Key financial results
- Organic revenue grew 9% year-over-year despite having 1 fewer week compared to the third quarter of 2025.
We grew organic revenues by 9% and despite having 1 fewer week as compared to the third quarter of 2025.
- Total revenue reached $6.1 billion, representing a 7% increase year-over-year.
Revenue totaled $6.1 billion, up $401 million or 7% year-over-year.
- GAAP diluted earnings per share was $3.28, which is up 33% year-over-year.
GAAP diluted earnings per share for the quarter was $3.28, up 33%.
- Operating income was $786 million, up $165 million or 27% versus the prior year.
Operating income of $786 million increased $165 million or 27% versus prior year.
- Free cash flow was $1.3 billion, representing an increase of nearly 200%.
Free cash flow was $1.3 billion, up nearly 200%.
Business segment results
- Space and Mission Systems: Space and Mission Systems revenue grew 10% to $3.1 billion, with operating margins at 10.9%.
Revenues grew 10% to $3.1 billion.
- Communications and spectrum dominance: Communications and spectrum dominance revenue increased 3% year-over-year to $2 billion, with operating margins at 25.2%.
delivered revenue of $2 billion, up 3% year-over-year
- Missile Solutions: Missile Solutions revenue increased 5% year-over-year, or 17% excluding the commercial space propulsion divestiture, with a 12% segment operating income margin.
Missile Solutions revenue increased 5% year-over-year.
Capital allocation
- Net debt leverage has been reduced from 4.3x to approximately 1.9x.
reduce net debt leverage from 4.3x to approximately 1.9x
- Capital expenditures were $179 million or 3% of revenue in the quarter.
Capital expenditures were $179 million or 3% of revenue
- Management outlined capital priorities as investing in the business, maintaining the dividend, deleveraging, share repurchases, and avoiding large-scale M&A.
Industry trends and dynamics
- International revenue grew 18% and represented 24% of total revenue as allies ramp investments in national defense.
International revenue grew 18%, and as a percentage of our total revenue was 24%, increasing in the last year or so by about 300 basis points.
- Global attention remains focused on the proliferation of drones, driving demand for counter-UAS systems like Vampire.
As global attention remains focused on the proliferation of drones, Vampire is an increasingly important in providing the critical last mile of defense
Competitive landscape
- L3Harris secured a $955 million ANDT3 award, positioning it as the sole company awarded prime contracts across all 5 space and missile warning missile defense tranches.
That win continues to position us as the only company that has been awarded prime contracts across all 5 space and missile warning missile defense tranches.
- The company was awarded an $876 million Next Gen Jammer low-band contract, bringing total awards for the program to nearly $1.5 billion.
Macroeconomic environment
- Management noted comfort operating in a dynamic political and economic environment.
We are comfortable operating in a dynamic political and economic environment
- The company routinely operates under continuing resolutions and focuses on high-priority programs to mitigate budget uncertainty.
Growth opportunities and strategies
- The backlog reached a historic $53.2 billion, supported by a book-to-bill of 3.2x.
achieve a book-to-bill of 3.2, which translated to a historic backlog of $53 billion.
- L3Harris is leveraging automation and artificial intelligence to accelerate production, such as reducing solid rocket motor quality inspection times.
We are harnessing the power of automation and artificial intelligence to accelerate delivery of PAC-3 solid rocket motors
- The company plans to invest roughly $175 million over 3 years in research and development for space capabilities.
plan to add to our technical prowess and space by investing roughly $175 million over the 3 years in research and development
Financial guidance and outlook
- Full year 2026 revenue guidance was increased by $300 million at the bottom end to a range of $23.5 billion to $23.7 billion.
increasing the bottom end of our revenue guidance by $300 million two, $23.5 billion to $23.7 billion
- EPS guidance for 2026 was raised to $12.25 to $12.35.
We are raising our EPS guidance to $12.25 to $12.35
- Full year 2026 free cash flow guidance was reaffirmed at $3 billion.
We are reaffirming our free cash flow guidance of $3 billion.
- The 2028 financial framework was updated to target 8% organic growth, approximately 16% segment margins, and $3 billion in free cash flow.
Q3 2026 results
| Metric | Result | Change |
|---|---|---|
| Revenue | $6.1 billion | up 7% |
| EPS | $3.28 | up 33% |
| Free Cash Flow | $1.3 billion | up 195% |
| Orders | $19.3 billion | Not stated |
| Backlog | $53.2 billion | up 27% |
| Segment Margin | 15.9% | consistent with prior year |
How management sounded
Balanced (+35 on our -100 to +100 scale). Management expressed strong confidence in their growth vectors and operational execution, evidenced by raised guidance and a record backlog, despite minor supply chain constraints. Management sounded more upbeat than on 20% of the 302 calls we cover; most companies sound positive on their own calls, so the comparison says more than the label.
Read the analyst Q&A summary and guidance and outlook for this call.
What to watch before the next call
- The timing of international contract awards, particularly for missionized business jets.
- The progress of the $3 billion investment in missile capacity expansion.
- The potential IPO of the Missile Solutions business in mid-2027.
Earlier calls
- Q2 2026 (Jul 29, 2026), tone Balanced: L3Harris reported second quarter revenue of $5.9 billion, up 8% year-over-year, and raised its full year 2026 guidance.
