L3Harris (LHX) 30 Jan 252024 Q4 Earnings call transcript

Company Profile

Participants

Daniel Gittsovich	executive
Christopher Kubasik	executive
Kenneth Bedingfield	executive
Peter Arment	analyst
Myles Walton	analyst
Douglas Harned	analyst
Sheila Kahyaoglu	analyst
Ronald Epstein	analyst
David Strauss	analyst
Seth Seifman	analyst
Gautam Khanna	analyst
Gavin Parsons	analyst
Michael Ciarmoli	analyst
Richard Safran	analyst
Kenneth Herbert	analyst

Call transcript

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Operator

Good morning, ladies and gentlemen, and welcome to the Fourth Quarter 2024 L3Harris Technologies Earnings Call. [Operator Instructions] This call is being recorded on Thursday, January 30, 2025. I would now like to turn the conference over to Dan Gittsovich. Please go ahead.

Daniel Gittsovich

Thank you, Joanna. welcome. and morning, Good

earnings morning fourth and our quarter guidance. a and this website. we financial Earlier published XXXX supplemental provided also our earnings We've on are me our Ken. Chris today, results presentation Joining release detailing

matters include that statements uncertainties constitute forward-looking cause actual results Today's involve certain statements. assumptions risks, discussion that will materially. and could These to differ

information, release and more SEC earnings please our reference For filings.

in financial measures, which reconciled the also earnings will measures release. discuss non-GAAP We to are GAAP

Chris. to over it turn I'll that, With

Christopher Kubasik

Good thank by on our making Okay. and with our that us commitments framework. Trusted and record delivered everyone, Dan. We year positions XXXX well morning, you, strategy ended our for executing progress for the backlog We the XXXX towards Disruptor future.

all LXHarris the of trusted AI X-year and marked by and and agile, entrants, rapidly critical security as such for as fast, customers and company between a and LX We're of delivering XXXX we gap capabilities needs forming the allowing are The merger now solutions partnerships modern We was anniversary us new combination formed that nimble while Harris. new evolving primes pivotal traditional across meet the transformative autonomy, differently. a to operates the year our national the around between domains. the warfare. span that

the electronic munitions, for around supporting and demand night-vision goggles and Domestically, cyber strong support areas commitment software-defined remains reflecting world. programs radios, our the we missiles, systems, our to strong a Internationally, homeland with in advanced defense as new our national key priority and resilient allies administration for for saw such comps. space,

innovation we start-ups These and Disruptor with AI-enabled Trusted and faster to focusing advanced of accelerating collaboration and capital-backed technologies. and remain Partnerships Palantir speed, enhancing cornerstone ability a our needs meet are culture our effectively. emerging strategy. customers' solutions more a on venture partnerships In of XXXX,

establishes competition, us the the to franchise jamming support as We in our worth accomplishments F-XX Let this dollars a billions pods which of Jammer me highlight airborne Next-Gen year. of long-term fleet. won key some of production

the our award a capability. Our on programs to leader and and motor rocket allied Glide interceptor for provide previously next-generation with solidifying as propulsion ] [ content business won are drive billion global wins manufacturing in $X large to and technology motor IDIQ resilient Navy solid solid ZUS on U.S. we won Sentinel growth position Phase in the rocket for the decades and a the We communications come. our Interceptor Along design to will programs, forces. U.S.

software-defined ground, into XX platforms. U.S. all communications ensuring X the our broadband and and forces are domains. resilient collaboration are space-based Link connectivity and utility, its next situational awareness we assets, Over will reach maritime that across and business expanding critical By allied integrating have years, space air, enabling deliver seamless XX and to terminals secure Link across

of replicator in to all a command-and-control Disruptor operating thousands collaborative swarming work, Trusted This integrating Innovation the prototype Defense autonomous startups, As was venture-backed advanced by led to initiative system Unit the enable our by a or to hundreds LXHarris, advances testament with team a project by of commercial domains. partnering capable selected assets. autonomy technologies strategy DoD's even at

shaping unmatched capabilities allied U.S. with Our of these scalability rapid ensuring expertise, warfare, and future open algorithms, meet a combining our maintain in edge environments. competitive By integration third-party the mission system architecture providing forces are flexibility supports demand. of and contested to we

to his our our will experience, Monday, to CFO. excellence As in President to strategically sustained in operational Ken recently sector responsibilities profitable of I extensive Ken leadership continue align took as effective Aerojet saw steps the his and week, growth. With press appointed you drive has addition team drive last strong been defense performance. Rocketdyne

lead by NeXt to Communication strategic the extended on LHX role further enterprise segment. elevated head partnerships Systems to [indiscernible] Mehta's the also our has to while We've collaboration been focus continuing elevate Sam organization, enterprise-wide drive directly savings led we Wood the me which transformation. achieved continue excellent has She to accelerating results. cost been for as while and Heidi to last will report year

to family's enjoy want of After distinguished first I Rocketdyne. chosen in Rocketdyne to long-term thank to Niebergall for on retirement. has Lastly, leadership to His down Ross then and contributions positioning a as Aerojet has step well-deserved his Ross career, health for CTO a and as focus instrumental his President LXHarris Aerojet success. been

been Chairman Board industry. leading of the the Aerospace voice Governors Association, also I'm for have pleased to Industries the elected of for the

an maintaining I critical. and navigates partnering edge drive talent has strengthens administration colleagues, country incoming with Congress to our the to competitive landscape, advantage. never our ingenuity the global increasingly industry our U.S. look world-class and forward more technological of leverage threat our that innovation complex As been my

drive to to growth evolving clear: ahead Looking our remain XXXX, mission-critical our profitable priorities while needs. meeting customers'

details our results. on I to it provide to will financial now turn Ken

Kenneth Bedingfield

good Chris, morning, and Thanks, everyone.

