L3harris Technologies, Inc. (LHX) September 2026 Conference Transcript

Hi, good afternoon, everyone. I'm Christine Lewag, Morgan Stanley's Head of Aerospace and Defense at Gritty Research. I'm very excited to host our next panel with Ken Sharp, CFO of L3Harris. Ken, welcome.

Thank you, Christine. And I'm the L3Harris CFO, so great to be here today. Look forward to the dialogue.

Hope you like Laguna enough to come back next year.

Yeah, it's terrible, terrible duty here.

So for important disclosures, please see the Morgan Stanley Research Disclosure website at www.morgansanley.com forward slash research disclosures. If you have any questions, please reach out to your Morgan Stanley representative. So with that, we'll dive into some Q&A. Ken, with the recent CEO change, how is the transition progressing under SAM? and are there any meaningful changes in company approach and operations or priorities?

So, one, I think we have a great portfolio. Chris did a really nice job of, I think, when you look at it, right, bringing L3 and Harris together, then two strategic acquisitions, and then about 13 divestitures, and we did all that in kind of four or five years. It's been a lot, right? Sam would say, hey, Ken, we've got a great business, So I'm really about execution. We need to go drive what we have. We've got to the portfolio we want to have. We're very well positioned in areas like space, sensing, the whole ISR side, you know, the communication side, certainly with our tactical radios, and then missiles. So we've got a great hand. Let's go execute. So I think that's what you're going to hear from Sam, you know, when he comes out in the next one of these, I'm sure.

And so what's it like working with Sam?

Yeah, I think it's great. I mean, we're kidding around. I think he may go to bed a little earlier than me, but he gets up a little earlier than me as well. So I'll have to get my cadence right with him. But he's very passionate about operations. You know, it used to be when I would call him as the CFO, I think your whole goal is you call somebody when you think there's a problem. And, you know, you hope they are in some level of detail and they're thoughtful. I joke around with Sam because, you know, I asked the question, and then I really just went two levels deep at most, and he's like at level six, and I'm like, okay, Sam, we're all good. That was pre-CEO, so now CEO. And by the way, it's great that he was in that level of detail, so I enjoy that because it made my job as the CFO a lot easier. I think he's still there as far as being very operational, getting into the business, understanding what drives performance. So I think you'll see a little bit more of a bend going more operational. So for those of you that have been CFOs, I'd argue that makes your life a little bit easier. And, you know, a lot more just kind of focused around making boring quarters and, you know, a little bit more boring operations as far as, you know, we just kind of hit our numbers and go on, report the next quarter and the next quarter. So, you know, kind of beating and delivering and whatnot. So I think that's what you'll hear from Sam. He's definitely very in tune with the portfolio. I think you know he had about 80% of the business before the latest role, so he's really getting up to speed on the missiles. I think that's a pretty short putt for him because he knows a lot as well, and he knows a lot of the customers, so I think it makes it pretty easy.

You know, I think he enjoyed being here at Laguna last year, so next year we hope to have both of you.

Well, he's really looking forward to it, and he's a little bit disappointed he couldn't make it, but he's got a lot going on with customers and really just getting into the business and the details and making sure we're driving it the right way. So you made sense for me to come out. So next time you'll absolutely have Sam. You'll have both of us together, and I think we'll have a lot of fun. So we'll probably go to bed a little earlier than you, is my guest.

Well, you know, we'll have drinks at the Laguna Bar later. But with that, Ken, you mentioned the portfolio a few times and the reshaping that's already occurred the past few years. But as you and Sam evaluate the portfolio today, how do you think of where it should be? Are you exposed and aligned to the priorities that the U.S. government wants to go? And also, are there still some businesses where you're looking at it and it may fit better elsewhere?

Sure. I mean, I think in general, the portfolio is well aligned. You know, so we look at our business, the sectors we have. There's some pieces that maybe they're not growing as fast. You kind of look at those. Maybe we'll look at them a little more carefully going forward. So that could, I guess, potentially be something. But I don't think so. At the end of the day, I think it's really about driving the business we have, and I think we're in a good place.

Yeah, that's wonderful. Look, as you look at the next few years, how do we think about the relative growth contribution from the U.S. tactical radios versus international? You know, this was a significant opportunity set highlighted And even when L3 Harris wasn't even one company, when it was, you know, portion from the Harris part of the business, there was a lot of excitement there. So can you level set us on domestic demand, international demand? Where are the risks and opportunities from here?

