth guidance raised to 8-10%	This metric reflects the overall demand for L3Harris's defense technologies and its ability to capitalize on increased global defense spending, a key driver for investor confidence amidst a 'wartime footing'.
Missile Solutions Revenue	14%	This segment is a high-growth area with significant investment and a delayed IPO. Its continued strong performance validates the investment thesis and future value creation, especially given the $20B+ contract negotiations and capacity expansion.

Last reported · 2026-07-29

Key reported metrics			Rerating thresholds			Earnings results
Metric	Last period	Why it matters	What's needed for rerating	Rerating context	Earnings date	Actual reported	Hit target?	Notes
Space & Airborne Systems Segment Revenue (Organic Growth)	2%	This segment is vital for space payloads, electronic warfare, and classified intelligence, all critical areas in the evolving defense landscape. Its performance indicates strength in high-tech defense, particularly in missile defense and space-based assets.	The Space & Mission Systems (SMS) segment, which now encompasses the former Space & Airborne Systems, needs to achieve an organic revenue growth rate of 8% or higher. This would significantly accelerate from the previous 2% organic growth of the old Space & Airborne Systems segment in 2025 and exceed the implied 6-7% organic growth rate for SMS necessary to meet L3Harris's overall 2026 organic revenue growth guidance of 7%. It would also compare favorably to peer Lockheed Martin's Space segment, which reported 7% growth in Q1 2026.	Achieving 8% or higher organic growth in the Space & Mission Systems segment is crucial for a positive rerating. This segment is central to L3Harris's strategic alignment with high-priority defense missions like space sensing, missile warning, and ISR. Strong performance validates competitive positioning, demonstrates successful execution, and de-risks overall 2026 guidance, justifying its elevated valuation.	2026-07-29	7% y/y growth	No	The Space and Mission Systems (SMS) segment, which now includes the former Space & Airborne Systems, grew 7% year-over-year, falling just shy of the 8% rerating threshold. Despite strong performance in ISR, missionized aircraft, and classified space, the market's negative reaction to the overall earnings was primarily driven by the delayed Missile Solutions IPO and capital allocation concerns, overshadowing the segment's near-miss on its growth target.
Integrated Mission Systems Segment Revenue (Organic Growth)	11%	This segment is crucial for Intelligence, Surveillance, and Reconnaissance (ISR) capabilities, a central theme in modern warfare. Its growth indicates L3Harris's success in securing classified programs and international contracts, aligning with the 'War from Home' strategy.	The newly formed Space and Mission Systems (SMS) segment, which now encompasses the former Integrated Mission Systems (IMS) segment, needs to demonstrate organic revenue growth of at least 10-12%. This performance would be crucial to drive the overall company's organic revenue growth to significantly exceed its 2026 guidance of 7%, ideally reaching 8-9% or higher.	Robust SMS organic growth (10-12%+) is critical to justify LHX's elevated valuation. It validates strategic alignment with high-priority ISR and space missions, demonstrating effective execution and strengthening its competitive position as an 'agile trusted disruptor' in a demanding defense environment, exceeding overall company guidance.	2026-07-29	7% y/y growth	No	The combined Space and Mission Systems (SMS) segment, which now includes the former Integrated Mission Systems, reported 7% year-over-year organic revenue growth. This was below the rerating trigger of 10-12% for the segment. The miss on this target, alongside the delayed Missile Solutions IPO, contributed to the stock's underperformance following the earnings release.
Total Revenue (Organic Growth)	6%	This metric reflects the overall demand for L3Harris's defense technologies and its ability to capitalize on increased global defense spending, a key driver for investor confidence amidst a 'wartime footing' and 're-industrialization via militarization'.	An upward revision of the full-year 2026 organic growth guidance to above 7%.	Hitting this threshold would validate L3Harris's strategic alignment with high-priority defense missions and demonstrate successful execution in converting its record backlog. This sustained, industry-leading growth would justify the stock's premium valuation, alleviate concerns about multiple compression, and reinforce its position as an agile disruptor.	2026-07-29	Q2 Revenue: $5.9 billion (8% y/y growth); Full-year 2026 organic revenue growth guidance raised to 8-10%	Yes	L3Harris reported strong Q2 revenue of $5.9 billion, an 8% year-over-year increase. More importantly, the company raised its full-year 2026 organic revenue growth guidance to a range of 8-10%, which is above the 7% rerating threshold. Despite hitting this target and delivering positive operational news, the stock fell over 6% as the market reacted negatively to the delayed Missile Solutions IPO (now mid-2027) and concerns over capital allocation.

