L3Harris Technologies, Inc. Q1 FY2026 earnings call

Chairman and CEO Chris Gabasic thanked Ken Bedingfield and welcomed new CFO Ken Sharp. He discussed the global security environment driving urgency around readiness, resilience, and modernization. Mentioned backlog almost doubled to over $40 billion, revenue grew over $600 million or 15% organically, operating income increased by 125 million. Highlighted key orders in missionized aircraft, solid rocket motors, software-defined communication products. Talked about the new missile company AXIV. CFO Ken Sharp walked through performance, noting revenue growth, segment operating income increase, earnings per share growth, free cash flow outflow, and investment in innovation and capacity increased 44% in the quarter. Also discussed segment results for space and mission systems, communication and spectrum dominance, and missile solutions. Chris Gabasic highlighted agile approach to innovation and growth, including recognition for Missile Warning Missile Defense business, investment in counter UAS system, and support for Artemis II mission

Space and mission systems delivered revenue of $3 billion, up 24% year over year. Communication and spectrum dominance delivered revenue of $1.9 billion, up 3 percent. Missile solutions revenue was $1 billion, up 18%, and segment margin was 12.5%, up 110 basis points. Space and mission systems segment margin increased 60 basis points due to improved program performance partially offset by increased material purchases and increased investment in research and development. Communication and spectrum dominance segment operating margin increased 60 basis points due to higher sales of resilient communication products, night vision devices, and a favorable legal settlement, partially offset by higher investments in customer demonstrations, prototypes, and research and development. Missile segment margin increased due to mix in volume and a gain on the sale of legacy assets partially offset by net unfavorable EAC adjustments

Reaffirming full year revenue guidance of 23 to 23.5 billion, representing 7% organic growth at the midpoint. Maintaining segment operating margin guidance of low 16%. Increasing both the bottom end and top end of our GAAP EPS range by $0.10 to $11.40 to $11.60. Reaffirming free cash flow guidance of $3 billion, with cash generation weighted to the back half of the year. Reaffirming segment level revenue and segment margin guidance. Consistent with past practices, not contemplating impact from planned missile solutions IPO, Department of War investment, or planned sale of a majority stake in space propulsion business

Questions and answers include discussions on SMS and CSD growth profile, space business details, awards with Munitions Acceleration Council, ISR portfolio growth, communications business budget request and participation, R&D investment in communications, revenue guidance conservatism, classified work percentage, protection on ground side for multi-year agreements, material spend at Missile Solutions and supplier protection, space pipeline expansion