execution. real was quick. was billion, EPS XX% and was year operating organically. cost continued full XXXX and recap Revenue $XX.XX. savings me Let strong Non-GAAP X% reflecting $XX.X margin Segment up XX.X%,

cash flow XX% increase working growth to effective of capital management. grew by Free earnings and an $X.X driven billion, representing

XX.X%. billion. For the and free in quarter, came margin flow was X% $X revenue Non-GAAP over up with EPS organically was a billion, segment cash fourth $X.X of operating $X.XX,

of computing the $X.X our reflecting delivered to lower largely revenue due results. the X% of gradual billion, Organically, our to a volumes divestiture year-over-year, F-XX transitions down development from related as segment down Turning was revenue SAS mission primarily TR-X hardware ramp. more X% antenna fourth to quarter business. production

completion. cost challenges due some development programs by fixed our in price to basis offset of of XX on are in Operating space that the later savings stages margin was XX.X%, LHX NeXt primarily up partially and points

resilience This results IMS with pleased execution and strength expanding and the and reflects margin with confident this favorable in IMS momentum and delivered strong continues up business perform. X% of mix. by strong $X.X performance as of a revenue it points. XX.X%, to billion, XXX basis feel the at of program We're

demand $X.X Operating of equipment. by DoD to billion, a driven of CS heavier X% deliveries communications resilient of was software-defined achieved customers. mix margin driven by XX.X% U.S. up revenue

international and NATO demand winning based key other momentum, international strong remind delivery with particularly and programs seeing you, on I'd fluctuate But mix are quarterly into domestic expanding We profiles. markets. and international allies

margin XX.X%, and grew an X% supported basis lower solid up XX production volume Rocketdyne by with by of operating propulsion. offset motor points, Aerojet progress in on space rocket

it turn me Chris operational let some achievements XXXX. Now back to cover to for

Christopher Kubasik

space, Aerojet our start and We noncore for our Rocketdyne for further orbit completed me X to satellites of antenna businesses. with acquisitions, Tactical products one ordinance Let in the the our leadership we and also Tennessee portfolio. and integration strengthened Links Data FDA and Aerojet the We MDA. divested delivering position

satellites X meets just the for our the XX in space in our satellite milestone progress noteworthy continued in X Our expertise a of was XXXX, segment highlight to agility space under advanced infrared the of program. the our we the milestone momentum tracking A XX tranche superiority program. of target successful to engineering systems payloads with considering vehicles, achievement layer significant customer's vehicles rigorous and design struggled backlog a detect, and prime. no in years, speed, months completion team. record just of with satellites SAS in gain a FDA's space equipped reaching as XX this confirms reflects hypersonic review threats, requirements Completing and This track

global tranche satellites are tracking missile These part constellation, support already LEO of across integrated those awarded With X including we and Force's Space satellites providing efforts to defense. on continue and XX advance X, orbit, to the X, the deterrents.

role expand tranche horizon, system. are our opportunity in building to well positioned we on With layered missile defense the X this critical the

Dome defense needs Trump defense Furthermore, for this capability evolving our Iron positions executive administration's of the with the of support shield homeland. aligns development the us closely order an and U.S. well to directing recent missile the

provides significant to our exceeded LHX exceed overall and confidence Xx, million. cost XXXX, In This savings made $XXX savings on strong also target We've in progress ability our target. our initiative. reaching NeXt accelerate gross cost by our we performance

facility are enhanced end year $X We management. XXXX, and This savings expecting exceeding commitment chain to expansion, of operational efficiency, billion cost driving billion rationalization in now our is the $X.X supply by initiative a margin early. achieve cumulative

At its decision-making. same efficiency allow DOGE, embodies greater speed principles to and the core, as drive LHX NeXt to tailored data-driven

and improvements sharpen This needs inefficiencies program our to and and shareholders. evolving enables to end-of-life simplifying value value. unlock more across to us customer policies and while are our assets internal focus to for our monetizing operations eliminate We supply effectively chain, driving creating streamlining respond

Back to you, Ken.

