L3Harris Delivers Record Backlog and Strong Third-Quarter Results

The revenue outlook’s lower bound increased, while Communications & Spectrum Dominance revenue guidance fell to approximately $7.9 billion.

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Broad-based growth with robust earnings and cash flow; increases full-year guidance

• Orders of $19.3 billion drove record backlog of $53.2 billion; book-to-bill of 3.2x
• Revenue of $6.1 billion, up 7%, and up 9% on an organic¹ basis
• Operating income margin of 13.0%, up 200 bps vs. prior year; segment operating margin² of 15.9%
• Diluted EPS of $3.28, up 33% year-over-year
• Operating cash flow of $1.4 billion; free cash flow³ of $1.3 billion, up 195% compared to prior year
• Guidance Update: Increases bottom end of the revenue guidance range to $23.5 billion to $23.7 billion (prev. $23.2 billion to $23.7 billion), increases GAAP EPS range to $12.25 to $12.35 (prev. $11.80 to $12.00)

MELBOURNE, Fla.--(BUSINESS WIRE)-- L3Harris Technologies (NYSE: LHX) reported its third quarter 2026 results.

“Our team’s exceptional execution delivered solid financial performance in the third quarter. We grew backlog to record levels, underscoring the consistently strong demand for our mission-critical capabilities. Our priority now is to convert that demand into results. We will continue to invest in production capacity and differentiated capabilities across missiles and missile solutions, space, resilient communications and multi-domain sensing, which will enable us to deliver for the warfighter, our customers and our shareholders,” said Sam Mehta, President and CEO, L3Harris.

Third-Quarter Summary

Revenue of $6.1 billion increased $401 million compared to prior year, up 7%, and up 9% on an organic¹ basis, driven by double-digit growth in the Space & Mission Systems and Missile Solutions segments. Operating income margin was 13.0%, up 200 bps compared to prior year, driven by higher revenues and continued management of corporate expenses. Segment operating margin² was 15.9%, flat to prior year. Third quarter GAAP EPS increased 33% to $3.28 driven by higher volumes, a lower level of corporate expense, lower interest expense and a lower effective tax rate.

Third-Quarter Cash Generation

Net cash provided by operating activities in the quarter totaled $1.4 billion. Capital expenditures were $179 million. Free cash flow³ was $1.3 billion, up 195% over prior year. The Company ended the quarter with $11.0 billion in total debt, $2.5 billion in cash and equivalents and $550 million in short-term investments.

Backlog and Orders

Orders received in the quarter totaled $19.3 billion, resulting in backlog of $53.2 billion. Book-to-bill ratio was 3.2x for the quarter. By segment, Space & Mission Systems book-to-bill was 1.0x, Communications & Spectrum Dominance was 1.9x and Missile Solutions was 11.8x.

FY26 Guidance

Management increases the bottom end of the revenue guidance range to $23.5 billion to $23.7 billion (prev. $23.2 billion to $23.7 billion), increases GAAP EPS range to $12.25 to $12.35 (prev. $11.80 to $12.00) and maintains FY26 Free Cash Flow guidance of $3 billion³.

Third Quarter & Recent Business Highlights

• Captured a $6.3 billion (excluding escalations), seven-year undefinitized contract to scale propulsion production for the Terminal High Altitude Area Defense (THAAD) system
• Captured a $4.7 billion (excluding escalations), seven-year undefinitized contract to scale propulsion production for the PAC-3 Missile Segment Enhancement (MSE) interceptor
• Announced a $250 million follow-on contract to manufacture standard-range Guided Multiple Launch Rocket System (GMLRS) propulsion units
• Secured more than $500 million in VAMPIRE C-UAS orders from the United States and allies. Delivered the first VAMPIRE units to the U.S. Army for hostile drone defense just two months after receiving their order
• Awarded an $876 million contract modification to advance the development and production preparation of the U.S. Navy Next Generation Jammer Low Band (NGJ-LB) tactical electronic warfare system
• Opened the ‘Arsenal of Freedom’ solid rocket motor production facility in Camden, Arkansas in October – one of approximately 60 new facilities being built to address rising demand for munitions
• Completed the launch of NASA's Nancy Grace Roman Space Telescope with L3Harris' 2.4-meter Optical Telescope Assembly (OTA), which serves as Roman’s eye, as well as L3Harris’ radiation-hardened electronics, which keep the telescope in operation approximately 1 million miles from Earth

