Q3 2026 Textron Inc Earnings Call

October 29, 2026

Operator: Thank you for standing by, and welcome to the Textron Q3 2026 Earnings Release Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star one. Please note that today's call is being recorded and will be available for replay later today. I would now like to turn the call over to Scott Hegstrom, Vice President, Investor Relations. You may begin.

Speaker #1: After the speaker's remarks, there will be a question-and-answer session. If you'd like to ask a question during this time, simply press star, followed by the number 1 on your telephone keypad.

Speaker #1: If you would like to withdraw your question, again, press star 1. Please note that today's call is being recorded and will be available for replay later today.

Speaker #1: I'd now like to turn the call over to Scott Hegstrom, Vice President, Investor Relations. You may begin.

Scott Hegstrom: Thanks, Rob, and good morning, everyone. Before we begin, I would like to mention, we will be discussing future estimates and expectations during our call today. These forward-looking statements are subject to various risk factors, which are detailed in our SEC filings and also in today's press release. On the call today, we have Lisa Atherton, our Chief Executive Officer, and David Rosenberg, our Chief Financial Officer. Our earnings call presentation can be found in the investor relations section of our website. With that, I will turn the call over to Lisa.

Speaker #2: Thanks, Rob. Good morning, everyone. Before we begin, I'd like to mention that we will be discussing future estimates and expectations during our call today. These forward-looking statements are subject to various risk factors, which are detailed in our SEC filings and also in today's press release.

Speaker #2: On the call today, we have Lisa Atherton, our Chief Executive Officer, and David Rosenberg, our Chief Financial Officer. Our earnings call presentation can be found in the Investor Relations section of our website.

Speaker #2: With that, I'll turn the call over to Lisa.

Lisa Atherton: Thanks, Scott, and good morning, everyone. Textron delivered a strong quarter, with $3.8 billion of revenues and $1.76 in adjusted EPS, as well as $418 million of manufacturing cash flow before pension contributions. Higher jet deliveries at Textron Aviation and program execution at Textron Systems drove double-digit revenue growth at each of these segments. Throughout the quarter, Bell continued to make significant operational progress on the MV-75 program. We continue to advance our separation process for the Industrial segment and remain on track to hit our timeline. Given our performance year to date and our expectations for the balance of the year, we are increasing our outlook for both adjusted EPS and manufacturing cash flow. Now I will go into the segment details. During the quarter, Bell's primary focus was on operational continuity of the MV-75 program.

Speaker #3: Thanks, Scott. And good morning, everyone. Textron delivered a strong quarter with 3.8 billion of revenues and $1.76 in adjusted EPS, as well as 418 million of manufacturing cash flow before pension contributions.

Speaker #3: Higher jet deliveries at Textron Aviation and program execution at Textron Systems drove double-digit revenue gross at each of these segments. Throughout the quarter, Bell continued to make significant operational progress on the MV-75 program.

Speaker #3: We continue to advance our separation process for the industrial segment and remain on track to hit our timeline. Given our performance year-to-date and our expectations for the balance of the year, we are increasing our outlook for both adjusted EPS and manufacturing cash flow.

Speaker #3: Now I'll go into the segment details. During the quarter, Bell's primary focus was on operational continuity of the MV-75 program. The U.S. Army successfully received congressional approval for its ATR request related to the MV-75 Cheyenne program, mitigating the risk discussed on our last earnings call related to the government fiscal year 2026 funding.

Lisa Atherton: The U.S. Army successfully received congressional approval for its ATR request related to the MV-75 Cheyenne program, mitigating the risks discussed on our last earnings call related to the government fiscal year 2026 funding. From an operational perspective, the program has made significant progress on the aircraft build. Recent milestones for Bell and Team Cheyenne have included the completion of three wings in Amarillo, receipt of the first nacelles and completing the first wing and nacelle assembly process, completing the first fuselage at our Wichita assembly center, which is expected to be mated with the wing assembly in Q4, and advancing several critical components into test, such as the first gearboxes. These gearboxes are part of the overall drive system, which was assembled in Bell's new MV-75 Drive System Test Lab in Grand Prairie, Texas.

Speaker #3: From an operational perspective, the program has made significant progress on the aircraft build. Recent milestones for Bell and Team Cheyenne have included the completion of three wings in Amarillo, receipt of the first nacelles, and completing the first wing and nacelle assembly process, completing the first fuselage at our Wichita assembly center, which is expected to be mated with the wing assembly and the fourth quarter, and advancing several critical components into test such as the first gearboxes.

Speaker #3: These gearboxes are part of the overall drive system, which was assembled in Bell's new MV-75 Drive System Test Lab in Grand Prairie, Texas. We are very excited about the progress made on the program, as the MV-75 remains a top priority for the U.S.

Lisa Atherton: We are very excited about the progress made on the program, as the MV-75 remains a top priority for the U.S. military. Modern warfare is increasing the speed, complexity, and lethality of the battlefield, making the ability to maneuver more important than ever. The MV-75 will fundamentally transform how the Army moves and projects combat power in that environment. In other areas of Bell's military business, Bell was awarded a contract for structural and power upgrades to the H-1 fleet under the SPINE program, an important modernization program, as H-1s are essential to maintaining attack, strike, and utility capabilities within the Marine Corps. Operationally, Bell continues to focus on initiatives to strengthen the supply chain and improve production efficiency and output, including our ongoing certification of new suppliers and dual-sourcing of critical raw materials needed to support gearboxes and rotor blades.

Speaker #3: military. Modern warfare is increasing the speed, complexity, and lethality of the battlefield, making the ability to maneuver more important than ever. The MV-75 will fundamentally transform how the Army moves and projects combat power in that environment.

Speaker #3: In other areas of Bell's military business, Bell was awarded a contract for structural and power upgrades to the H-1 fleet under the SPINE program, an important modernization program as H-1s are essential to maintaining attack, strike, and utility capabilities within the Marine Corps.

