on segment investments. Communication and spectrum dominance delivered revenue of $1.9 billion up 4% year over year, driven by increased international volume and higher electronic warfare and data links revenue. Communication and spectrum dominance operating margin was 26.9 percent, up 230 basis points, driven by stronger international revenue, partially offset by increased investments in research and development. Missile Solutions delivered 14 percent year-over-year revenue growth. Revenue increased 16 percent in the business we are retaining, partially offset by lower growth in the commercial space propulsion business we are divesting. Missile solution segment operating margin was substantially similar to the prior year. With that, let me turn the call back to Chris.

Thanks, Ken. We're at a critical time in history in terms of the geopolitical environment. The threats are rising in seriousness and sophistication, placing tremendous demand on the military and our allies overseas. This is why the budgets are increasing both in the U.S. and internationally. Now, let me focus on the future and how we see things playing out the rest of the year. You'll see us ramp up operations on AMD T3 and classified satellite awards. We will continue to drive more international orders for greater international revenue, continuing our positive momentum. We will continue to book orders internationally with our smart, software-defined radios as we upgrade capability and interoperability. We will build on our NGC2 orders that we received in Q1 and Q2 of this year and continue to bid and win in the second half. While it's early on NGC2, our products resonate, and we are winning more than our fair share. We will execute on our newly awarded $4 billion FAA contract, which could run through 2046 if options are exercised. We will lead a nationwide effort to rebuild and modernize the FAA's telecommunications infrastructure backbone, connecting every tower, radar facility, and air traffic control center across the United States, including modernizing more than 700 ground stations. We will work with our international partners to close Vampire counter-UAS system opportunities and have targeted $500 million of new orders, building on the momentum from our Q2 U.S. Army $100 million contract award. We will continue advancing the software capabilities of our smart software-defined radios, including our Raith Shield counter-U.S. jamming solution. Raith Shield is an emerging trusted disruptor success story. Our engineers understood what the warfighter needed and invested in software applications that can be loaded onto our smart radios, enabling them to sense, detect, and jam incoming drones in the last mile without adding new equipment or weight to the soldier. I recently saw a live demo, and I have to admit it was quite satisfying to see the drone fall out of the sky. This is proof that the capabilities of software-defined products are endless. This will contribute to our licensing revenue in the years ahead. We will continue to accelerate missile production while investing in affordable mass, including Red Wolf, a low-cost modular cruise missile that we are developing with the United States Marine Corps for precision strike missions. At the same time, we are well positioned in the emerging low-cost interceptor market with a proven propulsion and in-house seeker capabilities that can reduce the cost-per-kill equation. Shortly after quarter end, we signed a framework agreement for seven years of THAAD and PAC-3 production, representing approximately $12 billion of future production revenue and $2 billion of future profit. This clearly demonstrates the scale and durability of demand for our capabilities. We are working with Lockheed to quadruple THAAD production, delivering all solid rocket motors and divert and attitude control systems for this program. We're also making progress to nearly triple production on PAC-3 for solid rocket motors, attitude control motors, and lethality enhancers. As the only company producing these solid rocket motors at scale on Pact-3 today, and with the continued sole source positions on attitude control motors and lethality enhancers, we see the opportunity to deliver solid rocket motor quantities above the 80% framework agreement to cover any potential shortfall from competitors and to address international demand sooner. Our new modern automated factory facility is expected to come online in late 27, ensuring we have the capacity to meet the demand at the scale that no one else can. Let me touch on the budget, as I know it's a leading indicator of growth. It's probably reasonable to expect debate on the Department of War budgets. We are on a wartime footing, therefore, I would expect that we'll have the highest defense budget in our country's history and a supplemental budget to fund multi-year munition contracts. But let's be clear, while there's uncertainty, our nation's defense has always been bipartisan. Irrespective of where the budget ultimately ends up, our outlook is positive. We have strong and accelerating market-leading positions. We have been successfully penetrating new markets, developing franchise positions, and delivering on our commitments. Let me turn it back to Ken to discuss our outlook and guidance.