Key Questions

Will L3Harris's Missile Solutions business continue to demonstrate strong growth and operational execution, validating its long-term value proposition and posit

Will L3Harris's Missile Solutions business continue to demonstrate strong growth and operational execution, validating its long-term value proposition and positioning it for a successful IPO in mid-2027, despite current unfavorable market conditions and the initial delay?

Question 2: Can L3Harris sustain its strong momentum and achieve its raised full-year 2026 organic revenue growth guidance of 8% to 10%, particularly given the broad-based growth across segments and significant international sales?
Question 3: Will L3Harris successfully convert its over $20 billion in new contract negotiations and effectively ramp up production capacity, particularly with the new GMLRS factory coming online and the $12 billion THAAD/PAC-3 framework agreement, to meet accelerating demand and mitigate supply chain and execution risks?

Earnings Transcript Summary2 rows

2026-07-29 · 2026Q2 Earnings Call

3 Things Management Is Most Focused On	Call Takeaway & Tone	Prior Quarter'S Y/Y Growth By Segment	3 Things Analysts Most Pressed On (And Mgmt Responses)	Revenue Segments
3 Things Management Is Most Focused On1. Strategic growth and market penetration: Management is focused on long-term value creation by taking deliberate, disciplined risks to enter new markets and gain share in attractive growth domains, particularly in national security and missile warning/tracking. 2. Investing in capacity and advanced manufacturing: The company is aggressively investing in capacity, R&D, and advanced manufacturing techniques, including automation and AI, especially within the Missile Solutions business, to meet accelerating customer demand. 3. Delivering on commitments and maintaining 'trusted disruptor' status: Management emphasizes earning trust by consistently meeting commitments and achieving disruption through innovation, speed, and a willingness to challenge the status quo while taking calculated risks.	Call Takeaway & ToneThe overall takeaway of the call is that L3Harris Technologies delivered a strong second quarter in 2026, marked by broad-based revenue growth across all segments and a significant increase in backlog. Management raised its full-year 2026 revenue and earnings per share guidance, reflecting confidence in continued momentum and strategic execution. While the planned IPO of the Missile Solutions business was delayed to mid-2027 due to unfavorable market conditions, management expressed strong conviction in the long-term value of the business and emphasized an intense focus on building capacity, contracting demand, and delivering for customers. The tone of the call was confident and optimistic, highlighting the company's role as a 'trusted disruptor' and its commitment to national security and innovation.	Prior Quarter'S Y/Y Growth By SegmentIn Q1 2026, Space & Mission Systems revenue was up 24% year-over-year. Communication & Spectrum Dominance revenue was up 3% year-over-year. Missile Solutions revenue was up 18% year-over-year.	3 Things Analysts Most Pressed On (And Mgmt Responses)1. Missile Solutions IPO delay: Analysts questioned the decision to push the IPO to mid-2027. Management responded that current market conditions do not reflect the true value of the business, and they prefer to wait for the market to recover while focusing on building the business, contracting demand, and delivering for customers. They noted that the majority of cash needed from the IPO is for late 2027, 2028, and 2029. 2. Missile segment growth and margins: Analysts inquired about the future growth trajectory for the missile segment, how framework agreements would materialize into revenue, incremental margins, and CapEx build-out. Management projected high-teens growth for the missile business over the next couple of years, with potential for even faster acceleration in 2027-2029 as new factories come online. They also mentioned the propulsion business growing 20%+. 3. Capital deployment: Analysts asked about the company's plans for capital deployment given a significant cash balance. Management outlined a disciplined approach: first, investing in the business (e.g., $2 billion commitments for missile capability and supply chain, IT modernization, digitization, AI); second, debt paydown; and third, share repurchases and continuing their 24-year streak of dividend growth, aiming for dividend aristocrat status.	Revenue SegmentsSpace and Mission Systems grew 7% year-over-year. Communication and Spectrum Dominance revenue was up 4% year-over-year. Missile Solutions delivered 14% year-over-year revenue growth.