Yeah, and this is the part where I'm really excited about, Sam, because I think most people know, if you read my bio, I was a Marine and I was enlisted kid. So, you know, at the end of the day, the radios are near and dear to my heart, making sure that we're protecting the warfighter and we can get them home. I think that's, and we're very honored to have that position and have the position with a radio that has so much more capability. We talk about them being software-defined. I still have kind of figured out what that means, right? So for those of you, that's like your smartphone. You can load apps into it, waveforms and whatnot. That gives the radio infinite capability. It makes it so it's very, very, very difficult to jam, very, very difficult to actually disturb the communication pieces. So in a contested environment, I think you want to have an L3 Harris radio. So I think you'll hear Sam talk a lot about the business. I think maybe we need to talk more about the business, candidly. You saw last quarter we talked about Wraith Shield. I know I'll get to your question, I promise, but I think this is so important. It's so important for L3 Harris, but we talked a lot about Wraith Shield. That's a software application, goes on the phone, and it creates, and just like, sorry, I said phone, but the smart radio, it goes on the smart radio and it basically networks all the radios together in the battlefield and it'll literally sense detect a drone and then literally the warfighter can press a button and bring the drone down and jam it. So this is like a network that you'll see out in the battlefield. For me, it's really important for the warfighter. There's no incremental equipment. I think it's capability like that that our team's building. I think most people know this is a commercial business for us. We develop our product. We sell it into the customers. We don't sit back, wait for RFPs, and figure out, okay, let's meet that capability. We think we spend our own research and development. We drive the business. That's why the business has the performance it has and the margins, and it's all about bringing capability. So we go through refresh cycles just like your iPhone or whatever device you carry around. I think we're due for refreshes for what we call the radio Falcon. So Falcon 4 is the domestic version, and Falcon 3 is the international. So you'll see those models get refreshed shortly. And when they refresh them for us and for those of you that have seen the videos of what a warfighter looks like, the radios are pretty big, so we're very focused on form factor. The radios put off some heat. They have battery life, and, you know, we want to make sure they have capability and capacity for communication. And that's all the great work the team's doing. So then I think when you go back to the business, international has been a great driver this year. I think we've talked about international holistically across L3 Harris being up about 250 basis points over the last couple years. So we're getting a lot of demand in the process. And we did talk, I think, just recently about just some slowdown on kind of a fifth-tier supplier. So we'll see a little kind of bumps in the road around the supply chain. But it's a great business. We really expect to see good growth kind of as we exit the year and then the next year. So really a solid business. Budget-wise, because there's always been a discussion on budgets and, you know, NGC2, HMS, the Marine Corps budget. What we keep seeing in the demand signals are really strong. We got our first NGC2 order. I think we would argue it's our fair share, so we feel good about that. We also, the HMS budget lines are up, and then the Marine Corps side up pretty significantly. So we think we're well positioned in the business, and the capabilities, I think, position us even better. International, I mean, look, if you want the best radio, you want your kids to come home at the end of the day. That's why they get L3 Harris radios, and our goal is to keep expanding that market share, and that's where we're going to go.

And so, Ken, with your history as a Marine, can you give some context to how differentiated this software-defined radio capability is? Because when you look at electronics, compared to a phone, there's a commodity that's occurred with the proliferation of technology, but the radio lead that you have in terms of your capability is differentiated. Can you walk through what are those things that make you different? Why is it that the strength of the L3 Harris radio is enduring? And, you know, just give us context around those capabilities.

So we came out, and it's funny because we were up in Rochester the end of last week, and, you know, there was a radio that for, I guess, a couple months was really popular. And, you know, everybody gets into this new entrant disruptive and, you know, oh, it's going to take a lot of market share. And I think we set this demo up for the customer. And the engineers that are up there love this kind of stuff. So they literally bought some jamming stuff off of Amazon. They would say it was $30 a gear. They literally fired this radio up, pressed the button, and the radio went down. And then they sent that same jamming equipment on our radios. And this is the administration's change. People have great ideas, but at the end of the day, at the end of that radio, there's a warfighter that we want to get home. That's why they want the best capability, the best radio. And when you press that same button, our radios don't go down. There's a lot of sophistication. When we say software-defined, we probably have the only full suite of radios, all software-defined. And what it really means is if you need to change a waveform, we can just send the software out to the radio. It updates so you can change it as far as contested environments, jamming. Or you don't want your radio to turn on like a beacon so people can find the people in the field and pinpoint them. So between that and then I would just say I'm a big fan of the software productization with RayShield. That's early stages for us, but that's the first kind of real, what I would argue, real proof point to look at the capability that this radio will bring beyond just a communication device. So when you think about it, right, it's a radio, it's an antenna, battery pack, and at the end of the day, all you're doing is uploading software, and it's going to literally create a ring fence around the battlefield for the warfighter and radio frequency drones will be picked off and done really good things. I think it's really important at the end of the day.