Kenneth Bedingfield

Turning to guidance XXXX. for

$XX.X to We the $XX.X expect billion X% billion, revenue midpoint. of of organic at growth representing

business our Our a as we towards year transaction. full guidance work solutions to continue closing aviation commercial the includes of

driven is high Segment disciplined reflecting to investments cost expected operating be transformation. execution working anticipated Free be to supported $X.X billion by strong management. billion cash growth, drive continued to continued XX%, profitability is $X.X mid- flow capital and program NeXt higher margin to savings, to and LHX by

administration. risk appropriate assume a and early no posture the other the the dynamics Our impacts. and resolution in associated new or year We reflects 'XX through of delays guidance March funding continuing with

orders has issued but executive to administration several that results. not significant a are our impact on assessed, have are still The expected being XXXX

revenue officers assess QX U.S. product bookings of impact against on intake. could particularly these as and orders can existing on our the effect and new deliver CS, rapidly we However, government contracting 'XX order an see executive at which contracts,

peers acquisition-related This aligns are for of reporting Beginning change the assets. underlying has no and in adjustments with cash. of our exclude from many non-GAAP XXXX, following our revising impact profitability we to investors, our of on reporting comments EPS amortization intangible or

$X.XX, for share. change would diluted EPS XXXX, been $X.XX been impact reflecting this If have had non-GAAP per of applied an

the Our be of XXXX at the representing non-GAAP to in projected growth of to is EPS $XX.XX range midpoint. XX% $XX.XX,

in expect is budgetary that the of to in At a grow be Operating to $X.X reflecting constraints low the range. abate XXXX. we XX% revenue margin $X.X to segment the sector billion to space level, in expected SAS to range is expected billion,

maritime demand low with is IMS as billion programs and for $X electronics in revenue munitions $X.X to operating by margin well XX% the advanced range. in as increased at projected an solutions driven space billion

CS increasing in revenue demand for our XX% is anticipated billion $X.X resilient to by high $X.X supported to with margins equipment. billion range, communications software-defined the be

double-digit billion, reach business. by Rocketdyne is missile are range the Margins approximately Aerojet we fueled as continued mid-XX% to improvements. to the expected expected solutions in in operational growth be drive $X.X

between quarters. to of in weeks revenue that and be should certain our As varying In your and is particular, considered want in guidance, quarter number a variability EPS the some in in quarters short we in will QX result we XX-week modeling. highlight XXXX XXXX set

reflects on sheet are of a repurchasing shares to competitive our balance will at our in and delivering dividend capital target X.X. that value of X.Xx, commitment shareholders. exceeding of We With strengthened our a XXXX. with Our billion to focused maintain $X our and XXXX leverage ended deployment strategy least achievement, we net

approximately none expected another derisk plan Additionally, XXXX. with solid we working significant assets no $X.X had billion transfer levels are loss To in in and funding third in party further impact gain in we performance of pension advantage cash pension sheet, to taking a to on and with attractive our and year 'XX balance interest no contributions flow, environment. rate our and of or little liabilities

by quarter reduction complete end pension the income, of is nonservice action noncash expect We this in first FAS guidance. in in our resulting a reflected to 'XX, which

in performance financial last our we Considering low at and Investor achieve updating continue segment LHX to expect the NeXt increasing deliver, year XXXX margins also framework in operating confidence savings our XX% XXXX. the cost that to Day strong XXXX will to program we in and are the announced our our growing

and in of CAGR XXXX, share We cash CAGR representing billion target with a representing in $X.X upside X% free XXXX on are continuing sales further basis. organic to per flow double-digit cash, billion a $XX

strong I'm strength of underscoring in our proud our tremendous been talent made execution, This one of has year progress team. of transformation, team of portfolio the the and and growth XXXX. the our

our challenges results. and the We to in ability demanding record strategic agile with have us on backlog discipline achieving for to execute our face shareholders. our we priorities, commitments deliver a to to resilience, strong remain our and but and has of focused ability demonstrated even customers From faced dynamic have and allowed be advancing delivering the key environment, on deliver

on opportunity momentum, about growth. before our and is us this innovation we meaningful. sustained on us focus profitable to continue I'm positions excellence As The well strategic operational what's And ahead. build for excited

With to turn back that, Chris. it I'll

Christopher Kubasik

delivering steadfast we ahead, national with we look that and to priorities. our align solutions As our innovation driving remain commitment security mission-critical in

threat LXHarris we stand the innovation navigate complex environment, an at national increasingly of continues As forefront and to defense.

it's Whether adaptable, stay next are we arsenal resilient nation's beyond or threats. and [indiscernible] decisive software technologies This convergence vision give the in for to Department the providing open the cutting-edge success Our Defense in in capabilities, platforms. ensure solutions our is interoperable our allies hardware, that AI of rooted ahead traditional and every also of democracy mission scalable, concept space-based and edge. communications, that of It's evolving domain. advanced munitions enabling goes

key ensuring that a the recent technological the principles ecosystem. my to modernize reflect letter advancing efficiencies, In These defense to DOGE, collaboration and dedication national our recommendations I the outlined edge. U.S. maintains strengthening to