Based on our strong first-half performance and continued momentum, we are raising our full-year 2026 revenue and earnings per share guidance. Our 2026 guidance update also reflects the Department of War preferred stock investment, non-cash deemed dividend cost of $55 million, and the sale of a majority interest in our commercial space propulsion business that we expect to close in August. We now expect the full-year revenue of $23.2 to $23.7 billion, yielding organic revenue growth of 8% to 10%. This increases both the bottom end and the top end of our range by $200 million. The revenue guidance increase reflects stronger performance in our space and mission systems business and the excellent work our team did by winning AMDT3 Constellation, which is part of the Golden Dome for America. We are maintaining our segment operating margin guidance of low 16%. We are reducing net interest expense by $30 million to approximately $560 million, reflecting our higher cash balance. We are increasing both the low and high ends of our diluted earnings per share guidance by $0.40 to a range of $11.80 to $12. Notably, this increase comes even after absorbing an approximate $0.20 headwind associated with the divestiture of the commercial space propulsion business. The composition of the $0.40 earnings per share increase includes higher revenue volume, $0.15, lower interest expense, $0.15, net investment gains inclusive of non-cash preferred stock deemed dividend cost of $0.10. We are reaffirming our free cash flow guidance of $3 billion. At the segment level, space emission systems' full-year revenue increased $200 million to $11.7 billion. Communications and spectrum dominance, we expect revenue to ramp up in the second half due to strong demand for our smart, software-defined radios and Vampire Counter UAS system. Segment margin increased to mid-25% from approximately 25%. Missile Solutions, we adjusted full-year revenue and segment margin guidance to reflect the commercial space propulsion transaction closing in August, as the business will no longer be consolidated as part of L3Harris. Our commercial space propulsion business generated revenue of $571 million and segment profit of $82 million in 2025, and revenue of $312 million and segment profit of $57 million Q2 year-to-date 2026. With the divestiture proceeds, together with our current cash balance and forecasted free cash flow for the remainder of the year, we expect to have approximately $4 billion of cash on hand before any potential debt paydown or additional share repurchases. That financial flexibility positions us well to invest in the business, return capital to shareholders, and or further reduce leverage. Over the last five months, I've had a great opportunity to visit several of our operations, deepen my understanding of the business, and work closely with Chris and his team, which has only furthered my confidence in the business and our ability to deliver our 2026 guidance. With that, Jade, please open the line for Q&A.

We will now be conducting a question and answer session. At this time, please limit to one question per person. If you'd like to ask a question, please press star 1 on your telephone keypad, and a confirmation message will indicate your line is in the question queue. You may press star 1 if you'd like to remove your question from the queue. If you have an additional question, please press star 1 again to get back into the queue. For participants that are using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Thank you. Your first question comes from the line of Robert Stallard from Vertical Research. Please go ahead.

Thanks so much. Good evening. Good evening, Rob. Chris, my quick maths on the numbers you gave on the Missile Framework Agreement suggests you're going to make around a 17% margin on this work, assuming everything goes to plan. Is that the feeling you expect on this contract, or is there an opportunity to go higher than that?

Thanks for the question, Rob. That would be a pretty good return. You know, it's a seven-year number and probably a little bit of rounding. But, you know, we're thinking something in the 15%, 17%, 18% range is something to strive for, especially as we ramp up with volume and get the supply chain lined up with longer-term agreements. So you can always do more, but that's a pretty good start in my opinion.

Your next question comes from the line of Miles Walton from Wolf Research. Please go ahead.

Thanks. Chris, I think you talked about pushing the FTO to mid-2027. Can you just give us some of the puts and takes behind that decision? I noticed the retention agreements for a couple of senior management teams. And then why mid-2027 is the right time if fourth quarter or second half, 26 is not?

You know, I mean, Miles, the market conditions do not reflect the value we're building. I think we have a great business. You know, we have land. We have operating factories, backlogs, great financials, a great workforce, and we're actually making money. And I think, unfortunately, a lot of the recent IPOs are obviously missing some or all of those key elements to a business, and the market is adjusting to valuation. I think we're kind of caught in that process a little bit. So I want to let everything settle down. We'll reevaluate it. The team will keep building buildings, delivering SRMs, and, you know, I think the value gets greater each and every day. The majority of the cash that we were going to need from the IPO starts to hit, you know, in late 27, 28, and 29. So it just seemed like a prudent business decision, and it's always exciting to go public, but the team unanimously agrees. We've got to do what's right for our shareholders and all shareholders and stakeholders. And that's to stand down, focus on the business, and wait for the market to recover, which I have no doubt it will at the right time. A lot of headwinds out there, budget, CR, reconciliation, election, executive orders. You know, these things will get resolved, and I think the market will appreciate our valuation.