This Wraith Shield software upgrade is pretty interesting. I think we talked about that last quarter, too, in the earnings call. So first, let's take a step back. This thing, in terms of additional cost, is this something that you invested your own dollars or is it part of an RFP? And then second, in terms of the actual capabilities, what is this Wraith Shield doing, you know, in terms of is it detection using the antennas, and how is it taking down a drone?

So, one, we used our own investment dollars, so we invest our profit in the business. We don't, it's not, it's like I said, it's a commercial business for us, so we have commercial end-item determination. So we bring capability if the customer wants it, they pay for it, and the margins are where the margins are. and that's no different than what a lot of the disruptive defense companies are talking about.

Well, you are the trusted disruptor.

Yeah, we would argue we are the trusted. And that's part of making the investments in the business, and that's part of the investments we've made elsewhere in the business to make sure that we are delivering what the customer, the warfighter, needs so we're out front. That's why we think that we can have top quartile revenue growth and top quartile margin. So specifically for WraithShield, so it's a software upload. There's nothing different to the radio. The antenna's the same. Everything's the same. Now, by the way, it's still in development. We're working with, it's funny. I have, and I say this, and I always hate saying it because I'm not trying to be commercial about it. And I was a Marine a long time ago. I'm kind of, I admit it, being a little bit overweight and a little bit bald. So I'm not really the kind of ideal person for race shield. But I have a young kid that comes over to my house, and he's an Army Ranger. He's in the Ranger Brigade, and he's the kind of kid that needs this. So I showed him the video and said, hey, what do you think about this? And he had lots of great words. And, you know, at the end of the day, I mean, it's like how do we get that capability? And the good news is we're working with SOCOM on it. I would argue with maybe fewer demonstrations and get it out there. So we didn't reply to an RFP. That's not our wiring. So I think it's really important that we kind of keep innovating and bringing it to the customer. And I think that's what the team's been doing. I'd like to believe that there's other products behind this that you would keep saying there'll be more and more software content that we're selling that's on our radios. But for me, it's about the capability. And I always think of real estate, right? A warfighter's got a uniform, they've got a radio, and they've got a weapon and some ammunition. It's how do you take that real estate and make it better? We own the real estate today and for a lot of this, so I think it makes sense. Now, by the way, our radios are in vehicles and all that other stuff. So when I talk about ring-fencing it, it's more than just the radio on the warfighter. It's what's on the vehicle. Our Vampire system, we're going to integrate these radios into them and then also integrate WraithShield in. So it's just a little bit more capability for Vampire having WraithShield there as well. But I'd still say early stages with it. We don't have our first sale. I think I was kidding with Chris a little bit around, you know, hey, quit putting it in my script. And I'm just like, but it's so game-changing for the warfighter. And he's like, okay, fine. And we did do a demonstration. Our board saw it. It was really neat seeing the drones drop out of the sky. So I think it's something that it's just a good product, what our team's been able to develop. So it's really all just radio frequency jamming to get back to your question.

I mean, it's pretty incredible to be able to add software into an existing radio and create a counter UAS system, right, that's local to the warfighter. So I'm looking forward to seeing this be integrated with Vampire and seeing the maturity of this platform.

Absolutely. And I think that's what's really exciting about it.

So pivoting to the CSD margins, can you talk about the sustainability of margins of that segment? And should the mid-20s level, is that a sustainable number in the medium term?

Yeah, I think we feel pretty good about the mid-20s. That's been our guide. The business has drifted up a little bit. I think we'd like to keep that guide just in general because we want to make sure we're making investments in the business. There's other parts of that market that we could probably invest and spend some more energy in. I mean, we have amazing technology with radios, and there's parts of that market that we're not really in in a big way. So I think that's where some of the opportunity space looks and sits. So we just need to make sure the team gets the R&D money, whether it's in, you know, radio expansion or software capabilities and so forth. We want to make sure we're putting the investment back so we stay on top.