Speaker #3: Operationally, Bell continues to focus on initiatives to strengthen the supply chain and improve production efficiency and output, including our ongoing certification of new suppliers and dual-sourcing of critical raw materials needed to support gearboxes and rotor blades.

Lisa Atherton: This includes castings, rotor blade extrusions, and various types of aerospace steel alloys. Selective capacity for our problematic assemblies to relieve suppliers and provide on-time delivery has also progressed. These are things like chemical processing, paint operations, and complex assemblies. We continue our focus on automation throughout the product lines. At Aviation, we welcomed Bryan Rohloff as President and CEO of the business. Bryan is a proven leader with over 29 years of experience at Textron Aviation, who brings a deep understanding of our products, our customers, and our industry. Bryan has held numerous positions at the company, spanning customer support, sales, supply chain, and quality throughout his career. Most recently, he led our customer support organization. Moving over to the business, Textron Aviation revenues were up $201 million or 14% compared to last year's Q3, reflecting higher revenue for both aircraft and aftermarket.

Speaker #3: This includes castings, rotor blade extrusions, and various types of aerospace steel alloys. Selective capacity for our problematic assemblies to relieve suppliers and provide on-time delivery has also progressed.

Speaker #3: These are things that chemical processing, paint operations, and complex assemblies. And we continue our focus on automation throughout the product lines. At aviation, we welcomed Brian Roelof as President and CEO of the business.

Speaker #3: Brian is a proven leader with over 29 years of experience at Textron Aviation, who brings a deep understanding of our products, our customers, and our industry.

Speaker #3: Brian has held numerous positions at the company spanning customer support, sales, supply chain, and quality throughout his career, most recently he led our customer support organization.

Speaker #3: Moving over to the business, Textron Aviation revenues were up $201 million, or 14%, compared to last year's third quarter, reflecting higher revenue for both aircraft and aftermarket.

Lisa Atherton: We delivered 51 jets and 32 commercial turboprops in the quarter, compared to 42 jets and 39 commercial turboprops in last year's Q3. Textron Aviation's fleet utilization remains strong, contributing to aftermarket revenue growth of 10% compared to last year's Q3. Demand across both jets and turboprops continued to be strong, with Aviation experiencing its highest Q3 orders since 2023. On the operational front at Aviation, our focus remains on improving productivity and converting strong customer demand into profitable growth. Moving forward, our priorities are clear as we make investments to drive productivity and profitability. Those investments in fabrication are focused on increasing capacity to improve parts availability on our production lines. This includes adding capacity in areas like machining, sheet metal, and landing gear. Within the assembly, our investments are focused on increasing automation and manufacturing technologies.

Speaker #3: We delivered 51 jets and 32 commercial turboprops in the quarter compared to 42 jets and 39 commercial turboprops in last year's third quarter. Textron Aviation's fleet utilization remained strong, contributing to aftermarket revenue growth of 10% compared to last year's third quarter.

Speaker #3: Demand across both jets and turboprops continued to be strong, with aviation experiencing its highest Q3 orders since 2023. On the operational front at aviation, our focus remains on improving productivity and converting strong customer demand into profitable growth.

Speaker #3: Moving forward, our priorities are clear as we make investments to drive productivity and profitability. Those investments in fabrication are focused on increasing capacity to improve parts availability on our production lines.

Speaker #3: This includes adding capacity in areas like machining, sheet metal, and landing gear. Within the assembly, our investments are focused on increasing automation and manufacturing technologies.

Lisa Atherton: This includes expanding our wing cell automation for some of our light jets. Our tooling investment will drive workflow productivity and support new programs such as the Gen3s and our existing platforms such as the King Air. A key project here relates to a significant market opportunity we have on the King Air. We are surging the digitization efforts of this platform, which will enable us to modernize the tooling and processes to build the aircraft more efficiently. We have significantly accelerated this phase of the effort, positioning us to begin capturing incremental benefits sooner. Like Bell, we are dual-sourcing and insourcing challenging suppliers to improve quality, increase throughput, and offset inflation. An example here is dual-sourcing spars, which have been a gating item in our production.

Speaker #3: This includes expanding our wing cell automation for some of our light jets. Our tooling investment will drive workflow productivity and support new programs such as the Gen 3s and our existing platforms such as the King Air.

Speaker #3: A key project here relates to a significant market opportunity we have on the King Air. We are surging the digitization efforts of this platform, which will enable us to modernize the tooling and processes to build the aircraft more efficiently.

Speaker #3: We have significantly accelerated this phase of the effort, positioning us to begin capturing incremental benefits sooner. And like Bell, we are dual-sourcing and insourcing challenging suppliers to improve quality, increase throughput, and offset inflation.

Speaker #3: An example here is dual-sourcing SPARS, which have been a gaining item in our production. In terms of product development efforts at Aviation, we continue to make progress on the Denali, with over 4,200 test flight hours to date.

Lisa Atherton: In terms of product development efforts at Aviation, we continue to make progress on the Denali with over 4,200 flight test hours to date. Our three Gen3 light jet programs are also advancing towards certification, with more than a combined 1,200 flight test hours and the rollout of the first production CJ4 Gen3 as the aircraft advances toward entry into service. Each aircraft features Garmin Emergency Autoland, while the CJ4 Gen3 also includes a significant avionics upgrade to the Garmin G3000 PRIME. We continue to see significant demand for the SkyCourier program across freight, passenger, combi, and special mission applications and have now introduced the SkyCourier UX concept aircraft, combining the proven SkyCourier platform with Merlin's aircraft-agnostic software solution for autonomous aviation.

Speaker #3: Our three Gen 3 light jet programs are also advancing toward certification, with more than a combined 1,200 flight test hours and the rollout of the first production CJ4 Gen 3 as the aircraft advances toward entry into service.

