L3harris Technologies (LHX) Q1 2026 earnings summary

Executive summary

• Achieved record backlog of $40.7 billion, with orders reaching $7.8 billion and a 1.4x book-to-bill ratio; pending $25 billion in missile production agreements.

• Q1 2026 revenue grew 15% organically to $5.7 billion, with overall growth of 12% year-over-year, driven by new program ramps and international demand.

• GAAP diluted EPS increased 33% to $2.72, reflecting improved operating performance and lower interest expense.

• Major international wins included a $2.2 billion NATO business jet program and $700 million in Canadian contracts.

• Announced $1 billion Department of War investment and filed for an IPO of the Missile Solutions segment.

Financial highlights

• Q1 revenue reached $5.74 billion, up $612 million year-over-year, with segment operating income rising to $902 million, up $125 million.

• Segment operating margin was 15.7%, up 10 basis points; overall operating margin improved to 11.4%.

• Free cash flow was an outflow of $187 million, attributed to working capital timing and higher capital expenditures.

• Cash and cash equivalents at quarter-end were $590 million.

• Dividends paid totaled $238 million; share repurchases were $296 million.

Outlook and guidance

• Reaffirmed 2026 revenue guidance of $23–$23.5 billion, with segment operating margin in the low 16% range.

• GAAP EPS guidance raised to $11.40–$11.60.

• Free cash flow guidance reaffirmed at $3 billion, with cash generation weighted to the second half.

• Segment guidance: SMS revenue ~$11.5B (mid 10% margin), CSD ~$8.0B (~25% margin), MSL ~$4.4B (mid 12% margin).

• 40% of backlog expected to be recognized as revenue in the next 12 months.