2026-01-29 · 2025Q4 Earnings Call

3 Things Management Is Most Focused On	Call Takeaway & Tone	Prior Quarter'S Y/Y Growth By Segment	3 Things Analysts Most Pressed On (And Mgmt Responses)	Revenue Segments
3 Things Management Is Most Focused OnManagement is most focused on: 1. Operational Execution and Customer Commitments: Emphasizing execution with speed and discipline, meeting customer commitments, improving on-time delivery, and investing to increase production capacity, while stabilizing challenging space programs and clearing delinquent rocket motor deliveries. 2. Portfolio Transformation and Strategic Partnerships: Aligning the portfolio to the fastest-growing defense priorities, reorganizing businesses from four to three segments, and the planned initial public offering (IPO) of the missile solutions business, including a novel partnership structure with the Department of War. 3. Strengthening the Industrial Base and Capacity for Missile Production: Expanding missile production capacity with a significant financial investment from the U.S. government to build capacity faster than anyone in the industry, particularly for critical interceptor programs like THAAD, PAC-3, and standard missile.	Call Takeaway & ToneThe overall takeaway of the call is that L3Harris Technologies concluded 2025 with strong performance, marked by record orders, solid organic growth, and expanding margins, positioning the company for sustained growth in 2026 and beyond. Management highlighted successful operational execution, strategic portfolio alignment, and significant investments in high-demand areas like missile solutions and space. The tone was confident and optimistic, with management expressing certainty in exceeding previous financial targets and a clear strategy for future value creation in a dynamic defense environment.	Prior Quarter'S Y/Y Growth By SegmentFor Q3 2025, Communications Systems (CS) revenue was up 6% year-over-year. Integrated Mission Systems (IMS) organic revenue increased 17% (excluding the impact of the CAS divestiture). Aerojet Rocketdyne (AR) organic revenue increased 15% (excluding the impact of the AOT business divestiture). The year-over-year growth for Space and Airborne Systems (SAS) was not explicitly stated in the available Q3 2025 earnings snippets.	3 Things Analysts Most Pressed On (And Mgmt Responses)1. Missile Solutions Business (Long-term agreements and growth potential): Analysts inquired about continued long-term agreements and the potential for the business to grow three to five times larger. Management responded that everything is on track, expressing excitement about framework agreements with Lockheed Martin for THAAD and PAC-3, and projecting double-digit compound annual growth rate (CAGR) for the business for some time, with more details to be provided in the S-1 filing for the IPO. 2. CapEx Increase and Free Cash Flow: Analysts questioned the higher capital expenditure (CapEx) for 2026 and potential future increases for missile solutions. Management confirmed a CapEx step-up to approximately $600 million (2.5% of sales) in 2026, a 35-40% increase from 2025, while maintaining the $3 billion free cash flow guidance. They characterized it as a one-time capital investment to modernize solid rocket motor production. 3. RemainCo Revenue Outlook and Leverage to Defense Budget: Analysts asked about the revenue growth outlook for the 'RemainCo' (L3Harris excluding the IPO'd missile solutions business) and its ability to leverage a potentially larger defense budget. Management projected solid mid-single-digit growth, expecting it to be faster than the rest of the industry, and stated that L3Harris is well-positioned to deliver quicker on a significantly increased FY27 defense budget due to its agile nature and production capabilities.	Revenue SegmentsIn Q4 2025, Communications Systems (CS) revenue was up 3% year-over-year. Integrated Mission Systems (IMS) revenue increased 11% organically. Space and Airborne Systems (SAS) revenue was up slightly. Aerojet Rocketdyne (AR) delivered 12% organic revenue growth.