Your next question comes from the line of Sheila Cahiaglu from Jefferies. Please go ahead.

Good afternoon, guys, and thanks, Chris. Maybe just a follow-up on Miles' question and your comments just right there on missiles. You know, how do we think about growth for the missile segment from here as the frameworks are being pulled together and maybe some folks are a bit behind or a little ahead of you? How do you think about the frameworks materializing into revenues, just the ability to have incremental margins on that and the CapEx build out?

Yeah, let me ask Ken to run through the numbers. You obviously see the missile segment, but the actual missile piece is obviously greater than the segment results.

Wonderful, Sheila. So just kind of as we think about the business, we kind of expect growth in the high teens over the next couple years at a minimum, I would say kind of for the foreseeable future. So we're very excited about the business. I think the business will perform well. We have really significant demand stacking up. I think Chris talked about $20 billion of backlog we're negotiating. That triples our backlog. It will give us incredibly great visibility into the revenue generation. We're standing up a number of factories. I think it's about 60 in total. So as they come online and think about, you know, 28, well, 27, 28, 29 timeline, it'll accelerate revenue even faster. So I think we're in a really good position. Chris mentioned the propulsion business specifically, and that business will grow, you know, let's call it 20 percent plus, and it's actually been growing around there. That's just one of the pieces of the missiles business.

And, Sheila, I'll just chime in. And, you know, there's been a lot of questions about the billion-dollar investment, but, you know, I want to reemphasize that gave us the confidence to invest probably 12 to 18 months earlier than we would have. Had we waited for the framework agreements or something to go put a shovel in the ground, we'd be doing it today. We did this starting well over a year ago. We're opening the Gimler's Building next month, the brand-new Pac-3 building, You know, we just literally started building earlier this year when we got the demand signal, changed our strategy a little bit, and that will be open in late 2027. And as Ken said, many other buildings are going up real time, and it's quite exciting. So, you know, this ramp will probably take a couple years before you start to see the real significant spike in profitability and revenue. But in the interim, it's still growing 20%, which I think is hard to beat.

Your next question comes from the line of Christine Lewag from Morgan Stanley. Please go ahead.

Hey, good afternoon, everyone. Maybe switching topics, you know, it's been four years now since you've announced your strategic relationship with Shield Capital to engage with emerging dual-use technologies. Can you provide an update on how the partnership has evolved? Specifically, how much have you committed to the fund? How do you define a successful outcome? And ultimately, should we expect investment income as a recurring component of operating earnings going forward?

All right. Great question. I was hoping someone would ask me about SHIELD. It was a little over four years ago. I think first quarter of 22, we made a big announcement. We were the first movers into this concept, in my opinion. I think for those four years and maybe even earlier than that, we've always embraced and encouraged venture-backed tech companies to join the defense ecosystem, and they are all over, and we're proud to be part of helping them get started. So we had about three goals when we announced it, and probably most – they're maybe of equal importance, but maybe a little more important – was to pull through this new technology. These are all dual-use technologies, meaning commercial and defense, and we wanted to get these offerings into our products so our customers had newer, more innovative products, whether it was the use of metadata, AI, or some of the things we're doing in autonomy in space. It was also a way for us to accelerate R&D. Instead of us spending a few million bucks in a year or so to develop something, obviously these companies already had it. So it was easy to go ahead and team up with them in that regard. And then ultimately, you know, we'd like it to create shareholder value, not only through winning more business as a result of working with these companies and their technologies, but also through good old-fashioned investment gains. And these companies are starting to appreciate in value. And I'll let Ken talk a little bit about the numbers. But we're in two of their funds. We're the strategic partners. You know, they're kind of both about $50 million commitments. I don't think I've disclosed that before, but there you go. So like any VC fund, you know, you make contributions. Fund one is probably 70%, 80% drawn, and fund two is maybe 10% or 20%. But it's something we're quite proud of, and I'm glad it's working. And the most important thing is it helps with our culture of going fast. You know, we get a quick turn on some of these investments and decisions, and the team's excited to work 24 straight hours and make a yes-no decision. You don't have time to do your more traditional corporate months of reviews. You make decisions in hours or days, and they're great partners. I'm glad we connected, and I'm glad it's working out and looking forward to their fund three when they finish with fund two. Ken, you want to give a little more?