We Committee. to come ideas forth encourage submit to DOGE others and the

We to in playing and ideas supporting allies continue bring new that world. are administration pivotal excited to around work the and life role the to with and the protect our homeland our other a missions these

the The for sets disruptive XXXX. industry defense incoming stage administration's change of the transparency and understanding in

our and are We defense innovation, well in a period agility, to and expect we policies. positioned priorities adapt. With speed to of commitment unprecedented evolution

change play support that our nation's role this fighter, to a the strategic new and chance objectives. seize with we This excited presents era pivotal we redefine how driving are war forward in opportunities align and a to

is the to proud work protect effort. With deep democracy, empowering to play that in a critical commitment to role collaboration, the fighter, who a global central and maintain have war they stability. Our we are this to ensuring innovation tools

for open Joanna, the lines questions. let's

Operator

Arment [Operator Instructions] Your comes from question at first Baird. Peter

Peter Arment

out where maybe inauguration, discussions? the how kind you finished, the recommended had you just think any to you of leaders before you this active wrote heard to letter Have have any just you on you recommendations. X is many and do which start Chris, Or feedback? to and a how And which the DOGE of compressed. and an kind that. going Obviously, on think times overhang thinking called you're play seen the with We've of lot I just all you've of is it's the been bureaucracy, group. DoD out impacts DOGE valuations a

your So I'd thoughts. curious be

Christopher Kubasik

this Thanks, I'm we a similarities Yes. regulation they're I how the excited with to and doing DOGE, And as -- is think past in and put to we've The about got been and what reduce risk, year. to and the policy tried nation, parallel each intended. as Peter. place every as well I

the all they've after When and or cumulative believe effect mitigated. these back step actually you a risk more have created I procedures than policies actually decades, few risk resolved reduction of

in feedback lots positive from So question, Congress. Pentagon the week, other your to a received last of answer of of classified was meetings. members couple I

just trying a lot to I'm people letter. have think start I the of dialogue. read the really

role. a plays Congress think I

this And important I write several role. to a fighter role. be The letters. I industry their think give war the ecosystem DoD a plays it's plays I others of and perspective. for part think to know have started

ones better fighter really I There's the threw we quicker?" better different to war and people ones. say, trying get And to out get recommendations. and sit down capability It's "How just the go probably to can X start faster or dialogue,

And an there's in I'm I excited think, the said, XXXX. about as be future. I to unprecedented going And change

brings. one let's the and future to And won't. some what and be adapt take plan those it. be will But able companies, others maybe We to see of of advantage

Operator

question from Research. Myles next comes Wolfe The Walton at

Myles Walton

'XX placeholder flesh about then for at of accelerating? specifically on then free 'XX. the how growth in much that for increase NeXt out million versus got million, the million customer? of in savings $XXX you've margin cash of flow $XXX Can in midpoint, actual what drops and the in to savings also through you $XXX growth Ken, LHX And

Kenneth Bedingfield

Yes, I'll one. take that

aligned well profile top with a we've the 'XX, free it 'XX. to In out. 'XX cash in that We're growing laid bit the think terms I pretty accelerated and growth 'XX, flow, of growth line

the opportunities kind being in F-XX in of development more climbing on hardware 'XX, are production 'XX, and As but ramp then -- a TR-X, there's with down in resulting ramp bit couple ramp a 'XX. growth, accelerating we've top still items that some better line, for mentioned that our

little 'XX. that of a challenges revenue as some international 'XX, 'XX space There's bit to and drive in potential bit do space a then IMS. get budget awards at We little opportunities see into the of well will pulled

in then profile to from margin better we and XXs of a 'XX. today in bit So low high a XXs are in mid- to and little 'XX, continued growth where 'XX expansion 'XX

capital would of cash will profile will XX. both the to through, management, then say, in flow think you 'XX in and that that. the do And support team it continue free I kind I run working if effective And growing

still works. of NeXt LHX we're look our company. at the some the about there's will of how least to savings question, result opportunity holding we in To for that of the target as XX% at that, margin timing And obviously

that in also a on certainly various in the factor 'XX It was got complete to that percent contracts XX% be to in got at rate expansion. will You margin 'XX well. expansion then place the contributor margin 'XX certainly in any the in It strong supporting margin as low point we've and time.

So cost to opportunity. what seeing to working think target we'll kind as try delivery terms if above in margin we of certainly to hard the of the work that XX% is drive the opportunity set. that I of in [indiscernible] into that -- actual now, that we're every that's But of savings can day. see we team to And on the

Operator

Douglas The at next from question Harned Bernstein. comes

Douglas Harned

here? flow the got But to Where the margin. in expansion place XX% a Because above that to wanted exports, of for software to new waveforms, sort of margin there how There's could still going I seems get you've sales lot with allow range. for it Communications the business. ingredients seem potential right this through. guidance things commercial XXXX looking your line is in of more that lot a upside, where contracts the see is you're -- some like Systems the at XX% to real LHX is that NeXt in below margin

Kenneth Bedingfield

Appreciate Yes. Thanks, it. Doug.

out of As I'll I couple a things. point mentioned, I'll just --

to the in early got we're 'XX, in prepared It's in the the business. as we've from go and certainly, year, looking at it to As we're perspective. continue I about a and certainly thinking perform mentioned risk-adjusted remarks,

the has produce ability team CS to demonstrated to margins. generate product

margins CS, terms at I would things. say a of 'XX in just for at looking So of couple

evaluating deliveries. comes One, I mix a between the that perspective, here as international about there. kind we've of U.S. think we're in DoD From software certainly and well as talked chunks

go So well upgrades are high-margin of terms opportunity the strong really see we've high-margin waveform the got that we and both products in into to continue product where as drive as integrated business. driving waveforms deliveries for opportunity to

great compression certainly a related the team from We're of the the And really U.S. the an a in higher [indiscernible] we saw that job deliveries at doing margin fourth been then quarter international. perspective, for CS versus cost the LHX of of NeXt integrating mix the 'XX. to has end in was mix DoD

doing guidance. So great I know continue And on working segment CS is do a be job. off will the meet, we'll and work beat, think not to team think our the I that. team if to I