1 Organic revenue is a non-GAAP Financial Measure as defined by Regulation G and reconciled to GAAP in Table 5.

2 Segment operating margin is a non-GAAP Financial Measure as defined by Regulation G and reconciled to GAAP in Table 4.

3 Free cash flow is a non-GAAP Financial Measure as defined by Regulation G and reconciled to GAAP in Table 6.

SUMMARY FINANCIAL RESULTS

		Third Quarter								Year to Date								2026 Guidance
	($ millions, except per share data)		2026				2025				2026				2025
	Revenue
	Space & Mission Systems	$	3,093			$	2,803			$	9,049			$	7,984			~$11.9B (Prior: ~$11.7B)
	Communications & Spectrum Dominance		1,995				1,935				5,793				5,605			~$7.9B (Prior: ~$8B)
	Missile Solutions		1,057				1,008				3,101				2,773			~$4.1B (unchanged)
	Intersegment		(80	)			(88	)			(253	)			(292	)
	Segment revenue1		6,065				5,658				17,690				16,070
	Other2		(5	)			1				(5	)			147
	Revenue	$	6,060			$	5,659			$	17,685			$	16,217			$23.5B - $23.7B (Prior: $23.2B - $23.7B)
	Operating income
	Space & Mission Systems	$	338			$	299			$	941			$	826			mid 10% (unchanged)
	Communications & Spectrum Dominance		502				477				1,489				1,378			mid 25% (unchanged)
	Missile Solutions		127				124				381				336			low 12% (unchanged)
	Segment operating income1		967				900				2,811				2,540
	Unallocated corporate items and other, net (see Table 4)		(181	)			(279	)			(719	)			(823	)
	Operating income	$	786			$	621			$	2,092			$	1,717
	Operating margin		13.0	%			11.0	%			11.8	%			10.6	%
	Segment operating margin1		15.9	%			15.9	%			15.9	%			15.8	%		Low 16% (unchanged)
	Tax rate
	Effective tax rate		14.9	%			18.5	%			14.6	%			15.7	%
	GAAP EPS
	Diluted EPS	$	3.28			$	2.46			$	9.13			$	6.92			$12.25 - $12.35 (Prior: $11.80 - $12.00)
	Diluted weighted-average common shares outstanding		186.9				188.1				187.5				188.6
	Cash flow
	Cash from operations	$	1,439			$	546			$	2,223			$	1,144			$3.6B (unchanged)
	Free cash flow3	$	1,260			$	427			$	1,837			$	878			$3.0B (unchanged)
	Repurchases of common stock	$	73			$	176			$	598			$	998
	Dividends paid	$	234			$	225			$	704			$	678
1 Segment revenue, segment operating income and segment operating margin are non-GAAP Financial Measures as defined by Regulation G and reconciled to GAAP in Table 4. A reconciliation of segment operating margin on a forward-looking basis to GAAP is not available without unreasonable effort due to the unavailability of items for exclusion from the GAAP measure. We are unable to address the probable significance of this information, the variability of which may have a significant impact on future GAAP results.   2 Revenue attributable to our corporate headquarters, which includes amortization of program investment asset recognized in connection with DoW strategic investment in 2026. Year to date 2025 includes our divested Commercial Aviation Solutions business CAS disposal group.   3 Free cash flow is a non-GAAP Financial Measure defined and reconciled to GAAP in Table 6. Net cash provided by operating activities is anticipated to be approximately $3.6 billion and capital expenditures are anticipated to be approximately $600 million. As of third quarter 2026, we no longer include proceeds from disposal of property, plant and equipment, net. Prior periods have been recast for comparability.

Forward-Looking Statements

This earnings release contains forward-looking statements within the meaning of federal securities laws made in reliance on the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Examples include, but are not limited to: planned investments and capacity expansion; our pipeline and backlog expansion; 2026 guidance; the impact of recent and expected contract awards; the 2028 financial framework; the impact of the global security environment; projections of other financial items; and assumptions underlying any of the foregoing. Investors should not place undue reliance on forward-looking statements, which reflect management’s current expectations, estimates, projections, assumptions and information currently available to management, and are not guarantees of future performance or actual results. Important risks that could cause our results to differ materially from those expressed in or implied by these forward-looking statements or from our historical results include, but are not limited to, risks arising from: competitive markets; U.S. Government spending priorities; changes in contract mix; unilateral contract action by the U.S. Government or unexpected issues related to the DoW's investment in our subsidiary; uncertain economic conditions; future geo-political events; supply chain disruptions; indebtedness; interest rates and other market factors; and changes in effective tax rate or additional tax exposures. These and other important risks that could impact forward-looking statements are described more fully in the "Risk Factors" in our Form 10-K for fiscal 2025 and subsequent Form 10-Q filings. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are qualified by the cautionary statements in this section, and we have no duty to and disclaim any intention or obligation, other than imposed by law, to update or revise any forward-looking statements, whether as a result of new information, future events or developments or otherwise.