Yeah, sure, absolutely, Chris. And we are seeing some kind of great benefits of the relationship. We did have some gains this quarter. I would characterize them as below operating income gains, so they tend to impact or positively benefit the EPS. So we did call out the benefits in our EPS walk, so you can pick them up there.

A reminder, if you would like to ask an additional question, please press star one on your telephone keypad. Your next question comes from the line of Matthew Akers from BNB Parabas. Please go go ahead.

Hey, good afternoon. Yeah, thanks for the question. I wanted to ask about capital deployment. As you mentioned, you're going to have a fair amount of cash on the balance sheet at the end of the year. I think you mentioned share buybacks. You've done a fair amount of share buybacks year to date. Just your appetite to continue doing that given kind of some of the political pressure we've seen on it.

Sure. So let me just first say that our goal is to be very disciplined capital allocators. And clearly today, our first focus is investing in the business. We talked about $2 billion of commitments we've made to build out our missile capability and prime the supply chain, which I think the team is doing an amazing job. That'll drive significant revenue growth. Second, we think about debt. Well, I should just add to investing in the business. Certainly, if there's assets that made sense to tuck into our business, we would look at that. Right now, there's nothing in our process that we're looking at intensely to say it makes strategic sense. I mean, the valuations have to be right at the end of the day. I think that's really important. Second, I would categorize as debt pay down would also be a sensible place to go. I think we have about a billion eight coming due. Our total leverage is, I think, in pretty good shape. But at the end of the day, I mean, we're down to 2.3. We've almost reduced the turn from last quarter. And then share repurchases, I also think, are something really important to consider. And I probably should add to the share repurchase line. We're in 24 years of dividend growth, so making sure that we get the dividend aristocrat, I think, is important to us. So we'll continue to look at that. But certainly the $4 billion of excess cash gives us significant flexibility. We're very comfortable making investments with, you know, our missile capacity and capability and the business holistically.

Yeah, I think I'll just chime in a little bit here. You know, I talked about the venture capital, so that's another source of cash. We kind of throw CapEx out there as a general category, but it's a lot of detail in there. We've been modernizing our IT systems over the past few years, and there's more we're going to do there. But in parallel, we're also transforming the company and really focusing on a digitization ecosystem, which is a little different than just modernizing the infrastructure and staying current. So we have some exciting products that we're using there and developing, working with some world-class companies. This includes embedding AI, and it's a pretty, pretty exciting opportunity. And then, you know, the more traditional, I think we have more than enough land, but as Ken said, we're building 60 buildings for missiles alone. We built a couple for space a few years back. Those are operational and contributed to the winds. And then, of course, we need a lot of equipment, and we're using more and more modernized equipment as we grow the business. So it's great to have that extra cash. It's kind of a point in time, so we'll obviously do what makes sense. And as I said earlier, the CapEx ramp picks up a little bit more, as you would expect as we're starting to get through these buildings. So it's my understanding that that was the last question of the evening. So let me wrap it up here. I'll start by thanking Tony for his time in investor relations with his business acumen and multiple engineering degrees. He's going to be promoted to run one of our sectors. I have no doubt he'll do a great job, and I wish him the best in his new role. You're welcome. We'll miss you. I also want to recognize and thank our employees for their commitment and execution throughout the first half of the year. Their efforts have supported the warfighter while reinforcing the critical role we are playing in enabling our customers' most important missions. I also want to thank the Department of War leadership for transforming the department and changing the way capabilities are acquired. We are fully aligned and supportive of your efforts to get the entire ecosystem on a wartime footing. So thank you all for joining us today, and we look forward to talking to you in the months ahead. Have a good evening. Thanks.

This concludes today's call. Thank you all for attending. You may now disconnect.