So feel in year. opportunity, and good about update later we'll you the the

Christopher Kubasik

finally seeing chime and just and Doug, and we're I'll more systems. opportunities CX more bid in. win to CX

in going market the So selling waveforms the is that just you beyond software said. the defined

to we're tailwind. of some to and more a I approach, that's systems additional getting network So think and going us give finally

segments, one components. all think probably supply all the of the this has I -- electronic the the impact given highest from chain, inflation on

positive, we So that, But EX our and LHX only but savings. trend have with is offset not NeXt, absorb to we're optimistic. and the

Operator

Sheila question comes next Kahyaoglu from at Jefferies. The

Sheila Kahyaoglu

Maybe the Ken, I'll LHX $X.X follow-up, of billion NeXt. on

to top on bottom your high raised an the margin. drops XX and $XXX XX% extra about million through it's of You line, bps by it peer

most? talk through some that that there. seeing track come So driving KPIs just What's you where of could maybe really if like opportunities? you are And about those the you

Christopher Kubasik

we not had -- Supply finally I we're year Ken start and and chain, and yes, Yes. only the management. a places. of building then supply seeing variety now pretty from our but on first which materials it getting only chain, a good subcontract resilience the in not materials the a I'll savings, is probably indirect easier we're we're working think little let did of direct

and at drivers. continuing rationalization roles and responsibilities. facility to are the those to look We're big the structure think I So org going and be

I So to we similar there's some think what buckets additional before. opportunities, had

to the business that to quickly. digitize as in employees mentioned, factored the and the to But And as also, the we're making guidance. also I company allow transforming well investments had data get parallel, into necessary our

efficient savings. in employees. an run just it's a billion the place better gross for not reinvesting the $X.X cost business, even more and rate We're make to it So work

So net you that down.

XX%, bps said, on Ken such. percent you in complete the the time, as as comes and XX And at know, even depending accounting over

So think success been I it's and amazing accomplishment. a huge

the X.X very size to my of taken right We merger. did We've will company, hit almost proud else, Anything of is $X impressive we in on Ken? that. pretty the at years, of in out the the X X opinion. $XXX And given in the cost million that Tack billion years. which

Kenneth Bedingfield

of I were to would savings A in delivered did savings. just labor, had add, was some around decisions we we some the Sheila, that on make that we difficult but certainly realize -- cost chunk 'XX. labor

results on cost probably the That's how little actual opportunities. hard systems transformation quickest in work, the working facilities, flow EACs realization through the some a savings. of the turning into to into the then that chain and time more the mentioned EACs, and the savings through flowing and supply costs of Chris the bit some actual turn we into other

that. So tracking we're certainly

generation also businesses, agreements the how to programmatically do new ordering long-term on but So we like certainly, delivering that and agreements, thing. sort that, the through in KPIs, against actually then question terms the of and things of savings, those through the savings, your of on track

the right The delivering. team metrics. got we've think aligned got into fully continues think profile contribute approach. 'XX. I the We've 'XX margin certainly the to is it and I and right to So And

Operator

of Our Ron comes from Epstein next of Bank America. question

Ronald Epstein

start-ups? could the with Broadly, out some a Chris, got change, given technology, that about are how like an administration, venture-oriented more thinking new thinking of the now bolt-on in Is investment are you're something has thinking the you and that be That's how that? maybe in to right there the some to push Boeing about anything assets towards for you M&A? about things sale. new maybe regard with say, environment there

Christopher Kubasik

this administration will I more allowing be question. Great acquisitions. probably towards do favorable think Yes.

in strategically. prior not even to X And It made we know, acquisitions able did you XXXX. were competition. made perfect approved. sense for we X They eliminate administration, As us get in the

Relative AI way and of we think and is hot more more partnership at really a look some I there's have we've tried market, partnerships opportunities. this I interesting to to the -- take approach. and

to I what Palantir XXXX doing modernization. bidding that actually could that a try we're in highlight the control awarded that several a have be with and be We competitively next command on in will and network we as months actually team opportunities specifically. couple deal with next-gen army

have go win those. even course, and we opinion, find with But comes my in partners AI it's when autonomy. Of work to to to them it easier, and

venture-backed small I different think we companies XX up parts of now. own to

we're So through. that pulling technology

the to niche expand nothing acquisition our step, anything, or type a if a come fill be capability. But way next we do would to yet. has And bolt-on the

of continue them traction. of not of to get We review whole and get a inbound many lots lot calls, and

buying we playbook We're We're the stock. We're margins. back the transforming our I like growing company. have.

goals, hit that. and No exceptions, we our have exclude grown flow just consecutive free X exclude this, operationally. we up In straight will when no fact, years, margins XXXX cash revenue, our

