Executive Summary

Q1 2026 results and transcript are not yet available in SEC/IR sources; no 8‑K Item 2.02 or earnings call transcript was found for the 2026 window, so this recap anchors on prior-quarter trends (Q1–Q3 2025) and current Wall Street consensus for Q1 2026.*
L3Harris delivered solid momentum through 2025: revenue grew from $5.13B (Q1) to $5.66B (Q3) with adjusted segment operating margin holding at 15.6–15.9% and non‑GAAP EPS of $2.41 → $2.70 .
Guidance was raised in Q2 2025: FY revenue to ~$21.75B (from $21.4–$21.7B), non‑GAAP EPS to $10.40–$10.60 (from $10.30–$10.50), and adjusted FCF to ~$2.65B, despite a tax‑rate headwind of ~$0.30 at the midpoint .
Consensus for Q1 2026 stands at ~$5.40B revenue and ~$2.69 EPS, with EBITDA near ~$0.98B, setting the bar for the upcoming print.*

What Went Well and What Went Wrong

What Went Well

“We delivered another strong quarter… eighth consecutive quarter of year‑over‑year adjusted segment operating margin expansion” (Q3 2025), with revenue up 7% (+10% organically) and non‑GAAP EPS $2.70 .
Record orders and book‑to‑bill: $8.3B and 1.5x in Q2 2025, broad‑based across segments, supporting backlog growth and visibility .
Aerojet Rocketdyne posted double‑digit organic growth and margin expansion (13.3% in Q2; 12.7% in Q3) on missile and munitions volume ramps; SAS and IMS improved margins via LHX NeXt savings and asset monetization .

What Went Wrong

Cash generation softness in Q3 2025: CFO $546M (‑30% YoY) and adjusted FCF $449M (‑38%) on customer payment delays; strongest cash generation expected in Q4 .
SAS margin pressure in early 2025 from challenges on classified development programs (Q1: 10.9%, down 140 bps); Q2 SAS margin down 30 bps on mix despite operational improvements .
Tax reform raised the effective tax rate on non‑GAAP income to 13.5–14.5% (from 11–12%), trimming FY non‑GAAP EPS guidance by ~$0.30 at the midpoint .

Financial Results

Headline financials vs trajectory and Q1 2026 consensus

Metric	Q1 2025	Q2 2025	Q3 2025	Q1 2026 (Consensus)
Revenue ($USD Billions)	$5.13	$5.43	$5.66	$5.40*
GAAP Diluted EPS ($)	$2.04	$2.44	$2.46	$2.69*
Non-GAAP Diluted EPS ($)	$2.41	$2.78	$2.70	— (primary EPS consensus shown above)*
Operating Margin %	10.2%	10.5%	11.0%	—
Adjusted Segment Operating Margin %	15.6%	15.9%	15.9%	—

Segment revenues and margins (trajectory)

Segment Revenue ($USD Millions)	Q1 2025	Q2 2025	Q3 2025
Communication Systems	$1,352	$1,376	$1,462
Integrated Mission Systems	$1,592	$1,622	$1,700
Space & Airborne Systems	$1,611	$1,787	$1,809
Aerojet Rocketdyne	$629	$698	$755
Corporate Eliminations	$(52)	$(57)	$(67)
Total	$5,132	$5,426	$5,659

Segment Operating Margin %	Q1 2025	Q2 2025	Q3 2025
Communication Systems	25.5%	24.4%	26.1%
Integrated Mission Systems	12.8%	13.2%	12.0%
Space & Airborne Systems	10.9%	12.3%	12.1%
Aerojet Rocketdyne	12.1%	13.3%	12.7%

KPIs

KPI	Q1 2025	Q2 2025	Q3 2025
Cash from Operations ($USD Millions)	$(42)	$640	$546
Adjusted Free Cash Flow ($USD Millions)	$(72)	$574	$449
Orders ($USD Billions)	—	$8.3	$6.7
Book-to-Bill (x)	—	1.5x	1.2x

Note: No Q1 2026 8‑K or transcript was found in the 2026 window; results are not yet reported .
Consensus values (*) retrieved from S&P Global.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Company Revenue	FY 2025	$21.4–$21.7B	~$21.75B	Raised
Non-GAAP Diluted EPS	FY 2025	$10.30–$10.50	$10.40–$10.60	Raised (net of ~$0.30 tax headwind)
Adjusted Segment Operating Margin	FY 2025	Mid–High 15%	Mid–High 15%	Maintained
Adjusted Free Cash Flow	FY 2025	$2.4–$2.5B	~$2.65B	Raised
Effective Tax Rate on Non‑GAAP Income	FY 2025	11.0–12.0%	13.5–14.5%	Raised (headwind)
Weighted‑Avg Diluted Shares	FY 2025	188–189	~188	Lower share count
Capex	FY 2025	~2% of revenue	~2% of revenue	Maintained
CS Revenue / Margin	FY 2025	$5.6–$5.7B; ~25%	$5.6–$5.7B; ~25%	Reaffirmed
IMS Revenue / Margin	FY 2025	~$6.3B; high 11%	~$6.4B; ~12%	Raised
SAS Revenue / Margin	FY 2025	$6.9–$7.1B; low 12%	~$7.1B; low 12%	Raised revenue
AR Revenue / Margin	FY 2025	~$2.8B; mid 12%	~$2.8B; mid 12%	Reaffirmed