Speaker #3: Each aircraft features Garmin Emergency Autoland, while the CJ4 Gen 3 also includes a significant avionics upgrade to the Garmin G3000 Prime. We continue to see significant demand for the SkyCourier program across freight, passenger, combi, and special mission applications, and have now introduced the SkyCourier UX concept aircraft, combining the proven SkyCourier platform with Merlin's aircraft-agnostic software solution for autonomous aviation.

Lisa Atherton: During the quarter, we celebrated two significant Citation milestones, the rollout of the 500th Citation Latitude, the world's best-selling midsize business jet, and the 500th delivery of the Citation CJ4 series as we prepare for the next chapter of that platform with the upcoming CJ4 Gen3. Moving over to Systems, the segment continued its outstanding performance for the year with revenue growth of 16% in the quarter, driven by execution across its programs. In the quarter, we received a $230 million contract modification for two additional Ship-to-Shore Connector craft. Ship-to-Shore has now reached its full rate production level of 4 craft per year with significant runway ahead as we have delivered 18 units out of a 73-unit program of record. ATAC also continues to execute well, driven by new contract wins and strong performance in its fleet exercise and adversary air operations.

Speaker #3: During the quarter, we celebrated two significant citation milestones: the rollout of the 500th citation latitude the world's best-selling midsize business jet, and the 500th delivery of the citation CJ4 series, as we prepare for the next chapter of that platform with the upcoming CJ4 Gen 3.

Speaker #3: Moving over to Systems, the segment continued its outstanding performance for the year, with revenue growth of 16% in the quarter, driven by execution across its programs.

Speaker #3: In the quarter, we received a 230 million dollar contract modification for two additional ship-to-shore connector craft. Ship-to-shore has now reached its full-rate production level of four craft per year, with significant runway ahead as we have delivered 18 units out of a 73-unit program of record.

Speaker #3: ATAC also continues to execute well driven by new contract wins and strong performance in its fleet exercise and adversary air operations. Our land business has several platforms contributing to the segment.

Lisa Atherton: Our land business has several platforms contributing to the segment. The FMS program, or the MSFV, is ramping with planned deliveries of 65 units to Ukraine over the next 3 years. The Marine Corps' ARV program is scaling pre-production development efforts as we prepare for delivery of 16 units in 2028. The Army's XM30, where we are partnered with American Rheinmetall, is in the process of delivering 10 prototypes to the U.S. Army. At Industrial, our focus remains on supporting our customers, employees, and business partners while we continue to work toward a successful separation of the segment. During the quarter, TSV introduced its third generation of Samsung's battery technology, demonstrating the continued advancement of the E-Z-GO franchise. Kautex has advanced its new technologies throughout the year.

Speaker #3: The FMS program, or the MSFB, is ramping with planned deliveries of 65 units to Ukraine over the next three years. The Marine Corps' ARV program is scaling pre-production development efforts as we prepare for delivery of 16 units in 2028.

Speaker #3: And the Army's XM30, where we are partnered with American Rheinmetall, is in the process of delivering 10 prototypes to the U.S. Army. At Industrial, our focus remains on supporting our customers, employees, and business partners while we continue to work toward a successful separation of the segment.

Speaker #3: During the quarter, TSV introduced its third generation of Samsung's battery technology, demonstrating the continued advancement of the EasyGo franchise. Caltex has advanced its new technologies throughout the year.

Lisa Atherton: It is currently operating a Pentatonic line in its Windsor, Canada facility while preparing to open new lines in Detroit and the Czech Republic to support new business. It is also ramping production on its Allegro offering to support the rollout of a robotaxi operator. Overall, across Textron, I am incredibly encouraged by the progress we are making. The underlying demand environment remains favorable, our execution initiatives are beginning to gain traction, and we continue to advance strategic programs and technologies that we believe will create long-term value for our shareholders. With that, I'll turn the call over to David.

Speaker #3: It is currently operating a pentatonic line in its Windsor Canada facility, while preparing to open new lines in Detroit and the Czech Republic to support new business.

Speaker #3: It is also ramping production on its Allegro offering to support the rollout of a Robotaxi operator. Overall, across Textron, I'm incredibly encouraged by the progress we are making.

Speaker #3: The underlying demand environment remains favorable. Our execution initiatives are beginning to gain traction, and we continue to advance strategic programs and technologies that we believe will create long-term value for our shareholders.

Speaker #3: And with that, I'll turn the call over to David.

David Rosenberg: Thank you, Lisa, and good morning, everyone. Turning to slide 11 of the earnings presentation, revenues in the quarter of $3.8 billion were up 4%, or $149 million from last year's Q3. Segment profit in the quarter was $355 million, compared to $360 million in the Q3 of 2025. During this year's Q3, adjusted EPS was $1.76 per share, compared to $1.55 per share in last year's Q3. Manufacturing cash flow before pension contributions totaled $418 million, up from $281 million in last year's Q3. During the quarter, we repurchased approximately 2.9 million shares, returning $239 million in cash to shareholders. Now let's review how each of the segments contributed, starting with Textron Aviation.

Speaker #1: Thank you, Lisa. And good morning, everyone. Turning to slide 11 of the earnings presentation, revenues in the quarter of $3.8 billion were up 4%, or $149 million from last year's third quarter.

Speaker #1: Segment profit in the quarter was 355 million, compared to 360 million in the third quarter of 2025. During this year's third quarter, adjusted EPS was $1.76 per share, compared to $1.55 per share in last year's third quarter.

Speaker #1: Manufacturing cash flow before pension contributions totaled $418 million, up from $281 million in last year's third quarter. During the quarter, we repurchased approximately 2.9 million shares, returning $239 million in cash to shareholders.

Speaker #1: Now let's review how each of the segments contributed, starting with Textron Aviation. On slide 12, revenues. Aviation of 1.7 billion, we're up 14%, or 201 million from last year's third quarter, reflecting higher aircraft revenues of 152 million and higher aftermarket parts and services revenues of 49 million.

