01—Abstract
Summary
Summary of the 10-Q filed July 24, 2025. Cited figures are marked; the original filing is the authoritative source.
L3Harris Technologies, Inc. reported a solid performance for the second quarter and year-to-date periods ending June 27, 2025.
Revenue saw a modest increase year-over-year, driven by growth in the Communication Systems and Aerojet Rocketdyne segments. Net income and diluted Earnings Per Share (EPS) also showed significant improvements, reflecting effective cost management and operational efficiencies. The company successfully completed the divestiture of its Commercial Aviation Solutions (CAS) business, which is expected to streamline operations and enhance focus on core defense and aerospace capabilities.
Financially, L3Harris demonstrated strong cash flow generation from operations, allowing for continued investment in the business and return of capital to shareholders through share repurchases and dividends. The company also refinanced its credit facilities, enhancing its financial flexibility. Despite some headwinds from unfavorable changes in estimate-at-completion adjustments in specific segments, overall profitability and operational execution remain positive.
02—Key points
Key Highlights
- Revenue increased by 2.4% to $5.43 billion in Q2 2025 compared to $5.30 billion in Q2 2024, and by 0.45% year-to-date.
- Diluted EPS rose significantly by 27.1% to $2.44 in Q2 2025 compared to $1.92 in Q2 2024, and by 31.8% year-to-date.
- Net income attributable to L3Harris increased to $458 million in Q2 2025 from $366 million in Q2 2024, and year-to-date net income was $844 million compared to $649 million.
- The company completed the divestiture of its Commercial Aviation Solutions (CAS) disposal group on March 28, 2025, receiving $831 million in cash proceeds.
- Operating income improved by 20% to $571 million in Q2 2025 from $476 million in Q2 2024, and by 31.3% year-to-date.
- The company ended the quarter with $482 million in cash and cash equivalents and has significant available borrowing capacity under its credit facilities.
- Backlog remains strong at $35.4 billion as of June 27, 2025, with approximately 45% expected to be recognized as revenue over the next twelve months.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2026, L3HARRIS Technologies, Inc. kept $0.08.
- Revenue$5.43B100.0%
- Cost of revenue−$4.09B75.4%
- Gross profit$1.33B24.6%
- Operating costs−$764.0M14.1%
- Operating income$571.0M10.5%
- Interest, other & tax−$113.0M2.1%
- Net income$458.0M8.4%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed July 24, 2025Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Revenue | $5.43B$5.30B | +2.4% |
| Cost of Revenue | $4.09B$3.94B | +3.9% |
| Gross Profit | $1.33B$1.36B | −1.8% |
| SG&A Expenses | $764.00M$884.00M | −13.6% |
| Operating Income | $571.00M$476.00M | +20.0% |
| Net Income | $458.00M$366.00M | +25.1% |
| EPS (Basic) | $2.45$1.93 | +26.9% |
| EPS (Diluted) | $2.44$1.92 | +27.1% |
| Shares Outstanding (Basic) | 187.00M189.70M | −1.4% |
| Shares Outstanding (Diluted) | 187.80M190.60M | −1.5% |
05—Questions
Frequently Asked Questions
What were the main drivers of the revenue increase in the second quarter?
Revenue increased by 2.4% to $5.43 billion driven by higher product revenues in the Communication Systems (CS) and Aerojet Rocketdyne (AR) segments, partially offset by lower product revenues in Space & Airborne Systems (SAS) and Integrated Mission Systems (IMS). Services revenue also increased, primarily in the SAS segment.
How did the divestiture of the CAS business impact the financials?
The company completed the sale of its CAS disposal group on March 28, 2025, for $831 million in cash proceeds. This divestiture is expected to streamline operations and allow the company to focus on its core defense and aerospace businesses. While it impacted segment revenues for IMS, the overall financial benefits of a more focused portfolio are anticipated.
What is the outlook for the company's debt and liquidity?
L3Harris ended the quarter with $482 million in cash and cash equivalents. The company has available borrowing capacity of $2,015 million under its credit facilities and had no outstanding borrowings under these facilities as of June 27, 2025. The company has no material issues expected with liquidity for the next 12 months and believes its current resources will be sufficient for anticipated needs.
What are the key factors contributing to the increase in diluted Earnings Per Share (EPS)?
The significant increase in diluted EPS, up 27.1% in Q2 2025, is primarily attributed to higher net income resulting from improved operating income, favorable impacts from tax resolutions and credits, and the successful management of G&A expenses, partly offset by unfavorable changes in estimate-at-completion adjustments in certain programs.
06—Continue