Great. And now in the first half of the year, your ISR business was, I mean, pretty stellar, very strong. So when we think about the trajectory of that, can you talk about the variables that drive that growth? And do you see this strength continuing through the rest of the year? And how does that trend in the next few years?

Sure. So, I mean, one, the backlog, the awards, the pipeline for ISR is very good. And for those of you that maybe aren't as familiar with the portfolio in the ISR business is there's aircraft. So that's what we talk typically about ISR is the aircraft side. There's the space side, right? So think, you know, missile warning, missile tracking, a lot of classified content, but satellites up in space or stuff down on the ground doing things with space. I think that's important parts. Then we have a cyber component that's in there, which you'd argue that's also sensing. So all the theme around this is sensing. And then there's a maritime component in there as well. So I would say when you look at the portfolio, the maritime piece has probably been a little slower. Everybody says our stuff goes on to the ships near the end. So as a life cycle, you think about putting ships together so you would expect our maritime business to accelerate. On the space side, I mean, we've had just really positive success, right? So, you know, missile warning, missile tracking, Golden Dome, they've had kind of five tranches. It's hard to keep track because they keep renumbering them. It started with zero, and now we're on three. But I think we were the only prime that actually launched a satellite. and it actually worked. So that's a positive. And I think we're the only prime to win all five. So I think we feel really good about it. We've got an exquisite payload, provides a lot of capability. So I think the team's pretty excited there. Of course, last quarter we had an award, AMDT3. So that's the Tronch 5, that the 3 is Tronch 3. But anyway, someone else will figure it out. But I think that's good. There's other opportunities on the Golden Dome franchise. So Sam's certainly very energized about that. So we'll see what that looks like. There's different orbits. And I would actually, maybe I should back up, because people always ask me what excites me the most about L3 Harris. And then somehow we end up talking about missiles. And then I'm like, okay, but it's really, missiles is very exciting, of course. But I would argue what's really exciting is things, and by the way, everybody knows the missile story, so we don't need to talk a lot about it. But I would argue things like we built the satellite franchise really in the back of our P&L. We probably didn't do as well financially. We didn't tell investors that's what we were doing. Maybe we did. We didn't. And it was very hard to forecast and build this kind of prime position that I would argue is going to be a franchise position that we really put ourselves into. So we've done all this. We spent probably half a decade doing it. Now it's about how do you get the value for all the investments we've made. I mean, we've got high bays and factories and all this great stuff, and we've got 70 satellites, I think, that were in process of building that we need to get up and running up in space. And I think everybody realizes how space works. Depending on what orbit, the lives of these satellites are pretty short. So the minute you get them up, you're working on the next batch. And they tend to work in constellations. So, you know, you may have, you know, a need for, you know, build the print of another five or another four of the same thing or eight or whatever the numbers are. So I think we would expect to see a lot of that just based on the capability we bring, the positioning, the payload is differentiated. So it's hard to kind of compete with all three Harris in that space. So I think the mode's pretty deep. And so we look forward to kind of seeing that business do well. And then the aircraft side. That piece is, I'd argue, a little different, right, because, you know, we do, we basically buy an aircraft. We go in and rip it all apart, and it's usually a business jet-sized aircraft. It doesn't always have to be. I think people can find the news, and we can build some big stuff or redo some big stuff. In that, these aircraft get stripped down, and the amount of electronics that goes on this aircraft, it's amazing. And, you know, we cut holes in the frame. We have to get the airframes recertified. So it ends up being a little bit of our know-how and technology that we build into these. When they go up, you're getting the capability a lot faster, and it's a lot less expensive to buy and certainly a lot less expensive to operate. So I think that's why it's so exciting. Now you get some, a little bit of, you know, kind of bumpiness with it because we're buying aircraft, and we try to control the, not control is the wrong word, But maybe a little bit of own the supply chain a bit, because if somebody wants to go out and buy a G550 and deliver it to us and say to kind of go fix this and make it work for what we wanted, you don't know what condition it's in and all that other stuff. So it's a lot easier for us to take that risk from risk out of the equation, take it away from the customer. So we end up with kind of pretty decent margins for the business, but we end up with some lumpiness on the revenue side. And you can imagine if you're buying an aircraft, it's hard to get a 15% or 20% margin on top of the aircraft cost. So it really ends up kind of diluting the margin. But I think owning the supply chain with it and making sure we bring the customer the best value and taking the risk out on our side is pretty important. So that's what we've been doing. I think first half we had pretty elevated growth in there. We had some, I think we talked about in Q1, some material stuff flow through that drove a lot of revenue. But I still think that business is doing great. We raised a guide on it last quarter, and I think you'll see that business continue to perform.

