L3harris Technologies (LHX) Bernstein 42nd Annual Strategic Decisions Conference summary

Strategic outlook and financial guidance

• Expects to exceed 2026 revenue, cash, and margin targets, with a new 2028 framework targeting 8% revenue CAGR and $23–$23.5 billion in 2024 revenue, surpassing prior plans.

• Portfolio shaped for future warfare through acquisitions and divestitures, focusing on sensing, communications, and intercept capabilities.

• Defense budget projected to surpass $1 trillion, with strong tailwinds from geopolitical threats and a business-oriented Pentagon.

• Supply chain challenges addressed by adding second and third sources and ramping up to wartime footing.

• Over $40 billion backlog supports revenue visibility, with minimal near-term risk from budget delays.

Product innovation and market positioning

• Software-defined radios and resilient communications highlighted as critical, with over a million units deployed and new anti-drone software introduced.

• Counter-UAS solutions like the VAMPIRE system and jamming software developed with internal investment, targeting high-margin software sales.

• Embraces partnerships with venture-backed and AI companies to accelerate R&D and integrate advanced tech.

• International radio sales strong, especially in Europe, supporting NATO commonality and ongoing modernization cycles.

• Advocates for commercial contracting models in defense procurement to drive speed and efficiency.

Segment performance and growth drivers

• Communication systems maintain 25%+ margins, with ongoing cost reductions and growth prioritized over margin expansion.

• Next Generation Jammer for F/A-18 and other cost-plus contracts pursued for strategic entry and long-term returns.

• Tactical Data Links (TDL) acquisition expanded platform reach, including Link 16 in space, and exceeded business case expectations.

• Missile Solutions segment investing $3 billion to double or quadruple solid rocket motor capacity, with new facilities and multi-year contracts.

• Space and Mission Systems segment targets 8% top-line growth, with space business in mid-single digits and production model shifting to higher-volume, shorter-life satellites.