David Rosenberg: On slide 12, revenues at Aviation of $1.7 billion were up 14%, or $201 million from last year's Q3, reflecting higher aircraft revenues of $152 million and higher aftermarket parts and services revenues of $49 million. The increase in aircraft revenues was primarily due to higher volume and mix, largely reflecting higher Citation jet volume, partially offset by lower commercial turboprop volume. The increase in aftermarket revenues was due to higher volume and pricing. Segment profit was $179 million in the Q3, up $7 million from a year ago, primarily due to higher aircraft and aftermarket volume and mix, partially offset by an unfavorable impact from manufacturing inefficiencies. Backlog at the end of the Q2 was $8 billion. Looking at Bell, revenues of $933 million were down 9%, or $93 million from the Q3 of 2025.

Speaker #1: The increase in aircraft revenues was primarily due to higher volume and mix, largely reflecting higher citation jet volume, partially offset by lower commercial turboprop volume.

Speaker #1: The increase in aftermarket revenues was due to higher volume and pricing. Segment profit was 179 million in the third quarter, up 7 million from a year ago.

Speaker #1: Primarily due to higher aircraft and aftermarket volume and mix, partially offset by an unfavorable impact from manufacturing inefficiencies. Backlog at the end of the second quarter was 8 million.

Speaker #1: Looking at Bell, revenues of 933 million were down 9%, or 93 million from the third quarter of 2025. The revenue decrease in the quarter was primarily driven by lower military revenues of 59 million, largely due to lower volume on the MV-75 program.

David Rosenberg: The revenue decrease in the quarter was primarily driven by lower military revenues of $59 million, largely due to lower volume on the MV-75 program. Commercial helicopters' parts and services revenues decreased $34 million compared to the Q3 of 2025, largely due to lower volume and mix. Segment profit of $76 million was down $16 million from last year's Q3, primarily due to lower volume and mix. As Lisa mentioned, in the quarter, Congress approved the $350 million ATR request related to FY26 funding for the MV-75 program. Subsequently, approximately $300 million was obligated to the program pursuant to contract modifications during the quarter. Throughout the Q3, we maintained reduced spending levels to mitigate any funding challenges while continuing to advance the program.

Speaker #1: Commercial helicopters' parts and services revenues decreased 34 million compared to the third quarter of 2025, largely due to lower volume and mix. Segment profit of 76 million was down 16 million from last year's third quarter, primarily due to lower

Speaker #4: Lower volume and mix. As Lisa mentioned, in the quarter, Congress approved the $350 million ATR request related to FY26 funding for the MV-75 program.

Speaker #4: Subsequently, approximately $300 million was obligated to the program pursuant to contract modifications during the quarter. Throughout the third quarter, we maintained reduced spending levels to mitigate any funding challenges while continuing to advance the program.

David Rosenberg: As a result of the ATR approval, modifications and contract changes received, and reduced program spending levels, there was no related cum catch-up adjustments during Q3. Backlog in the segment ended the quarter at $7.6 billion. At Textron Systems, revenues of $360 million were up 16%, or $50 million from Q3 2025, largely due to higher volume on armored land vehicles and military training and support services provided by ATAC. Segment profit of $57 million was up $10 million compared with Q3 2025 primarily due to higher volume, partially offset by higher selling and administrative expense, reflecting a net $10 million decrease in a gain associated with the early termination of a vendor contract in Q3 2025. Backlog in the segment ended the quarter at $3.5 billion.

Speaker #4: As a result of the ATR approval modifications and contract changes received, and reduced program spending levels, there were no related cumulative catch-up adjustments during the third quarter.

Speaker #4: Backlog in the segment ended the quarter at $7.6 billion. At Textron Systems, revenues of $360 million were up 16%, or $50 million, from the third quarter of 2025, largely due to higher volume on armored land vehicles and military training and support services provided by ATAK.

Speaker #4: Segment profit of $57 million was up $10 million compared with the 3rd quarter of 2025, primarily due to higher volume, partially offset by higher selling and administrative expense.

Speaker #4: Reflecting a net $10 million decrease in a gain associated with the early termination of a vendor contract in the 3rd quarter of 2025. Backlog in the segment ended the quarter at $3.5 billion.

David Rosenberg: Looking at Industrial, revenues of $765 million were up 1% or $4 million from last year's Q3. Textron Specialized Vehicles revenues increased $26 million or 9%, reflecting higher volume and mix and a favorable impact from pricing. Kautex's revenues decreased $22 million or 5%, largely reflecting lower volume and mix, partially offset by higher pricing. Segment profit of $38 million was up $7 million from Q3 2025. Finance segment revenues were $13 million, and segment profit was $5 million in Q3 2026 as compared to revenues of $26 million and segment profit of $18 million in Q3 2025. The decrease in revenues and segment profit primarily reflects $11 million of gains recognized in Q3 2025 from the disposition of non-captive assets.

Speaker #4: Looking at industrial, revenues of $765 million were up 1% or $4 million from last year's 3rd quarter. Textron Specialized Vehicles revenues increased $26 million or 9%.

Speaker #4: Reflecting higher volume and mix and a favorable impact from pricing. Caltex's revenues decreased $22 million or 5%, largely reflecting lower volume and mix, partially offset by higher pricing.

Speaker #4: Segment profit of $38 million was up $7 million from the 3rd quarter of 2025. Finance segment revenues were $13 million and segment profit was $5 million in the 3rd quarter of 2026 as compared to revenues of $26 million and segment profit of $18 million in the 3rd quarter of 2025.

Speaker #4: The decrease in revenues and segment profit primarily reflects $11 million of gains recognized in the 3rd quarter of 2025 from the disposition of non-captive assets.