Super helpful. And, you know, you touched on space, you know, as part of your commentary with ISR. You know, when you look at the execution risk that the space industry is facing, especially with some of the supply chain challenges, and you kind of talked through some of these things, What gives you the confidence that you can get the higher return on the space business, especially as the business skills?

Sure. So, I mean, one, and I think it just becomes, at the end of the day, the know-how just becomes reality would be my argument. But I will be very clear, we're booking margins far below what we're bidding at. Ken set this up, Benningfield, I think he did a really nice job with it. And I think the board also believes that's very appropriate is, you know, we kind of earned the right. So if you bid at 15 percent, we're booking at 10, and you earn the right to get to that 15 percent through execution. I think that's a thoughtful way of doing it. We're certainly not going to change that. And then a lot of these programs, they're kind of repeats to some degree. I don't want to call them Build the Prince because I think that does it an injustice a little bit, and I'm still waiting. I used to spend some time with one of our colleagues that was out there, Barry, on the satellite side at Orbital. And I always think that, you know, it's really hard until it's up and running and doing what it needs to do. So I'd rather give it some time. I think we're being very, so one, we've been bidding higher margins. And then two, I think we're booking at a lower booking rate in general than what we're bidding at. So I think it'll evolve over time. That's why I feel really good about the business, and we just need to go execute at the end of the day.

Now in Golden Dome, can you talk about L3Harris' progress on this, and how do you see the architecture of the program evolving, and what's your role for the program?

Yeah, so one, we're very happy to support the administration. We think it's a very important program. You know, at the end of the day, defending the homeland is an absolute honor to be part of that. So clearly the missile warning, missile tracking, we've done a phenomenal job on getting the awards. The team and the technology that we bring, I think, has demonstrated we have the capability. So I think that's really positive at the end of the day. The challenge with Golden Dome, and then, by the way, we also have a lot of other awards, maybe part of Golden Dome, maybe not, that are classified. So I think there's pieces there that are also good or potentially good. And then the architecture itself, I think, continues to be classified. So I think that, but you can imagine, right, if you're going to have a missile warning, missile tracking, and an ecosystem, you would fully expect there'd be some kind of way of disrupting an inbound missile or whatever. So I think we look at the rest of our portfolio and say, we have great capability with that, and we look forward to supporting the nation at the end of the day and our allies. And by the way, that's the piece I think people aren't always picking up as well. I think Golden Dome would ultimately be something broader that would be really important. It'd have a lot of longevity as this current administration is talking about having other countries support kind of the industrial base and support their own defense at the end of the day.

And Ken, you know, it sounds like you've got visibility for growth. You've got some bounds on margin and there should be upside. Free cash flow is pretty robust. So when we think about capital deployment priorities for this year and next year, how should investors think about your approach?

