L3Harris Technologies, Inc.

Q2 revenue was $5.9 billion, up $455 million or 8% year over year. Segment operating income increased $79 million or 9%, and segment operating margin was 16%, up 10 basis points. GAAP EPS was $3.13, up 28%. Operating cash flow was $879 million and free cash flow was $771 million, up 37%; year to date, free cash flow was $584 million, $124 million ahead of prior year. Orders were $7.3 billion, book-to-bill was 1.2x, trailing 12-month book-to-bill was 1.3x, and backlog increased to $42 billion. Full-year 2026 revenue guidance was raised to $23.2 billion-$23.7 billion, implying 8% to 10% organic revenue growth, and EPS guidance was raised to $11.80-$12.00. The company reaffirmed full-year free cash flow guidance of $3 billion and maintained segment operating margin guidance of low-16%. Net interest expense was reduced by $30 million to about $560 million. The company said it expects about $4 billion of cash on hand by year-end before any potential debt paydown or additional share repurchases.

Christopher Kubasik framed the quarter as evidence that the “trusted disruptor” strategy is working and said the results reflect a multi-year operational turnaround rather than a one-off. He emphasized major wins in missile warning/tracking, ISR, international airborne early warning, and a transformed missile business with more capacity, automation, and faster delivery. He was notably upbeat on demand, repeatedly pointing to a wartime-footing customer environment, accelerating missile production, and a strong pipeline across space and missile programs.

Kenneth Sharp highlighted strong order momentum, with $7.3 billion of orders, 1.2x book-to-bill, and backlog above $42 billion. He cited revenue of $5.9 billion, up 8%, segment operating margin of 16%, GAAP EPS of $3.13, and free cash flow of $771 million, while noting increased capital expenditures and R&D investments of over 20% in the quarter. He also said missile capacity investments totaled $136 million in the quarter, total missile capacity commitments are $2 billion, net interest expense is being reduced to about $560 million, and year-end cash could reach about $4 billion before debt paydown or buybacks.

Analysts focused on the economics and timing of the missile framework agreement, the delay of the missile-business IPO, growth expectations for missile solutions, the Shield Capital venture strategy, and capital deployment. Management said the missile framework could support margins in the 15% to 18% range and that missile business growth should run in the high teens for at least the next couple of years, with the propulsion piece growing around 20% plus. On the IPO, Kubasik said market conditions do not reflect the value being built and that the team agreed to wait until mid-2027. On capital allocation, Sharp said the company will prioritize investing in the business, but also considers debt paydown, share repurchases, and maintaining dividend growth.