David Rosenberg: To wrap up guidance, we are raising our expected full year adjusted earnings per share to be in the range of $6.55 to $6.65, from our prior range of $6.40 to $6.60. We are also raising our expected full year manufacturing cash flow before pension contributions to be in the range of $800 million to $900 million, up from our prior range of $700 million to $800 million. This concludes our prepared remarks, and we are happy to open the line for questions.

Speaker #4: To wrap up guidance, we are raising our expected full-year adjusted earnings per share to be in the range of $6.55 to $6.75. 65 cents from our prior range of $6.40 to $6.60.

Speaker #4: We are also raising our expected full-year manufacturing cash flow before pension contributions to be in the range of $800 million to $900 million, up from our prior range of $700 million to $800 million.

Speaker #4: This concludes our prepared remarks, and we are happy to open the line for questions.

Operator: Thank you. At this time, if you'd like to ask a question, please press star one on your telephone keypad. If you'd like to withdraw your question, simply press star one again. Your first question today comes from the line of Robert Stallard from Vertical Research. Your line is open.

Speaker #5: Thank you. At this time, if you would like to ask a question, please press star 1 on your telephone keypad. If you would like to withdraw your question, simply press star 1 again.

Speaker #4: Your first question today comes from the line of Robert Stollard from Vertical Research. Your line is open. Thanks so much. Good morning. Morning. Morning, Rob.

Robert Stallard: Oh, thanks so much. Good morning.

David Rosenberg: Morning.

Lisa Atherton: Good morning, Rob.

Robert Stallard: Lisa, maybe we will start it off with Aviation. I was wondering if you are seeing any changes in your customer buying behavior due to the increase in interest rates or any other of these geopolitical issues.

Speaker #6: Lisa, maybe we'll start it off with aviation. I was wondering if you're seeing any changes in your customer buying behavior due to the increase in interest rates or any other of these geopolitical issues.

Lisa Atherton: Well, thanks, Rob. We have not seen any changes to that. In fact, as we noted in the remarks, we have actually seen our highest booking of orders in almost three years. So we are continuing to see strong support for our products across the board. I think some of that is driven by some of the investment we have made in increased capabilities on the aircraft, as well as folks wanting the demand for this. We see high demand in flying hours, so we continue to see strong support for the product.

Speaker #6: No, thanks, Rob. We have not seen any changes to that. In fact, as we noted in the remarks, we have actually seen our highest booking of orders in almost three years.

Speaker #6: So

Speaker #5: We are continuing to see strong support for our products across the board. I think some of that is driven by some of the investment we've made in increased capabilities on the aircraft.

Speaker #4: As well as folks wanting the demand for this. We see high demand in flying hours, so we continue to see strong support for the product.

Robert Stallard: That is great. Then just as a follow-up, on the defense side, with the MV-75, now that we have this funding approved, Dave, I was wondering if you could sort of walk us through what the financial profile for this program is going forward. Thank you.

Speaker #6: That's great. And then, just as a follow-up on the defense side with the MV-75, now that we've got this funding approved, Dave, I was wondering if you could walk us through what the financial profile for this program is going forward.

Speaker #6: Thank you.

David Rosenberg: Well, as we talked about, we got the ATR approved in Q3, which covered our funding requirements for what we invested in the program in Q3. As we go forward, we are obviously currently in a CR situation for at least the short and medium term. We would expect a steady state in Q4, which has already been reflected in the guidance that we have shared with you. Then as we go forward into 2027, we will just wait and see what the funding profile looks like from going from a CR to what we expect will ultimately be an approved defense budget.

Speaker #4: So, you know, as we talked about, we got the ATR approved in Q3, which covered our funding requirements for what we invested in the program in Q3.

Speaker #4: So as we go forward, we're obviously currently in a CR situation for at least the short and medium term. So we would expect kind of a steady state in Q4, which has already kind of been reflected in the guidance that we've shared with you.

Speaker #4: And then as we go forward into 2027, we'll just kind of wait and see what the funding profile looks like from going from a CR to what we expect will ultimately be an approved defense budget.

Robert Stallard: Okay. So we probably have to wait for appropriations of FY27, therefore, to get more clarity on the situation?

Speaker #6: Okay, so we probably have to wait for appropriations of FY27, therefore, to get more clarity on the situation.

Lisa Atherton: Yeah, that is right, Rob. Obviously, I think continuing resolutions have become a bit of standard operating procedures that we have seen over the past several years, so we are working closely with the Army, with the funds that they have available. 11 December is when this CR expires, so we look forward to Congress approving a 2027 budget. As you guys have seen reflected previously, it is a very healthy budget for the program, reflecting about $2.3 billion for 2027 and supported across the 4 subcommittees. So I think we look forward to them approving that budget and continuing to move forward with the MV-75.

Speaker #5: Yeah, that's right, Rob. I mean, we're obviously— I think continuing resolutions have become a bit of standard operating procedures that we've seen over the past several years.

Speaker #5: So we're working closely with the Army with the funds that they have available. December 11th is when this CR expires. So we, we look forward to, to Congress approving a '27 budget.

Speaker #5: And as you guys have seen reflected previously, it's a very healthy budget for the program, reflecting about $2.3 billion for 2027 and supported across the 4 subcommittees.

Speaker #5: So I think we, we look forward to them approving that budget and continuing to move forward with the MB-75. That's great. Thank you very much.

Robert Stallard: That is great. Thank you very much.

Lisa Atherton: Thank you.

Speaker #5: Thank you. Your next question comes from the line of Miles Walton from Wolfe Research. Your line is open.

Operator: Your next question comes from a line of Myles Walton from Wolfe Research. Your line is open.

Myles Walton: Thanks. Good morning. David, on the free cash flow outlook raise, can you comment on the drivers to that? Also, were there any reserves from prior periods on the MV-75 where you are being more conservative that you actually ended up reversing, or were there no changes whatsoever to the EAC on that?