Table 1 - Condensed Consolidated Statement of Operations (Unaudited)
	Third Quarter								Year to Date
($ millions, except per share amounts)		2026				2025				2026				2025
Revenue	$	6,060			$	5,659			$	17,685			$	16,217
Cost of revenue		(4,448	)			(4,165	)			(13,169	)			(12,038	)
General and administrative expenses		(826	)			(873	)			(2,424	)			(2,462	)
Operating income		786				621				2,092				1,717
Non-service FAS pension income1		74				73				224				236
Other non-operating (expense) income, net		(1	)			25				107				51
Interest expense, net		(116	)			(152	)			(381	)			(454	)
Income before income taxes		743				567				2,042				1,550
Income tax expense		(111	)			(105	)			(298	)			(244	)
Net income	$	632			$	462			$	1,744			$	1,306
Subsidiary preferred stock deemed dividends		(19	)			—				(33	)			—
Net income available to common shareholders	$	613			$	462			$	1,711			$	1,306
Earnings per share available to common shareholders
Basic	$	3.29			$	2.47			$	9.18			$	6.96
Diluted	$	3.28			$	2.46			$	9.13			$	6.92
Weighted-average common shares outstanding
Basic		186.1				187.1				186.4				187.6
Diluted		186.9				188.1				187.5				188.6
1“FAS” is defined as Financial Accounting Standards.

Table 2 - Condensed Consolidated Balance Sheet (Unaudited)
($ millions)	October 2, 2026			January 2, 2026
Assets
Current assets
Cash and cash equivalents	$	2,471		$	1,069
Receivables, net		1,640			1,371
Contract assets		3,999			3,566
Inventories, net		1,278			1,219
Short-term investments		550			—
Other current assets		635			484
Assets of business held for sale		—			884
Total current assets		10,573			8,593
Non-current assets
Property, plant and equipment, net		2,833			2,665
Goodwill		19,999			20,010
Intangible assets, net		6,389			6,509
Deferred income taxes		72			76
Other non-current assets		3,940			3,342
Total assets	$	43,806		$	41,195
Liabilities, mezzanine equity, and equity
Current liabilities
Current portion of long-term debt	$	1,815		$	673
Accounts payable		2,182			2,461
Contract liabilities		3,107			2,262
Compensation and benefits		500			482
Other current liabilities		1,237			1,235
Liabilities of business held for sale		—			113
Total current liabilities		8,841			7,226
Non-current liabilities
Long-term debt, net		9,181			10,443
Deferred income taxes		1,436			1,114
Subsidiary Series A preferred stock conversion feature		203			—
Subsidiary warrants		163			—
Other non-current liabilities		2,755			2,777
Total liabilities		22,579			21,560
Mezzanine equity
Redeemable subsidiary Series A convertible preferred stock		987			—
Total equity		20,240			19,635
Total liabilities, mezzanine equity, and equity	$	43,806		$	41,195

