L3harris Technologies (LHX) Q4 2025 earnings summary

Executive summary

• Achieved record orders of $27.5B in 2025 with a book-to-bill ratio of 1.3x, reflecting strong demand and alignment with defense priorities.

• Realigned portfolio through divestitures and acquisitions, including the announced sale of a majority stake in the Civil Space Propulsion and Power business.

• Reorganized from four to three business segments, with a Missile Solutions IPO planned for 2H 2026.

• Strategy focused on high-growth defense priorities, disciplined capital deployment, and investments in next-generation missile defense and space capabilities.

• Delivered $903M in dividends and $1.2B in share repurchases in 2025.

Financial highlights

• 2025 revenue reached $21.9B, up 5% organically, with growth in all segments.

• Adjusted segment operating margin was 15.8%, up 40 bps; non-GAAP EPS was $10.73, up 11% YoY.

• Adjusted free cash flow grew to $2.8B, up 21% YoY; cash from operations was $3.1B.

• Q4 revenue was $5.6B, up 6% organically; Q4 non-GAAP EPS was $2.86.

• Book-to-bill for the year was 1.3, with backlog exceeding $38B.

Outlook and guidance

• 2026 revenue guidance: $23.0B–$23.5B, representing 7% organic growth at midpoint.

• Segment operating margin expected in low 16% range; free cash flow guidance of $3.0B.

• GAAP diluted EPS expected between $11.30–$11.50; effective tax rate projected at 15%.

• Business reorganized into three segments for 2026: Space & Mission Systems, Communication & Spectrum Dominance, and Missile Solutions.

• Sale of majority stake in Space Technology disposal group expected to close in H2 2026.