Speaker #4: Thanks. Good morning, David. On the free cash flow outlook raise, can you comment on the drivers of that? And also, were there any reserves from prior periods on the MB-75 where you were being more conservative that you actually ended up reversing, or were there no changes whatsoever to the EAC on that?

David Rosenberg: I'll take the second part first. We didn't reverse anything prior. That really just comes down to the timing of us going from the ATR approval to the contract mod phase. We'll continue to evaluate that as we go forward. Looking overall from the cash flow perspective, the biggest driver in the increase was the lower expected CapEx spend this year by about $100 million. Well, as stated overall we saw really good, as Lisa mentioned before, order activity at Aviation in Q3 and had corresponding deposits. We expect to continue to have good cash flow performance in Q4. So the combination of those factors is what led us to the $100 million increase to $800 million to $900 million.

Speaker #4: I'll take the second part first. We didn't reverse anything prior. I mean, that really just comes down to the timing of us going from the ATR approval to the contract mod phase.

Speaker #4: So we'll continue to evaluate that as we go forward. Looking overall from the cash flow perspective, the biggest driver in the increase was the lower expected CapEx spend this year by about $100 million.

Speaker #4: I will state overall, we saw really good, as Lisa had mentioned before, order activity at Aviation in Q3 and had corresponding deposits. And we expect to continue to have good cash flow performance in Q4.

Speaker #4: So the combination of those factors is what led us to the $100 million increase to $800 million to $900 million. Okay. And Lisa, any update you can provide on the industrial sales spend process?

Myles Walton: Okay. Lisa, any update you can provide on the industrial sales spin process? Thanks.

Speaker #4: Thanks.

Lisa Atherton: What I'd say, Myles, is that we're pleased with how the progress is going. We continue to be on our timeline that we talked about back in April. As soon as we make some progress there, we'll be sure to announce.

Speaker #5: Yeah, what I'd say, Roz, is that we're pleased with how the progress is going. We continue to be on our timeline that we talked about back in April.

Speaker #5: And as soon as we make some progress there, we'll be sure to announce. Okay, thank you.

Myles Walton: Okay. Thank you.

Speaker #4: Thanks.

Operator: Your next question comes from the line of Gavin Parsons from UBS. Your line is open.

Speaker #5: Your next question comes from the line of Gavin Parsons from UBS. Your line is open.

Gavin Parsons: Thanks. Morning.

Speaker #4: Thanks. Morning. Morning, Gavin.

Lisa Atherton: Morning, Gavin.

Gavin Parsons: I was hoping you could go into a little bit more on the supply chain detail. It is super helpful on all the internal initiatives, a little bit more on external status, and then what timeframe we should expect to see improvement from the vertical integration and the multi-sourcing on those initiatives like spars you have talked about. When should we see that unlock higher deliveries?

Speaker #7: I was hoping you'd go into a little bit more on the supply chain detail. It's super helpful on all the internal initiatives, a little bit more on external status, and then what timeframe we should expect to see improvement from the vertical integration and the multi-sourcing on those initiatives like SPARS you've talked about.

Speaker #7: When should we see that unlock higher deliveries?

Lisa Atherton: Sure. I guess I will go with the discrete on spars. We have qualified a second supplier. We are starting to see those come into play in the coming quarter, then we expect that to really transition into progress going into FY27. Discreetly, as we are making all of those efforts across the various, I will say, supply chain insourcing, we should start to see progress with that both at Bell and at Aviation throughout 2027. Our supply base has actually, when we look at parts available on the factory floor, we are back to where we were in about the 2021 timeframe. We are not where we were in 2019, but we are getting closer to that parts availability that we saw several years ago. The thing that holds us up is probably three or four key supply issues, and it is largely engines, extrusions, spars, and APUs.

Speaker #5: Sure. So I'll, I guess I'll go with the discrete on SPARS. We've qualified a second supplier. We are starting to see those come into play in the coming quarter.

Speaker #5: And then we expect that to really transition into progress going into FY27. So discretely, as we're making all of those efforts across the various I'll say supply chain insourcing.

Speaker #5: We should start to see progress with that both at Bell and at Aviation throughout 2027. Our supply base has actually, when we look at parts available on the factory floor, we are back to where we were in about the 2021 timeframe.

Speaker #5: We're not where we were in 2019, but we are getting closer to that parts availability that we saw, you know, several years ago. The thing that holds us up is probably 3 or 4 key supply issues, and it's largely engines.

Speaker #5: Extrusions, spars, and GPUs. And so we are putting a focused target on those 4 in order to make sure we can get them in and get the aircraft out the door.

Lisa Atherton: We are putting a focus target on those four in order to make sure we can get them in and get the aircraft out the door. Where I would say we have made a lot of progress across the many thousands of suppliers that we have across the business, those four we will put a severe focus on in order to get them in the door. I would say roughly, I feel very good about where we are making progress on the supply chain.

Speaker #5: So where I would say we've made a lot of progress across the many thousands of suppliers that we have across the industry or across the business, those 4 we have put a severe focus on in order to get them in the door.

Speaker #5: But I would say roughly, I feel very, very good about where we're making progress on the supply chain.

Gavin Parsons: Okay. That is great. David gave us a lot of color on maybe the margin impact last quarter, but maybe just thoughts on what drives the Q4 margin step up. I think it still needs to be pretty large to get into your guidance range.

Speaker #7: Okay. That's great. And Dave gave us a lot of color on maybe the margin impact last quarter, but maybe just thoughts on what drives the 4Q margin step up.

Speaker #7: I think it still needs to be pretty large to get into your guidance range.

David Rosenberg: Well, at Aviation, I would say it is going to be largely around the turboprop side, so you could view that as a volume mix. Probably we will see a relatively similar profile on jet deliveries. Those are kind of the key drivers in which get us to the higher margin performance overall in Q4, which gets us, as we previously talked about, to the low end of the guidance range of 11% to 12% for the total year.

