L3harris Technologies (LHX) Q4 2025 earnings summary

Executive summary

• Achieved record order book and strong demand, with 2025 orders totaling $27.5B and a book-to-bill ratio of 1.3x, positioning for sustained growth and industry leadership in 2025 and beyond.

• Realigned portfolio to focus on high-growth defense priorities, including divestitures, acquisitions, and the sale of a majority stake in Civil Space Propulsion and Power.

• Reorganized from four to three segments, with plans for a Missile Solutions IPO in 2H 2026 and the Department of War as anchor investor.

• Delivered on customer commitments, improved on-time delivery, and cleared legacy program backlogs.

• Strengthened global presence with key international awards and localized production.

Financial highlights

• 2025 revenue reached $21.9B, up 5% organically, with growth in all segments; adjusted segment operating margin was 15.8%, and non-GAAP EPS was $10.73, up 11% year-over-year.

• Adjusted free cash flow grew to $2.8B, up over 20% year-over-year; Q4 revenue was $5.6B, up 6% organically; Q4 non-GAAP EPS was $2.86, up 10% year-over-year.

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

• Net income for 2025 was $1.61B, up from $1.51B in 2024.

• Shareholder returns included $903M in dividends and $1.2B in share repurchases.

Outlook and guidance

• 2026 revenue guidance is $23–$23.5B, representing 7% organic growth at midpoint, with segment operating margin expected in the low 16% range and free cash flow guidance of $3B.

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

• 2026 guidance exceeds prior targets for revenue, margin, and free cash flow.

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

• New 2028 financial framework to be announced at February Investor Day.