Just done. against that good and playbook, hard and we're cash X what it to margin flow team years. executing free And organic proud has straight growth, old-fashioned and the on of argue expansion

Operator

Strauss David from Barclays. question The next comes of

David Strauss

to quarter revenue taking deal And much were time that A much there? what And CAS, think I what for what you exactly couple the and I is assuming how guess is close? so I That's On EACs, XXXX. but mentioned you're guess. assumed that for fourth in it, they what then of divestiture, the thing. first -- Ken, clarifications,

Kenneth Bedingfield

are From other and Thanks, -- to a [indiscernible] there's regulatory different in through same the and and venture aspects joint parties all processes agreement the XXXX. that just that. on There some perspective, an working getting Yes. we're David. some in room

transaction we close a do We XXXX. [indiscernible] were kind XXXX like of perspective, it guidance will in and close, From felt didn't. that that, anticipate

We having to kept update. have

it. we So to obviously just it would can when each it include out just than we closes. quarter, thought having back update then once we And rather

reflect So that easiest was we kind the thought way to of business. that

I wouldn't timing, No to it. north the how impact that And in business terms XXXX. business from a of We revenue trends other. the $XXX is on terms or in think million of growth somewhere level going looks. at be that do $XXX it's of the million, company In of perspective major predict

that positive fourth EACs did EAC, at level quarter. the company the question to in deliver your on one, we

well, full delivered we year for net positive positive As 'XX. the EACs EAC, of

So when see we million EACs positive the XX-K, file somewhere you'll XXXX. I for think of $XX-ish

able programs. some as to program hard, program I 'XX. EACs couple have And the think legacy see that business prime some around we've with in we about moved kind programs But And into talked of work face These a that, even our classified work positions, are working of of while. we're of positive we've activities. space generate in strong IMT for in were that a integration just as types through some performance test-type are challenges, seeing issues been we of through and the aspects and even those of programs

really don't we performance. 'XX, project at positive look we EAC or As predict

And guidance we're programs to to comment you in did 'XX, on as and for the our flat 'XX. to on perform strong the want positive in we our generate able that? our assumes that across generally segments. would will performance hopefully guidance and net Chris, EACs that programs have EACs be the So and upside and performance

Christopher Kubasik

and is I And what on nothing thousands easy EACs. finds but Ken just on want team is a literally have its said And way is to complicated. to, nobody deliver of we David, perfect, we this do programs, and emphasize these what commitments.

creative our just here, adds our And take and LHX up, it but occasionally, of other couple savings. NeXt there's meet We take commitments. of challenger, we we and tens ideas, dollar million million innovative our and

the news. bad We excuses. all And get. stuff the all And what is we're news margins We inclusive you don't continue run the a that and day team what think the I back you up culture out. on. What these good of business see going make to are wakes find don't to And every built, the that's focused way we've that's deliver. and way and to

Operator

JPMorgan. comes The next at from question Seifman Seth

Seth Seifman

Maybe just to And charges. margin magnitude where space are the of things of how program I completion to those the we risk between on the close then in think about kind think nearing of how those programs? completing up being and landed? And materials we remains? there much that Should on the kind guided kind that, follow you mentioned the difference

Kenneth Bedingfield

space through. working would classified a a program we're say I Seth, couple I Yes, from so we've guess a of high at perspective, got level, programs

significant percent are, I complete. a We mentioned, as at

them We to do XXXX. to expect manage through continue those XXXX. We'll programs we'll risk to monitor continue through --

did space 'XX, negative about across couple probably or programs. realize During negative EACs million of we $XXX those of a adjustments

And clearly, were offset to to largely hard, the Chris' team comment, as able works as we that.

So But some through I way think And us expect the it. continue we're I programs, any to working those comfortable is work. than 'XX. what And we'll the that's of we'll, that. the comment guided in probably things. with know can't for got further data approach, good coming very I nature we as a given the for we've kind team's and early the risk in that 'XX. do XXXX behind part, customer about get think of about in most to milestones

So...

Christopher Kubasik

couple X I've are programs. high-risk A a price on programs, my same fixed you X, the think clear these And price back on it's some fixed And development I hear are -- premerger. development think views from fixed lot story going everyone. of pretty these I years been price

shouldn't in assume that run through the all cases And prime. we So these. we're have you to

the So such. when you to have and prime complicated with gets little more integrate it even

grow missile we're TR-X just -- these as on profitable tracking red continue and order the said, end Ken things get a zone, every the sequentially So in got zone and to and use of football we we're is later each analogy, to business, focus in and which the to in this year. win kind the the SDA

Operator

question The next comes Cowen. Khanna from TD Gautam at

Gautam Khanna

Ken, wondering of objectives AJRD? your was your I you role could some with now elaborate if on at increased

Kenneth Bedingfield

the at the as demand in addressing there. of look the is issues only market also Yes. support the our question. in Aerojet geopolitical Sure. Rocketdyne, There but I'm that excited solid for out and motors of for absolutely threats opportunity. amount country, really the [indiscernible] Thanks incredible think an needs mission allies not critical are priorities we its And I to about are clear.