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2026-07-29

About Expanding Eligible Market	About Competition	About The Broader Industry	Where Things Are Headed	Updates On Theme	Broader Themes Emerging	Bullish-Leaning Quotes (Short)	Bearish-Leaning Quotes (Short)	Hiring
About Expanding Eligible MarketL3Harris is strategically entering new growth domains, securing all 5 US Space Force contracts for missile tracking (AMDT 3 constellation), and sees a $9 billion space pipeline. Internationally, they have secured $3 billion in airborne early warning and control programs since Q4, with a $10 billion pipeline across the Middle East, Asia Pacific, and Europe. International sales grew over 20% year-over-year, now comprising 23% of total revenue. The company is negotiating over $20 billion in new contracts, potentially tripling backlog, and signed a $12 billion framework agreement for THAAD and PAC-3 production, aiming to address international demand and competitor shortfalls. A new $4 billion FAA contract through 2046 will modernize US air traffic control infrastructure.	About CompetitionL3Harris highlights its unique position as the only company awarded all 5 US Space Force missile tracking contracts and the sole producer of solid rocket motors at scale for THAAD and PAC-3, aiming to cover competitor shortfalls. They emphasize offering more affordable, interoperable, and superior sensing solutions, fielding capabilities faster, and building highly automated facilities (like the new PAC-3 factory by late 2027) to meet demand at a scale no one else can. The company is "winning more than our fair share" in NGC 2 orders.	About The Broader IndustryThe industry is on a "wartime footing" due to growing security threats and increasing demand from the military and allies, leading to rising defense budgets globally. The Department of War made a $1 billion investment in L3Harris's missile business to accelerate capacity plans by 12-18 months, signaling a shift in Pentagon conversations from "whether we deliver" to "how many can we produce and how fast." Market conditions for IPOs are challenging, with "a lot of headwinds out there" (budget, CR, reconciliation, election, executive orders) impacting valuations, but defense spending is seen as bipartisan. The company also noted the importance of supply chain management.	Where Things Are HeadedL3Harris is focused on long-term value creation, building on momentum from late 2023. They expect to ramp operations on AMDT 3 and classified satellite awards, drive more international orders, and continue winning NGC 2 contracts. The company will execute on a new $4 billion FAA contract through 2046 and target $500 million in new Vampire counter-UAS system opportunities. The Missile Solutions IPO is delayed to mid-2027 due to market conditions, but the business is poised for "high teens" to "20%" growth for the foreseeable future. Full-year 2026 revenue guidance is raised to $23.2-$23.7 billion (8-10% organic growth), with reaffirmed $3 billion free cash flow.	Updates On ThemeIntegrators:	Broader Themes EmergingAI adoption in manufacturing and company transformation, software-defined products and capabilities (e.g., counter-UAS jamming via software), and the broader defense industrial base shifting to a "wartime footing" with government support for accelerated capacity.	Bullish-Leaning Quotes (Short)"Today's results are not just a 1 off strong quarter." "Our early investments in capacity along with bidding as a prime are paying off." "We are actively negotiating more than $20 billion in new contracts potentially tripling our backlog." "The future is bright for L3Harris." "Orders were $7.3 billion, yielding a book-to-bill of 1.2x." "Backlog increased by more than $1 billion to $42 billion positioning us well for sustained growth." "Revenue for the quarter was $5.9 billion, up $455 million or 8% year over year." "International sales increased $254 million up over 20%." "We are raising our full year 2026 revenue and earnings per share guidance." "Missile Solutions delivered 14% year-over-year revenue growth." "We kind of expect growth in high teens, over the next, call it, couple years at a minimum." "It is still growing 20%, which I think is hard to beat." "It was quite satisfying to see the drone fall out of the sky."	Bearish-Leaning Quotes (Short)"Market conditions have evolved and do not reflect the tremendous value we are building." "Lot of headwinds out there. Budget, CR, reconciliation, election, executive orders." "The prior year quarter included $92 million gain related to a product line asset sale." "The decrease primarily reflects a $75 million product line sale gain in the prior year that did not repeat." "Lower growth in the commercial space propulsion business we are divesting." "This increase comes even after absorbing an approximate $0.20 headwind associated with the divestiture."	HiringThe leadership team and the workforce have done a great job bringing a sense of urgency to the missile's operations including working multiple shifts. The workforce has been trained in new automated tools and is excited about the ramp-up. The company also recognized and thanked its employees for their commitment and execution.

