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L3HARRIS TECHNOLOGIES, INC. /DE/ (LHX)·Q3 2026 Earnings Summary

Executive Summary

  • Primary Q3 2026 earnings materials are not yet available; this pre‑earnings recap anchors on S&P Global consensus and the last reported quarters (Q1–Q3 2025). We will update with full 8‑K 2.02, press release, and transcript once filed. - - - - - -]
  • LHX exited Q3 2025 with accelerating demand (book-to-bill 1.2x), 10% organic growth, and raised FY25 revenue/EPS guidance; focus areas include ISR ramps, missile/munitions capacity (Aerojet), and space sensors—key set‑ups for Q3 2026.
  • Q3 2025 non‑GAAP EPS was $2.70 on $5.66B revenue; orders were $6.7B; free cash flow was $449M, with guidance lifted to ~$22B revenue and $10.50–$10.70 EPS for 2025.
  • Stock reaction context: after Q3 2025 results, LHX rose ~5% on the beat and guidance raise; for Q3 2026, likely catalysts include bookings/award timing (Golden Dome/HBTSS/SDA), Aerojet capacity/deliveries, and cash conversion.

What Went Well and What Went Wrong

  • What Went Well

    • Consistent execution and mix resilience: Q3 2025 organic revenue +10%, segment operating margin 15.9% (8th straight YoY expansion), and book‑to‑bill 1.2x. “We delivered double‑digit organic growth … and a book‑to‑bill of 1.2 …” (CEO)
    • Aerojet momentum/capacity: AR organic growth ~15% with margin +130 bps to 12.7%; record financial backlog of $8.3B; capacity ramps (e.g., >400% increase on Mark 72 deliveries since acquisition).
    • Strategic wins: $2.2B South Korea AEW&C award post‑quarter; strong international radio wins (Germany, Czech), plus Mission Networks momentum with FAA.

  • What Went Wrong

    • Cash conversion timing: Q3 2025 CFO $546M and adjusted FCF $449M declined YoY on temporary customer payment delays; management pushed strongest cash to Q4.
    • SAS legacy development drag easing but not “done”: management noted maturing programs with improving stability but cautioned against “declaring victory” until final integration is behind them.
    • Award timing risk: government shutdown/CR dynamics slowed award timing (impacted bookings cadence and cash collections), a key exogenous risk into upcoming quarters.

Financial Results

Recent actuals (oldest → newest) and Q3 2026 consensus:

MetricQ1 2025Q2 2025Q3 2025Q3 2026E
Revenue ($USD Millions)$5,132 $5,426 $5,659 $6,011.8*
Non‑GAAP Diluted EPS ($)$2.41 $2.78 $2.70 $3.25*
Operating Margin (%)10.2% 10.5% 11.0% —
Adjusted Segment Op Margin (%)15.6% 15.9% 15.9% —
Cash from Operations ($M)($42) $640 $546 —
Adjusted Free Cash Flow ($M)($72) $574 $449 —
  • Sequential context: revenue rose from $5.426B (Q2’25) to $5.659B (Q3’25); non‑GAAP EPS moved from $2.78 to $2.70; segment margin held at 15.9%.
  • YoY context (Q3’25): revenue +7%; non‑GAAP EPS +10%.

Segment detail – Q3 2025:

SegmentRevenue ($M)YoYOperating Margin
Communication Systems$1,462 +6% 26.1%
Integrated Mission Systems$1,700 +6% 12.0%
Space & Airborne Systems$1,809 +7% 12.1%
Aerojet Rocketdyne$755 +13% 12.7%

KPIs:

KPIQ2 2025Q3 2025
Orders ($B)$8.3 $6.7
Book-to-Bill (x)1.5x 1.2x
Effective Tax Rate (non‑GAAP)9.5% (Q2) 15.6% (Q3)

Note: Asterisked values are consensus estimates. Values retrieved from S&P Global.*

Guidance Changes

FY2025 guidance (Q2 vs Q3 2025):