do increasing capacity everything we So are and making making we're to sure of business. to missile sure on we that have We'll certainly been side the can be that we absolutely investments the drive capacity, that. doing our making

really I continued the maximize backlog think thinking about efficiency really that It's got some we space solid there, drive investments position and We've XX-year our looking propulsion how side. like on really got, we we On performance side, X- business. that think, how a make capability. an the to side about deliver opportunities at and of for how business that and on

that, then And we've to important really clear been think there, which important as terms I returning I there's in is moon. of program, country. business including that's priority think Artemis a the some the And a

certainly continue flow So Aerojet at we profitability very on perspective. get really of on continuing leadership and a from make to much finance commitments and cash delivering increasing on commitments focused that our and to focus to and delivering our kind trying the sure there, back growth

and on in have take in got Board's just finance place, of allowing to additional well confidence me place both in the think this we've things. on I team say the highlight would in I the or put Aerojet as as role strong Chris' does side that

we've I not to them with across So I and working for look just the forward of also proud built, deliver all [indiscernible]. but am to Aerojet, team results, that

Operator

comes of from Gavin UBS Financial. The next question Parsons

Gavin Parsons

the growth The then size do targets -- the And drag have outperformance? fully incorporated? NeXt revenue CAS savings still XXXX LHX from just the you could also clarification, a on

Kenneth Bedingfield

of will our And does certainly as an effect in revenue the remind revenue. everyone NeXt, well as impact of on does have through from model. price but the cost-plus same it are growth run on longer-term impact So on kind driving as through, fixed the primarily cost those LHX EAC I we programs programs, savings it terms also

thinking as XXXX of as I As it maybe half we in of headwind look would cost at be growth think terms and projections, savings, would our a of revenue growth. it to about maybe incremental that

I part in a revenue not of and in CAS from -- from clear, think revenue in terms business. a your It is was guidance is in then Solutions the perspective. perspective. case XXXX framework it XXXX And question Commercial of second wasn't And XXXX Aviation

'XX, then 'XX have close did it just in didn't in guidance. update again, noise system to wanted the so include as we And to in we having we expecting and that much to as

revenues. billion for in Solutions Aviation XXXX Commercial So the in $XX 'XX, the question. framework not that answers I hope

Operator

The next question comes from at Michael Ciarmoli Securities. Truist

Michael Ciarmoli

to Ken I and Chris. wanted in direction, go same I that guess

what drives that doubling backlog 'XX the So strip when do from guys growth out that CAS you rate thinking really to in 'XX 'XX you the of CAS? about framework, see the and

Christopher Kubasik

Yes.

first Let me to think portfolio. the going all, with is -- one, that I'll look the we national start We've take our what defense strategy happen. current portfolio, we and at And well, of Michael.

a space, cyber, There's lot munitions. be and comms, maritime, ISR focus in going of to

We a of those multibillion-dollar in areas. have businesses each

going I kind So portfolio to core growth. think the fuel is some of

to or that their some has budget, that's comms course, industry, talked for think network. has Paycom need about And on Space of of with the which specific focus the the impacting correct We and Force the the the been but going challenges had whole region I and by XXXX.

drag So I get get in let's negotiation letter, let's where and drag, if it just tailwind we think which have is we're competition, the The is a the fast. even I we from a and a maybe and NeXt, go portfolio, little like you of cost LHX yes, why if one some DOGE is question to or these about have a pricing data RFP the bid and scenarios, cost-plus bit in submit there. prior my out, truth an things will, environment going

[indiscernible] to a quick of XX have relatively not Let's months bid. do auditing

think we're that think a I I how with it of going cost more to base, So lower win regard. business in so

XX% on we're I there international. our around been business There's still a think out is lot orders international, XX%, such. and of executive from

end by customer. FMS, an foreign perspective, comes that But nationally the the sales local is at money countries military day, ultimate the of funded from the or from

that a So tailwind to us. provides I think

clear they want share been happening. the that and/or these each of administration has I pretty their think countries fair budgets. to That's increase their pay

business sale. of half other commercial our is The direct

not even process. So that to have through go FMS the does

examples We're with of AI. Palantir. the hard I couple at with gave a looking partnerships

what an and growth these we XXXX, I going disruptive from percent and the team by I I well. so, think as capital call extra partnerships and of can plus or believe does venture get fast?

yesterday, the current kind of So look all areas when up just I for border those popped something of customs the comms again, We control. a the and administration. at and on focus border security, provide

southern are collaboratively, at for on the that have comms X It seems working the least agencies military. these We border. the

us that and opportunity to synced that provides network. have capability And

guess and I see our So AI, security, between international the our we lower border a portfolio, billion. to cost path base, $XX

Kenneth Bedingfield

solid but starting the Michael. couple from would a in I And Aerojet this of certainly, perspective. on in ISR, as from international to as Yes. perspective, Jammer a in kick CS, motor mean win, we International back well growth to I both remarks, in hardware starting well. Next-Gen 'XX, 'XX as demand 'XX. to in a little the has rocket a delivery space ramping, little volume-wise talked kick about really my add, things, prepared just bit pause F-XX in

Operator

Richard Safran at The Seaport next question comes Global. from

Richard Safran

the et I So and that industry contract price almost Pentagon fixed impact cetera. without to escalators, [indiscernible] inflation contracts, you recognition a of I'd about think development like the ask

you these coming do implemented? you I think Now you changes rewards how good assuming major if be changes think agree, see there you going Do get with know the more to And to quickly environment? want are contracting to execution?