Yeah, so one, you know, Sam should answer this question with us, right? And I've quizzed Sam, so I think I'm okay to say what I'm going to say. But one, me personally, I love share buybacks. I know the administration's not a big fan, right, because they have a memo out in executive order that talks about dividends and buybacks. I would say, you know, I think that's an important tool that we all should be able to deploy, and I think it's about, I would argue the executive order was about making sure you're making investments in new factories and capabilities, and I think Al-3 Harris demonstrates that routinely, right? We've invested in the missile capacitization, $2 billion at the end of the day, ahead of contract, actually over $2 billion. That feels like a wartime footing. So when we talk about the first half of the year, we bought back $525 million of stock. I think if you look at our peers, we're well out in front. I think we want to be thoughtful at the end of the day. We want to make sure our shareholders are rewarded. They stick with us. I would also add to that, part of the administration's focus is having a strong industrial base. A lot of that is investments in the business, certainly. But a lot of that's having good quality investors standing behind the industry, which I think right now we're a little shorter on, candidly. I think all of our multiples have compressed. So I think we need the tools as a company to reward shareholders and keep people with us. So that's my bias. So I'll go back when we stack capital deployment, right? So today, investing in the business is number one. So I think that's really important. That's why we have products like Raid Shield. that didn't come by accident right that was pure investment we've been making investments in the missile capacitization um that's not by accident in fact we've been you know we get a lot of questions around dual sourcing and this and that and as Ken Benningfield would say we're going to win the race what that really means is we've made the investment so we can win the race and we've put kind of our money where our mouth is so to speak and I think that's what you'll see and I I think kind of holistically, I think we're in a really good position. And then when you go down the capital allocation route, you have, you know, certainly debt. We probably have a little bit more leverage than our peer group, maybe a turn. So I've got about $1.8 billion of debt coming due. So you can imagine maybe we pay down some of our debt. So I think that's fair. And then dividends, we've been a dividend grower for 24 years. I guess we're getting ready to hit that quarter century mark. So I think we'll keep looking at that. We like the smile on your face with that, so we want to keep putting, you know, we want to have that kind of dividend aristocrat model. I think that's important, so that'll be there. And I think when you look down, like, things like M&A right now, we would say we really like what we have, so why don't we run it? I think that's maybe less interesting today, you know, as far as any large-scale M&A. Sam would tell me, you know, we need to earn the right to go do large-scale M&A. What's really odd, right, and this is kind of my view coming in, is we did a great deal with Aerojet Rocketdyne, but there's a lot of consternation in the system around was it a good deal. And by the way, I think everybody would say it was a good deal. Maybe we didn't do a great job on explaining the thesis, and it took too many years for the thesis to unfold. Maybe we just weren't thoughtful with how we engaged with investors. So I think we're very mindful of that, and we don't want to kind of set ourselves down a path. To us right now, execution is probably the most important thing. So that's why we probably prioritize if you go down the stack. Share buybacks make a lot of sense. Plus, by the way, look, we're trading for a 13-time multiple. If you told me to go out and buy something for 40 times or 30 times earnings and then explain it's really whatever number, 20 times, I'm not really good at that. So I would rather us just buy back our stock at 13-time multiple. That would make some sense. So I think for the near future, that's kind of the way the capital allocation will work.

Thank you, Ken. Now, shifting gears, with Sam stepping up to the CEO role, does the leadership transition create an opportunity to revisit how the company is organized or how you're reported? Are you guys considering potentially re-segmenting the business?

Yeah, so that's a great question.

Are you going to move cheese around?

Yeah, I'm not really a cheese mover guy, and it's funny, so I'm not going to use my words. I went and talked to Sam because, you know, we spent the weekend kind of working through the announcements and all that other stuff. And then I think I spent the next day or the Monday with 18 investors going through kind of what Sam's planning on doing. And the reason I say that is because I kind of sat down with it. We went through a Q&A, and I said the worst thing that could happen is I start telling investors something on Monday, and you have a different view. so I was very appreciative of his time because I thought it was important to make sure we were interlocked on this so question one for me was reorganizing question two was actually do you have leaders for the segment so question one he looked at me and trust me I was a Marine so I was ready to take the hill he said, Ken, the last thing we need to do is reorganize the business so at that point I was kind of like Putty in Sam's hand a little bit, and I, you know, look, it's kind of hard to argue with a guy. We have a great portfolio. Let's go drive it. He was part of reorganizing it, so he's like, hey, we have what we need. Let's go drive the business. Last time we reorganized, right, I think this is part of where some of the investors are like, hey, what's this piece, that piece? We created a little bit of confusion. Sam's gotten that feedback, and he's like, yeah, I agree. We don't need to do that, And, you know, we re-segmented the business, we did the Dow investment, we did the IPO, we sold 60% of the commercial space propulsion, and then we did all of that in basically five months. So it's really hard on investors, and, you know, it takes a lot out of the team. So really about, and by the way, that means the team's not focused on driving performance in the business, and that's been my bend, right? I want the finance team all over the CapEx build-out, the R&D spend, because when I see R&D spend on RaceShield and we understand the product and what it's going to do, okay, great. But when you hear sometimes, and we've all seen this, where somebody talks about something and you're like, okay, well, what's the deliverable at the end? And it's not very sensible. That's where finance people, I think, can add good value. So having the time to make sure we're doing those things versus reorganizing, I think, is the way to go. So I'm very happy with Sam's answer. I just smiled and said, hey, it's a good idea, Sam. So it was certainly his idea, not mine, but I would have tried to give him my idea if I needed to.