MetricPeriodPrevious Guidance (Q2’25)Current Guidance (Q3’25)Change
RevenueFY2025~ $21.75B ~ $22B Raised
Adj. Segment Op MarginFY2025mid–high 15% high 15% Raised
Non‑GAAP EPSFY2025$10.40–$10.60 $10.50–$10.70 Raised
Adjusted FCFFY2025~ $2.65B ~ $2.65B Maintained
CS RevenueFY2025$5.6–$5.7B ~ $5.7B Maintained (upper)
IMS RevenueFY2025~ $6.4B ~ $6.5B Raised
SAS RevenueFY2025~$6.9–$7.1B ~ $7.1B Reaffirmed
AR RevenueFY2025~ $2.8B $2.8–$2.9B Raised
Effective Tax Rate (non‑GAAP)FY202513.5%–14.5% 13.5%–14.5% Maintained
Weighted Avg Diluted SharesFY2025~188–189 ~188 Maintained
CapexFY2025~2% of revenue ~2% of revenue Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1–Q2 2025)Current Period (Q3 2025)Trend
AI/Technology & Digital OpsPalantir/TITAN integration; Shield AI autonomy; push for commercial-like procurement “Program Digital Cockpit” on Palantir Foundry to drive execution and AI‑enabled decisions Expanding deployment
Award Timing & Budget/CRSkinny PBR; reconciliation funding; admin priorities; path to $23B FY26 Government shutdown impacting timing of awards and collections Macro drag on timing
Space (HBTSS/SDA/Golden Dome)HBTSS proven; SDA Tranche 3 RFP; FY26 space growth expected Confidence on Golden Dome competitions; T3 decision awaited; factory ready for scale Pipeline building
ISR & MissionizationISR down in Q1, improving by Q2 via classified ramps ISR backlog doubled in 12 months; international momentum; bizjet missionization win in Korea Broadening growth
Aerojet Capacity & MixDouble‑digit growth targeted; large SRMs, NGI/GPI, Sentinel Mid‑teens organic; record backlog; >400% ramp for Mark 72; multi‑year contracts desired Scaling faster
InternationalNetherlands $1.1B radios; Germany/Czech wins Korea AEW&C; broad NATO/ME demand; target 25% of sales Stronger mix

Management Commentary

  • “This quarter, we delivered double‑digit organic growth, 15.9% margins, and a book‑to‑bill of 1.2 … confident in achieving our increased 2025 guidance … and positioning L3Harris for durable, profitable growth well beyond 2026.” — CEO
  • “Aerojet Rocketdyne delivered another strong quarter … operating margin expanded 130 bps to 12.7%, driven by improved program performance and cost efficiencies from LHX NEXT initiatives.” — CFO
  • “We are the world’s leading mission system integrator … the $2.2B Korea AEW&C award … lays the foundation for a long‑term franchise.” — CEO
  • “Program Digital Cockpit … aggregates data … leveraging automation and AI … now onboarding our first tranche of programs across all segments through the end of 2025.” — CEO

Q&A Highlights

  • ISR outlook: leadership changes, execution gains, ISR backlog doubled in 12 months; international opportunities (Armed Overwatch, C‑130 Morocco, Canada).
  • Golden Dome/SAS: confident on missile defense architecture; SDA T3 best‑and‑final submitted; SAS margins stabilizing as legacy programs complete.
  • Aerojet medium‑term: capacity expansions across facilities; double‑digit growth sustainable across missiles and space propulsion.
  • Contracting framework: push for multi‑year awards to underwrite capacity investments; customer supportive; aligns suppliers and delivery schedules.
  • Award/cash timing: shutdown slowed awards and DFAS processing; management assumes reopening and a busy catch‑up period.

Estimates Context

Q3 2026 S&P Global consensus versus last reported Q3:

MetricQ3 2025 ActualQ3 2026 Consensus
Revenue ($USD Millions)$5,659 $6,011.8*
Non‑GAAP EPS ($)$2.70 $3.25*
EBITDA ($USD Millions)—$1,108.0*
# of EPS / Revenue Estimates—11 / 10*

Note: Asterisked values are consensus estimates. Values retrieved from S&P Global.*

Where estimates may need to adjust: upside/downside sensitivity to (i) award timing (SDA T3, HBTSS/Golden Dome), (ii) Aerojet throughput/cost curves, and (iii) Q4 cash/working capital cadence relative to FY25 guide (foundation for FY26 trajectory).

Key Takeaways for Investors

  • Backlog and pipeline support continued top‑line acceleration; watch award timing resolution (shutdown/CR) for sustained 1.1–1.3x book‑to‑bill cadence.
  • Aerojet is a multi‑year growth engine; capacity ramps and multi‑year contracts are pivotal to monetize demand and support margin progression.
  • Space remains a high‑leverage swing factor (HBTSS, SDA Tranche 3); factory readiness positions LHX to convert wins to revenue.
  • International is expanding (goal ~25% of mix) with large missionization and resilient comms awards—supports growth and mix quality.
  • Cash conversion rhythm matters: Q3 softness was timing‑related; Q4 strength is expected—monitor Q4/FY25 delivery to anchor FY26 expectations.
  • Transformation levers (LHX NeXt, Digital Cockpit) underpin margin durability and competitiveness in faster, more commercial‑like procurement models.
  • For Q3 2026 print, the stock reaction likely hinges on three deltas: bookings/awards landing, Aerojet throughput vs plan, and beats/raises versus consensus on revenue/EPS/FCF.

Sources

  • Q3 2025 press release, financials, and reconciliations:
  • Q2 2025 press release and tables:
  • Q1 2025 press release and tables:
  • Q3 2025 earnings call transcript:
  • Q2 2025 earnings call transcript:
  • Q1 2025 earnings call transcript:
  • Market reaction context (Q3 2025):

Note on Q3 2026 materials

  • We searched for “8‑K 2.02 earnings press release Q3 2026,” “Q3 2026 earnings call transcript,” and relevant press releases; none are available yet. We will update this recap upon filing to incorporate full primary‑source results, guidance, and call commentary.