Table 3 - Condensed Consolidated Statement of Cash Flows (Unaudited)
	Third Quarter								Year to Date
($ millions)		2026				2025				2026				2025
Operating Activities
Net income	$	632			$	462			$	1,744			$	1,306
Adjustments to reconcile to net cash provided by operating activities:
Depreciation and amortization		267				309				837				913
Share-based compensation		(1	)			35				48				83
Net periodic benefit income		(70	)			(66	)			(209	)			(216	)
Share-based matching contributions under defined contribution plans		51				64				158				200
Net investment gains		(37	)			(7	)			(114	)			(11	)
Change in fair value of subsidiary preferred stock conversion feature and warrants		50				—				50				—
Deferred income taxes		63				245				245				151
(Increase) decrease in:
Receivables, net		369				(91	)			(306	)			(474	)
Contract assets		(299	)			180				(437	)			(454	)
Inventories, net		(6	)			(33	)			(61	)			53
Other current assets		26				4				(153	)			(18	)
Increase (decrease) in:
Accounts payable		106				(131	)			(263	)			(93	)
Contract liabilities		169				(86	)			825				91
Compensation and benefits		121				42				16				67
Other current liabilities		14				(227	)			(74	)			(495	)
Income taxes		23				(177	)			18				144
Other operating activities		(39	)			23				(101	)			(103	)
Net cash provided by operating activities		1,439				546				2,223				1,144
Investing Activities
Capital expenditures		(179	)			(119	)			(386	)			(266	)
Proceeds from disposal of property, plant and equipment, net		13				—				20				9
Proceeds from sales of businesses, net of cash divested		539				—				539				831
Cash used for short-term investments		(550	)			—				(550	)			—
Other investing activities		(4	)			(10	)			(15	)			(37	)
Net cash (used in) provided by investing activities		(181	)			(129	)			(392	)			537
Financing Activities
Proceeds from issuance of subsidiary Series A preferred stock, net		—				—				973				—
Repayments of long-term debt		(3	)			(3	)			(115	)			(614	)
Change in commercial paper, net		—				(260	)			—				210
Repurchases of common stock		(73	)			(176	)			(598	)			(998	)
Dividends paid		(234	)			(225	)			(704	)			(678	)
Other financing activities		1				104				18				105
Net cash used in financing activities		(309	)			(560	)			(426	)			(1,975	)
Effect of exchange rate changes on cash and cash equivalents		1				—				(3	)			18
Net increase (decrease) in cash and cash equivalents		950				(143	)			1,402				(276	)
Cash and cash equivalents, beginning of period		1,521				482				1,069				615
Cash and cash equivalents, end of period	$	2,471			$	339			$	2,471			$	339

Table 4 - Reconciliation of Revenue, Operating Income and Margin to Segment Revenue, Operating Income and Margin - Non-GAAP Financial Measures Reconciliation (Unaudited)
	Third Quarter								Year to Date
($ millions)		2026				2025				2026				2025
Revenue (B)	$	6,060			$	5,659			$	17,685			$	16,217
Other1		5				(1	)			5				(147	)
Segment revenue2 (D)	$	6,065			$	5,658			$	17,690			$	16,070
Operating income (A)	$	786			$	621			$	2,092			$	1,717
Unallocated corporate items:
Amortization of acquisition-related intangibles		147				192				497				579
LHX NeXt implementation costs3		—				25				—				99
Business divestiture-related losses3		17				—				27				17
Acquisition, divestiture and transaction-related expenses3		9				10				49				40
Change in fair value of deferred compensation plan liabilities		(3	)			25				35				48
Segment investment offset3		—				—				39				—
Other items4		11				27				72				40
Unallocated corporate items and other, net		181				279				719				823
Segment operating income5 (C)	$	967			$	900			$	2,811			$	2,540
Operating margin (A) / (B)		13.0	%			11.0	%			11.8	%			10.6	%
Segment operating margin5 (C) / (D)		15.9	%			15.9	%			15.9	%			15.8	%
1 Revenue attributable to our corporate headquarters, which includes amortization of program investment asset recognized in connection with DoW strategic investment in 2026. Year to date 2025 includes our divested CAS disposal group.   2 Segment revenue is a non-GAAP Financial Measure as defined by Regulation G. We use segment revenue because it reflects the aggregate results of our segments without the impact of corporate headquarters or divestitures. We believe this metric provide investors a more complete understanding of factors and trends affecting our business.   3 Refer to Key Terms on page 11.   4 Includes a portion of management and administration, legal, environmental, compensation, retiree benefits, corporate eliminations and other. Year to date 2025 also includes the divested CAS disposal group.   5 Segment operating income and margin are non-GAAP Financial Measures as defined by Regulation G. We use segment operating income and margin to evaluate our core operating performance because it reflects the aggregate performance results of our segments without the impact of unallocated corporate items and it includes income from investments that are operationally aligned with our business segments. We believe these metrics provide investors a more complete understanding of factors and trends affecting our business.