Speaker #4: Yeah, so I mean, in aviation, I would say it's gonna be largely around the turboprop side. So, you kind of could view that as a volume mix.

Speaker #4: Probably we'll see a relatively similar profile on jet deliveries. And those are kind of the key drivers in which get us to the higher margin performance overall in Q4, which gets us, as we previously talked about, to the low end of the guidance range of 11 to 12% for the total year.

Gavin Parsons: Okay. So that is the same low end there?

Speaker #7: Okay, so that's the same low end there. Yeah, yep, correct. Thank you.

David Rosenberg: Yeah, correct.

Gavin Parsons: Okay. Thank you.

David Rosenberg: Yep.

Speaker #4: Yep.

Operator: Your next question comes from a line of Gautam Khanna from TD Cowen. Your line is open.

Speaker #5: Your next question comes from the line of Gautam Khanna from TD Cowen. Your line is open.

Gautam Khanna: Yeah, thanks. Good morning, guys.

Speaker #4: Yeah, thanks. Good morning, guys. Morning. Was wondering if you could elaborate on the MV75 accounting nuances, because if I recall last quarter, you guys did take a negative EAC related to the

Lisa Atherton: Morning.

Gautam Khanna: Was wondering if you could elaborate on the MV-75 accounting nuances, because if I recall last quarter, you guys did take a negative EAC related to the funding delay. It did not sound like you reversed it this quarter. So I wanted to ask about that. And if there is any learning curve lost from what already happened. And when the LRIP 1 contract is ordered, is it still a $60 to $110 million negative charge that you expect, or did that number change at all? Thanks.

Speaker #8: funding delay. It didn't sound like you reversed it this quarter.

Speaker #7: So I wanted to ask about that. And then also, and

Speaker #8: if there's any learning curve lost from what already happened. And then on the— when the LRIP 1 contract is ordered, is it still a $60 to $110 million negative charge that you expect, or did that, that number change at all?

Speaker #8: Thanks.

David Rosenberg: I will take the last part first. With the start of the fiscal year in a CR, we would expect a possible push in the timing of the LRIP award. Previously, we were thinking Q4 into Q1 of next year. As it goes beyond that, you would see just basically on how program accounting works, that that range will probably increase. So it will probably go up to $110 to $150 million if, as we expect, that award pushes into next year. On the other question that you had, we did not reverse any of the charges that we took on our Q2 earnings related to the MV-75. The process on the ATR is Congress approved the ATR, and then pieces of that get converted over time into contract mods. As that happens, we recognize it.

Speaker #4: I'll take the last part first. With the start of the fiscal year in a CR, we'd expect a possible push in the timing of the LRIP award.

Speaker #4: Previously, we were thinking, you know, Q4 into Q1 of next year. So as it goes beyond that, you would see just basically on how program accounting works that that range will probably increase.

Speaker #4: So it'll probably go up to $110 to $150 million if, as we expect, that award pushes into next year. On the other question that you had, we did not reverse any of the charges that we took on our Q2 earnings related to the MV-75.

Speaker #4: The process on the ATR is Congress approved the ATR, and then pieces of that get converted over time into contract mods. So as that happens, we recognize it.

David Rosenberg: The key point is that on Q3, we were able to recognize what our costs were in Q3 and cover those. As timing continues to progress and the remaining contract mods take place, we will then be able to take a look at previous charges.

Speaker #4: The key point is on Q3, we were able to recognize what our costs were in Q3 and cover those. And as the time— as timing continues to progress and the remaining contract mods take place, we will then be able to take a look at previous charges.

Gautam Khanna: Got you. Thank you very much.

Speaker #4: Got you. Thank you very much.

Operator: Your next question comes from a line of Sheila Kahyaoglu from Jefferies. Your line is open.

Speaker #9: Your next question comes from the line of Sheila Kiyoglu from Jefferies. Your line is open.

Lisa Atherton: Hey, Sheila.

Sheila Kahyaoglu: Good morning, guys, and thank you so much. Hi, Lisa. How are you?

Speaker #8: Good morning, guys, and thank you so much. Hi, Lisa, how are you? Really great execution in the quarter. Aviation showed strong progress at 50 jet deliveries, and margins were pretty steady at 10.7%.

Lisa Atherton: Morning.

Sheila Kahyaoglu: A really great execution in the quarter. Textron Aviation showed us strong progress at 50 jet deliveries, and margins were pretty steady at 10.7%. You talked about it a little bit already, but can you talk us through your latest thinking about restoring some of the inefficiencies and the investments you are making into the supply chain and labor as we start thinking about 2027?

Speaker #8: You know, maybe—can you just, you talked about it a little bit already, but can you talk us through your latest thinking about restoring some of the inefficiencies and the investments you're making into the supply chain and labor as we start thinking about '27?

Lisa Atherton: Absolutely. So look, this has been our theme throughout the year as we continue to put investment down on the factory floor, making sure that we are looking where we have jig locks or where we have, I will say, basic blocking and tackling, where we need to have engineers on the floor next to the team in order to ensure that we can unlock some of the efficiencies that we have lost. So we are seeing good progress in several of the lines. We still have a couple of areas that we want to make sure that we focus on, largely in the turboprop space. And what we have seen is requests for capital that you will see us start to invest in over the next year that will improve the production tooling that we have out on the factory floor.

Speaker #5: Absolutely. So look, I mean, this has been our theme throughout the year as we continue to put investment down on the factory floor, making sure that we are looking where we have jig locks or where we have I'll say basic blocking and tackling.

Speaker #5: We need to have engineers on the floor next to the team in order to ensure that we can unlock some of the efficiencies that we've lost.

Speaker #5: So we are seeing good progress in several of the lines. We still have a couple of areas that we want to make sure that we focus on, largely in the turboprop space.