Christopher Kubasik

everything I and reminder, and been have I've days and the I it's XX as Yes. the met believe to read think with, a seen inauguration. people since only I've based on

So real going things are real, quick.

earlier, there more organization, overall than which a desire or But person an DOGE It's quicker. enterprise. whole go is desire, is to And mentioned I the a X. a

pretty come and suggestions the the ideas think I are going quickly. to

of be things that by as middle ideas and affect better elimination said, changes and could that XXXX. These calendar the out, some of year, end the there there's regulation. I'm sure this The threw or are by policy maybe there. bureaucracy out So I will I just

are people over time. government, the and work I that is, know work the for in hampered the they're the hardworking grown have regulations fact, and by This doing people good that dedicated [indiscernible] just nation. Pentagon, and in work up They the in

are traditional that of are with companies that think And straddling the solutions, systems. entrants. partnerships the as aren't that the going industry, can get working said, closed kind with to I I the and that integrated, these win and primes, the think working we're go that I So with leading can ones vertically fast, new aren't collaboratively

be merchant we'll supplier. Sometimes we'll prime, sometimes sometimes we'll a sub,

serve culture to to is well just being customer speed, for open-minded play having of I think innovation, the and that us. creativity going

know every letter again, do And a rescinded. There's don't I'm that says, some comes. executive out. They're -- out said. that I says So just I forget out, come day. letter hopeful this, orders change what other are a comes

Ken And hit it well.

to lot to Do them? contracting going this work We to not quarter these A modify Do have DEI? We'll for first officers. have The on pressure lumpiness, stuff. is read right? we every just be things of through the day. modify all contracts we

adjust we I the and key get follow move is guidance, we the mean the law, we we forward.

record back we as So again, I here might have But go months think couple and bumpy it things of backlog. a forth. be

existing contracts. have We

And an us We more a commitments 'XX. be for efficient have a our makes ecosystem. even path change hopefully, to there'll that as

Operator

Herbert from question last Ken at comes The RBC.

Kenneth Herbert

maybe exposure international you accelerate on at opportunity, does at your you Ken, a you that us look or of portfolio finer you 'XX? or Chris within international much indirectly, into just directly sort level do as Ukraine, the set to see you to then 'XX? put where point how And And for see maybe the can in that? how growing on

Christopher Kubasik

one, of the take I'll we'll it first keep kind short. and Yes,

talk about FMS, we're talking about dollars, which of DCS talking we're is as really different such. than I When assistance, or of tens Ukraine, see millions it. U.S. government think we I

of and product. have execute Termination of millions the backlog already. or the costs in continue form deliver. that or will and loans delivering probably of in tens cost we equal believe that So aids it's whether We the whatever,

the forward, range I have it's aid one historically what it's in that either manageable, going come through for that call dollar see then in And to alone But policies country, and government assistance. or U.S. has what broadly would we which are.

wrap of our growth percent a that small and Ken, business. to And on relative international want to end. international, to rate that It's coming take up? you it is we'll I do think the an

Kenneth Bedingfield

to Yes. But the From Chris. business the we grow certainly international appreciate see question. do growth of we domestic. growing. faster the And I Ken, international I than see yes, perspective, areas Thanks, both opportunity an think

the a as we're Chris of opportunities domestic at of a our Could north trying those think But So to grow revenue that well. international. can. from obviously, highlighted, XX% that's little grow the or revenues I X, working is it hard team work percent

Asia demand in Latin So they on allies, both I question support and 'XX it's America. markets, whether our international in South all think contribute, certainly saw across significant And ally to Ukraine and we Ukraine. even NATO seeing opportunities to Pacific, your our We're 'XX.

to be beyond There some aid it allies have Chris capability that and other that U.S. opportunities may the I acquire well. as to their provide countries will programs referenced, think, some

growing opportunity set. So

the of revenue. I grow we're can little a think But international percentage X percent faster. a or could growing grow total in bit both of It aspects business.

turn have. back good So problem to it's Chris. to a it I'll

Christopher Kubasik

employees leadership Yes, accomplished. on my what proud say why we and don't we incredibly of all to XXXX, for I I wrap up? have the I'm team reflect this As

thank employees year. focus on the and execution XX,XXX to want throughout I the performance with So a

work change. at a you accustomed to you LXHarris, last X years, we've had regular The If get on change basis.

forward. adapt us though it to we that's what I going to help don't coming change So the know is think even

I So remain the said earlier, priorities as our strategic same.

dedicated talented workforce. and a have We

framework create continue of think is grow going grow all we're value to achievable. is profitably. to XXXX stakeholders. here The and focus long-term I our to for our And

ahead, day. great and a in you you in the Have joining call. for this So months again We'll April. do the thank all we'll Thanks. see

Operator

and you your that disconnect thank and participating, ask We this concludes please call your we today. Ladies you conference for for lines. gentlemen,

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