Table 5 - Organic Revenue - Non-GAAP Financial Measures Reconciliation (Unaudited)
	2025
	Third Quarter												Year to Date
($ millions)	GAAP				Adjustments				Organic				GAAP				Adjustments				Organic
Space & Mission Systems	$	2,803			$	—			$	2,803			$	7,984			$	—			$	7,984
Communications & Spectrum Dominance		1,935				—				1,935				5,605				—				5,605
Missile Solutions1		1,008				(103	)			905				2,773				(103	)			2,670
Intersegment		(88	)			—				(88	)			(292	)			—				(292	)
Segment revenue		5,658				(103	)			5,555				16,070				(103	)			15,967
Other2		1				—				1				147				(146	)			1
Total revenue	$	5,659			$	(103	)		$	5,556			$	16,217			$	(249	)		$	15,968
1 Includes our divested Space Technology disposal group in prior periods.   2 Includes corporate headquarters and our divested CAS disposal group in prior periods.

Table 6 - Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow - Non-GAAP Financial Measures Reconciliation (Unaudited)
	Third Quarter								Year to Date
($ millions)		2026				2025				2026				2025
Net cash provided by operating activities	$	1,439			$	546			$	2,223			$	1,144
Capital expenditures		(179	)			(119	)			(386	)			(266	)
Free cash flow1	$	1,260			$	427			$	1,837			$	878
1 Free cash flow is a non-GAAP Financial Measure as defined by Regulation G. As of third quarter 2026, we no longer include proceeds from disposal of property, plant and equipment, net. Prior periods have been recast for comparability. We use free cash flow to evaluate business performance and overall liquidity, and it is a performance metric in our annual incentive plan. We believe free cash flow is useful because it represents the cash generated from operations after reinvesting in our business that may be available to return to stockholders and creditors through dividends, share repurchases, and debt repayments, or to fund acquisitions or other investments. However, the entire amount of the free cash flow is not available for discretionary expenditures because of certain mandatory expenditures, such as debt repayments.

Key Terms

Description		Definition
Acquisition, divestiture and transaction-related expenses		Transaction and integration expenses associated with the Aerojet Rocketdyne acquisition in 2025; external costs related to pursuing acquisition and divestiture portfolio optimization; non-transaction costs related to divestitures; costs related to the carve-out and planned MSL public offering; salaries of employees in roles dedicated to planned strategic transaction activity; and resolution of a procurement contract matter.
Business divestiture-related losses		In 2026, includes a loss recognized in connection with the Space Technology disposal group divestiture, which consists of certain product lines of our Space Propulsion and Power Systems business and the space portion of our Space & Sensors division reported in our Mission Solutions segment through the date of divestiture. In 2025, includes a loss recognized in connection with the CAS disposal group divestiture.
LHX NeXt implementation costs		Includes costs related to workforce optimization costs, incremental IT expenses for implementation of new systems, third-party consulting expenses and other related costs, including costs related to personnel dedicated to this project. The implementation phase of LHX NeXt was completed in fiscal 2025.
Orders		Total value of funded and unfunded contract awards received from the U.S. Government and other customers excluding unexercised contract options and potential orders under ordering-type contracts, such as indefinite delivery, indefinite quantity (IDIQ) contracts.
Segment investment offset		Adjustment to eliminate the effect of net investment gains or losses on segment aligned investments included in segment operating income.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20261028668249/en/

Investor Relations Contact:
John Sweeney, CFA, 321-724-3676
investorrelations@l3harris.com

Media Relations Contact:
Sara Banda, 321-306-8927
media@l3harris.com

Source: L3Harris Technologies

Key Terms

book-to-bill financial

The book-to-bill ratio compares new orders a company has received (bookings) to the products or services it has invoiced or shipped (billings) over the same period. It matters to investors because a ratio above 1 means demand is outpacing fulfillment and the company may grow revenue or build backlog, while a ratio below 1 suggests slowing demand and possible future revenue weakness — think of it as new customer orders versus what the company actually sold.

diluted eps financial

Diluted earnings per share (EPS) shows how much profit a company makes for each share of stock, assuming all possible shares from stock options or convertible securities are used. It provides a more conservative estimate than basic EPS, accounting for potential share increases that could dilute ownership. Investors use diluted EPS to get a clearer picture of a company's true profitability on a per-share basis.

non-gaap financial measure financial

A non-GAAP financial measure is a way companies present their financial results that excludes certain expenses or income to show how they believe their core business is performing. It matters because it can give a clearer picture of how the company is really doing, but it can also be used to make results look better than they actually are.

undefinitized contract regulatory

A contract awarded before final price, scope, or delivery details are settled, where the buyer and seller agree to proceed while key terms remain to be negotiated. It matters to investors because revenue, profit margins, and cash flow tied to the work are uncertain until the contract is definitized, similar to starting a building project with only a rough plan — costs and timelines can change once the details are fixed.