L3harris Technologies (LHX) Q2 2026 earnings summary

Executive summary

• Orders reached $7.3 billion with a 1.2x book-to-bill ratio, driving backlog to a record $42 billion and reflecting strong demand across all segments.

• Revenue grew 8% year-over-year to $5.9 billion in Q2 2026, with broad-based growth and significant contract wins in missile warning, tracking, and ISR.

• Diluted EPS rose 28% to $3.13, driven by higher volume, improved program performance, and lower expenses.

• Major strategic investment: $1 billion from the U.S. Department of War into Missile Solutions, accelerating capacity expansion by 12–18 months.

• Delayed Missile Solutions IPO to mid-2027 due to market conditions, focusing on value creation and operational execution.

Financial highlights

• Q2 revenue was $5.9 billion, up 8% year-over-year, with all segments contributing to growth.

• Segment operating income increased 9% to $942 million; segment operating margin was 16.0%.

• Net income for the quarter was $600 million, up from $458 million a year ago.

• Free cash flow was $771 million, up 37% year-over-year; operating cash flow reached $879 million.

• Backlog increased by over $1 billion to $42 billion; book-to-bill ratio was 1.2x for the quarter.

Outlook and guidance

• 2026 revenue guidance raised to $23.2–$23.7 billion, reflecting 8–10% organic growth.

• GAAP EPS guidance increased to $11.80–$12.00, despite a $0.20 headwind from the commercial space propulsion divestiture.

• Free cash flow guidance reaffirmed at $3 billion.

• Segment guidance: Space & Mission Systems ~$11.7B, Communications & Spectrum Dominance ~$8.0B, Missile Solutions ~$4.1B.

• Capital expenditures for 2026 projected at $600 million.