2026-01-29

About Expanding Eligible Market	About Competition	About The Broader Industry	Where Things Are Headed	Updates On Theme	Broader Themes Emerging	Bullish-Leaning Quotes (Short)	Bearish-Leaning Quotes (Short)	Hiring
About Expanding Eligible MarketL3Harris is expanding its eligible market by aligning its portfolio to the fastest-growing defense priorities, including a novel partnership with the Department of War (DOW) to create a $4 billion-plus revenue majority-owned public missile solutions company in 2026, which will significantly expand missile production capacity. The DOW's financial investment in this new company is solely economic, aiming for greater capacity quickly and a return on investment, enabling L3Harris to build capacity for critical interceptor programs like THAAD, PAC-3, and standard missile without waiting for contracts. The company has also deepened its role as a trusted international partner, winning key awards in Europe and Asia, leveraging a global supply base, and investing in local industry to scale capacity through localized production. Notable international wins include a $2.2 billion award from South Korea for next-generation airborne early warning mission business jets, a $200 million international weather set satellite program, and over $200 million in international tactical communications and software-defined radio orders. The missile solutions business is projected to grow at a double-digit CAGR for some period to come, and the company expects to have more international software-defined radios in 2026 than in 2025.	About CompetitionL3Harris is actively reinvigorating competition in the defense industrial base, which has seen decades of consolidation, by leading the industry to meet customer needs and strengthening the supply chain. The company positions itself as 'the agile trusted disruptor' with a competitive advantage in a complex, competitive, and rapidly evolving environment where speed and execution matter. In space-based missile defense, L3Harris has a proven track record as the only company awarded contracts across all four tranches of the Space Development Agency (SDA) tracking layer, reinforcing its leadership and positioning for future awards like HBTSS. For missile solutions, the DOW's focus is on competition, scale, and speed, and L3Harris intends to win the 'race' to get products into warfighters' hands and stay ahead of competitors. The company is willing and able to compete with any and all newcomers and incumbents for tactical radio capabilities, believing its software-defined radios offer a huge advantage. In satellite manufacturing, L3Harris has invested in facilities and capacity, believing the DOW will favor companies that can deliver quickly rather than waiting for new infrastructure to be built.	About The Broader IndustryThe defense and security environment is described as one of the most demanding in decades, characterized by complexity, competition, and rapid evolution, where speed and execution are paramount. Threat environments are evolving faster than recent history, driving customer demand for advanced capability at speed and scale. There's a significant industry-wide focus on expanding production capacity, particularly for missiles, with the U.S. government making financial investments in companies critical to national security to accelerate capacity building. The industrial base is undergoing strengthening and a reinvigoration of competition. The supply chain, especially for satellite manufacturing, is a critical challenge, with the entire industry facing difficulties in scaling second and third-tier suppliers. However, the supply chain is now seeing demand signals, leading to more diverse suppliers and private equity interest in the defense industry. The potential for a significantly increased FY27 defense budget (e.g., $1.5 trillion) is seen as a major upside for the industry, with L3Harris expecting to capitalize on it quickly due to its agile nature and investments. Government shutdowns, however, can delay awards and limit revenue growth.	Where Things Are HeadedL3Harris is positioned for sustained growth, with a strategic focus on evolving its business through portfolio alignment to fastest-growing defense priorities, operational agility, and strategic partnerships. The company plans an initial public offering (IPO) of its missile solutions business in 2026, with the Department of War as an anchor investor, creating a $4 billion-plus public company focused on critical propulsion systems and other missile solutions. L3Harris's 2026 guidance exceeds previous ambitious targets, projecting industry-leading 7% organic revenue growth (midpoint of $23-$23.5 billion), low 16% segment operating margin, and $3 billion in free cash flow, supported by strong program execution and increased CapEx to $600 million. The company will announce a new 2028 financial framework at its upcoming Investor Day. Missile Solutions is expected to grow at a double-digit CAGR. The company anticipates solid mid-single-digit growth for its 'RemainCo' business, potentially faster than the industry. L3Harris expects to grow orders double digits in 2026. The company is also looking to continuously improve margins in its commercial business models through volume, efficiency, and AI adoption. The LHX NEXT cost-saving program has concluded a year early, with its principles now embedded in ongoing operations for continuous improvement.	Updates On ThemeISR:	Broader Themes EmergingRe-industrialization via Militarization: The urgent need to significantly expand missile production and strengthen the industrial base, with government financial investment to build capacity faster, indicates a broader re-industrialization driven by military demand. Fiscal Realignment towards Defense Spending: The Department of War's anchor investment in a public company and the anticipation of a $1.5 trillion FY27 defense budget highlight a significant and sustained fiscal realignment towards defense spending. AI Adoption: The company plans to leverage AI for efficiency and productivity among its engineers and sees 'upcoming adoption and utilization of AI' as a potential tailwind for higher margins in its commercial business models.	Bullish-Leaning Quotes (Short)We ended the year with a record order book and strong demand signals from our customers. All of this is positioning us for sustained growth going forward. Capacity is now the most important capability. We have the competitive advantage in this environment as the agile trusted disruptor. All of this resulted in a record backlog and order book this year, with an overall book-to-bill of 1.3 and backlog in excess of $38 billion. Our record backlog and robust order outlook underpin our 2026 industry-leading 7% organic growth. We also exceeded our LHX NEXT $1 billion savings commitment one year ahead of the plan. This business as we combine missile solutions is one that can grow at a double-digit CAGR for some period to come. Personnel has not been an issue. You know, I think we're one of the hottest companies in the industry for people to work for.	Bearish-Leaning Quotes (Short)The government shutdown delayed awards and limited additional revenue growth in the quarter and the year. Unfavorable program performance in Maritime. The supply chain is always critical in the satellite manufacturing business. I used to think with all this ramp, that seems to be the challenge. Our guidance reflects appropriate risk early in the year and the dynamics associated with administration priorities. There have been some reductions in some of the tactical radio line items.	HiringPersonnel has not been an issue for L3Harris, which considers itself one of the 'hottest companies in the industry for people to work for,' with active recruiting for both campus and experienced hires. The company is focusing on enabling its engineers (almost half its workforce) with AI to increase efficiency and productivity, aiming to achieve this without necessarily adding a significant amount of people. Robotics are increasingly being used in factories, including the missile segment. For the supply chain, the ability to hire, invest, and perform is crucial, and L3Harris is excited about the potential increase in the workforce for its missile solutions business.