But I didn't want to. That made me happy in my team, too.

We all don't need to be two models.

Looking for the keys is kind of hard, you know, following it around different segments. So I guess, you know, look, there's a big push from the administration for dual sourcing. So how do we think about this for L3? Do you see this more, L3 Harris, do you think this is more of a risk to your incumbent positions where you might be a sole source? Do you see this as an opportunity to potentially be a dual source provider for other products? What are the puts and takes for you?

Yeah, so one, we're really into competition because at the end of the day, it's all about the warfighter and it's all about bringing capability to them. So we don't say open up everything. Let's have added, you know, for me personally, I'd say open up missiles, the whole missile hierarchy and let folks like us compete on seekers and things like that, because we've got one ready to go tomorrow. And we think ours is more manufacturable. So for me, things like that are very exciting. If people want to come into solid fuel rocket motors, it's you know, I said I came out of a business that had solid fuel rocket motors. There's two of them, really, of scale in the U.S. It's a great business. It's a great market. It just surprises me. I hear so much talk about it because at the end of the day, it's kind of dangerous work, and it's pretty specialized, and you're usually in the middle of somewhere in West Virginia or Camden, Arkansas or Orange, Virginia or wherever or Utah, and you're doing this stuff in very spread-out facilities. and I just think there's a special expertise and skill. And then I keep hearing about, like, new entrants, bladeless mixers, and they're going to build an office building, and then my head hurts, and they're going to print motors and all this other stuff. And we have bladeless mixers, right? I mean, it's almost comical, but some of these missiles, motors that we make are so complicated, and they require you have to have bladed mixers, right? So it's like, you know, I think everybody's trying to feel their way through it, but they're feeling their way with energetics. And, you know, I think we're best positioned, and I think we'll outrun the competitors. So wherever it is, whether it's radios, if we think we make a superior product, if somebody has something better that's going to protect the warfighter, I say bring it. And it makes us better. We're happy for it. We just want the same opportunity. We want a level playing field, and we want to be able to actually bring more value to the warfighter.

Well, great. I think we have time for just one last question. So trusted disruptor, that was a key theme for L3 Harriers the past few years. Is that core to Sam's thesis and strategy for the company?

You know, it's interesting because when I came here, there were certain parts of Chris's team talking about the trusted disruptor and what it means, and then we did a whole investor perception study and asked investors what they thought trusted disruptor means, And I know what it means to me, right? So, and I would have argued my old employer was a little bit of a trusted disruptor. So I think that we need to do a better job as a company explaining what trusted disruptor is. And I do believe it's here to stay. I think it's more of a culture at the end of the day. It's how you make investments. You support the warfighter. The trusted piece is we have the manufacturing capability, the know-how, the capital behind us. so when we say we can do something, you can trust it, and the disruptor is we're willing to go figure out how to invest our capital. And, like, I used this with one of our folks who was saying, well, we're not really doing that. The Pentagon doesn't believe it or whatever. And I said, well, hold on here for a second. I've been at Primes. I see what Primes do. We made a $93 million investment in AMDT3. The whole award came down to who could move the fastest and deliver on schedule. So guess what? We spent $93 million. We were ahead on everybody's schedule, so of course we won. Right now, we took risk of doing that. By the way, the disruptors take risk. RaceShield is us making investments to build a better product. We could sit back and say, wait for an RFP. We don't. We actually built a better product. There's no RFP for RaceShield that exists, so we built a better product, and then we go and demo it and explain it to the customer why they need it. They love it, and they say, let's go. So I think those are two great examples. Missiles, we spent $2.2 billion ahead of contract to go put shovels in the ground, invest in the supply chain, get the hardware invested. These are all elements of disruptor. We don't wait. We actually move. It's all about capability for the warfighter. So I think it's alive and well. You'll get some great answers from Sam, but I'm real happy. I mean, that's why I came to the company. I say this to people, but then I realize they're kind of like a pig looking at a watch, looking at me, because they don't know what it means, but I do, and we're going to run really hard to support the warfighter and our customers.

Well, thank you very much, Ken. This concludes this session on L3Harris.

Thank you. Appreciate it.