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 2025)	Previous Mentions (Q2 2025)	Current Period (Q1 2026)	Trend
AI/technology initiatives (LHX NeXt, digital ops)	Targeting $1.2B gross savings; enterprise digitization roadmap	Embedding AI‑enabled tools across business; operating system rollout	Not yet reported	Expanding execution
Procurement reform & commercial model	Advocacy for FAR/TINA modernization; more commercial‑like buys	Mix of cost‑plus for dev, fixed‑price for production; faster awards	Not yet reported	Policy tailwinds
International demand (Europe/NATO)	Netherlands ~$1.1B radios; partners in Poland/Germany/UK	Germany/Czech awards; book‑to‑bill >1 across segments	Not yet reported	Strengthening
SAS mission networks / FAA	Newark telecom upgrade; ~$1B sector, good margins	FAA volume buoyed SAS revenue	Not yet reported	Improving mix
Aerojet capacity/missiles	AR growth; tactical motors, interceptors; investments in VA/AR/AL	12–15% organic growth; margin expansion on performance	Not yet reported	Ramping capacity
Tax reform	—	EPS headwind via higher non‑GAAP ETR (13.5–14.5%)	Not yet reported	Headwind to EPS

Management Commentary

“We delivered another strong quarter… eighth consecutive quarter of year‑over‑year adjusted segment operating margin expansion” (CEO, Q3 2025) .
“We posted our highest organic growth in six quarters and achieved a record book‑to‑bill of 1.5x” (CEO, Q2 2025) .
“Monetization of legacy end‑of‑life assets and LHX NeXt cost savings drove margin expansion” (CFO, Q2 2025) .
“Golden Dome aligns with our investments in missile warning/tracking and solid rocket motor capacity; we’re ready to deliver” (CEO/CFO, Q2 2025) .
“Mission Networks is in our sweet spot—telecom infrastructure upgrades across thousands of sites” (CEO, Q1 2025) .

Q&A Highlights

Awards and backlog: all segments >1.0 book‑to‑bill in Q2; AR nearly 2.0x; backlog expected to grow through year‑end .
SAS program challenges: tens of millions of negative EACs on legacy fixed‑price development programs nearing completion; margin recovery expected as risk burns down .
International radios/programs: confidence in Europe driven by interoperability and resilience; multi‑year modernization programs .
Contracting posture: faster awards without taking outsized risk; mix of cost‑plus for development and fixed‑price for production .
Tax reform: raised non‑GAAP ETR to 13.5–14.5%, ~$(0.30) EPS headwind at midpoint, offset by stronger H1 performance .

Estimates Context

S&P Global consensus for Q1 2026: Revenue ~$5.40B*, EPS ~$2.69*, EBITDA ~$0.98B*, with 10 revenue and 11 EPS estimates.*
Implications: With FY 2025 margin stability and segment mix momentum (CS international, SAS mission networks, AR missiles), consensus embeds ongoing execution; sensitivity sits in SAS mix recovery and AR capacity ramps versus tax‑rate headwinds .
Consensus values (*) retrieved from S&P Global.

Key Takeaways for Investors

Q1 2026 print is pending; benchmark expectations at ~$5.40B revenue and ~$2.69 EPS.*
Watch SAS margin progression and program mix—Q2/Q3 operational performance improved despite earlier classified development headwinds .
AR missile capacity and awards remain a secular driver; double‑digit organic growth and mid‑12% margins bolster consolidated performance .
CS remains a margin anchor (mid‑20s%) on resilient comms and software‑defined radios; international wins support growth .
Tax‑rate headwind is real but guided; overall FY 2025 EPS and FCF were raised and share count lowered, supporting per‑share metrics .
Cash generation cadence is back‑end weighted; Q3 delays were timing‑related and Q4 was expected to be strongest .
Policy/contracting reforms (commercial models, faster awards) and Golden Dome architecture decisions are potential multi‑year catalysts across SAS and AR .

Values retrieved from S&P Global.*

L3HARRIS TECHNOLOGIES, INC. /DE/ (LHX)·Q1 2026 Earnings Summary