NotesTable

Date	Comment	Comment Type	Comment Sentiment	Link	Price Reaction
2026-07-29	L3Harris reported strong Q2 2026 results, beating estimates with 8% revenue growth and a record $42 billion backlog, and raised full-year guidance. However, the stock fell over 6% (underperforming SPY) as the market reacted negatively to the delayed Missile Solutions IPO (now mid-2027) and concerns over capital allocation, contradicting the positive operational news.	Earnings Transcript	Negative		-6.88% (vs SPY: -8.56%)

Upcoming Events3 rows

Catalyst ID	Estimated Timing	Estimated Date Start	Estimated Date End	Catalyst	Why It Matters	Ticker Or Theme Specific	Transcript Date	Source Type
LHX_214c492f	in 2026	2026-01-01	2026-12-31	The conversion of the Department of War's $1 billion preferred security investment into a single-digit equity ownership stake in L3Harris's Missile Solutions business following its planned 2026 IPO.	This investment provides capital for capacity expansion and signals strong government backing, which could positively impact investor sentiment and the business's long-term growth prospects.	Ticker	2026-01-29	earnings_transcript
LHX_5ebbd947	later this year	2026-07-01	2026-12-31	L3Harris plans to file Form S-1 for the initial public offering (IPO) of its Missile Solutions business later in 2026.	The S-1 filing will provide detailed financial and operational information about the Missile Solutions business, offering greater transparency and potentially influencing investor sentiment ahead of the IPO.	Ticker	2026-01-29	earnings_transcript
LHX_6f7cbb36	second half of the year	2026-07-01	2026-12-31	Closing of the sale of a 60% stake in L3Harris's civil space propulsion and power business to AE Industrial Partners.	This transaction enables L3Harris to sharpen its focus on priorities for the Department of War and allies, potentially impacting portfolio alignment and future growth strategy. Management will update guidance upon closing.	Ticker	2026-01-29	earnings_transcript