Speaker #5: And what we have seen is requests for capital that you will see us start to invest in over the next year that will improve the production tooling.

Speaker #5: that we have out on the factory floor. So that's our next big push, is to put some good capital tooling out on the floor in order to have these work instructions be more commensurate with what this workforce would like to see.

Lisa Atherton: So that is our next big push, is to put some good capital tooling out on the floor in order to have these work instructions be more commensurate with what this workforce would like to see. And so where we have our newer models and we have better work instructions and we have better tooling, we have better efficiency and better production. So we think that is a good model, so we are going to continue to push that back into our older models. We also saw some improved learning on some of our new block points that we put in earlier in the year.

Speaker #5: And so where we have our newer models and we have better work instructions and we have better tooling, we have better efficiency and better production.

Speaker #5: So we think that's a good model. So we're going to continue to push that back into our older models. We also saw some improved learning on some of our new block points that we put in earlier in the year, and so as we see those continue to progress and as we work through the new block points that you'll see come out next year with the Gen 3s, we're going to work to get ahead of that.

Lisa Atherton: As we see those continue to progress, and as we work through the new block points that you will see come out next year with the Gen3s, we are going to work to get ahead of that, to make sure we have good learnings and learning curves on those platforms, through 2027.

Speaker #5: To make sure we have good learnings and learning curves on those platforms through 2027.

Sheila Kahyaoglu: Okay. That is super helpful. Maybe if I could just ask on Systems then, just breakout quarter, 16% growth. I do not think I have seen that business grow 16% and really great margins as well. Can you call out what drove that performance and how we should expect that to continue as we progress through the end of this year and into next?

Speaker #8: Okay, that's super helpful. Maybe if I could just ask on systems then, just breakout quarter, 16% growth. I don't think I've seen that business grow 16% and really great margins as well.

Speaker #8: Can you call out, you know, what drove that performance and how we should expect that to continue as we progress through the end of this year and into next?

Lisa Atherton: Yeah, sure. So look, on Ship-to-Shore Connector is a large one. That one has been a tough program for many years, as you guys well know. That one has, to use a pun, is up on plane now. We are starting to see good progress, good productivity. The hours that it takes to build through the various different stations have come down. We are starting to see consistency from the government in terms of their order activity. For the first time, we are starting to see our ability to forecast out several years in the FYDP. That allows us to have better leverage with suppliers and when we are going out to order material, so we can get better costing on the supply base. The Ship-to-Shore is something that leads us into, I will say, good growth and productivity there.

Speaker #5: Yeah, sure. So look, Unshipped-to-Shore Connector is a large one. That one has been a tough program for many years, as you guys well know.

Speaker #5: And so that one has, to use a pun, is up on plane now. And so we are we're starting to see good progress, good productivity.

Speaker #5: The hours that it takes to build through the various different stations have come down, and we're starting to see consistency from the government in terms of their order activity.

Speaker #5: And so for the first time, we're starting to see our ability to forecast out several years in their— in the FIDAP. And that allows us to have better leverage with suppliers and when we're going out to order materials so we can get better costing on the supply base.

Speaker #5: So the ship-to-shore is something that leads us into, I'll say, good good growth and productivity there. On the land side, we mentioned it in the script there, the filling up with the factory floor with the Ukraine MSFEs, 65 vehicles there, 10 prototypes on the XM30, and then the 16 prototypes for the ARRV.

Lisa Atherton: On the land side, we mentioned it in the script there, the filling up with the factory floor with the Ukraine MSFVs, 65 vehicles there, 10 prototypes on the XM30, and then the 16 prototypes for the ARV. That is a lot of really great work, and productivity that the team has got going on. Those two in particular have really led to good growth in the quarter. ATAC continues to perform well on their service side, as well as we are seeing growth in our service, fee for service, both on the Aerosonde still, and then in our unmanned surface vehicles on the TSUNAMI and awards in our CUSVs. Look, across the board, I would say just Systems just really hit it out of the park this quarter.

Speaker #5: That's a lot of really great work and productivity that the team has got going on. And so Those two in particular have really led to good growth in the quarter.

Speaker #5: ATAC continues to perform well on their service side, as well as we're seeing growth in our service. Feeper service both on the Aerathon still and then in our unmanned surface vehicles on the Tsunami and awards in our CUSVs.

Speaker #5: So across the board, I would say just systems just really hit it out of the park this quarter. And so we, we have a lot of things out there for awards in the coming years, and I expect us to continue to see good growth.

Lisa Atherton: We have a lot of things out there for awards in the coming years, and I expect us to continue to see good growth.

Sheila Kahyaoglu: Awesome. Thank you.

Speaker #5: Awesome. Thank you.

Lisa Atherton: Thanks.

Speaker #8: Thanks.

Operator: Your next question comes from the line of Seth Seifman from JPMorgan. Your line is open.

Speaker #9: Your next question comes from the line of Seth Seifman from JPMorgan. Your line is open.

[Analyst] (JPMorgan): Good morning, guys. This is Jamie on for Seth today.

Speaker #4: Oh, good morning, guys. This is Jamie on for Seth today. Morning, Jamie. Thanks for the question. Morning, thanks for the question. I just wanted to ask quickly about MV-75, the ATR, just to get a little bit of clarity.

Lisa Atherton: Morning, Jamie.

[Analyst] (JPMorgan): Thanks for the question. Morning. Thanks for the question. I just wanted to ask quickly about MV-75, the ATR, just to get a little bit of clarity. I know you said the $350 million was approved, I think, but only the $300 million obligated in Q3. Would it be safe to assume that the other $50 million would be obligated in Q4, or is there more nuance there?

Speaker #4: I know you said the $350 million was approved, I think, but only the $300 million was obligated in the 3rd quarter. So would it be safe to assume that the other $50 million would be obligated in the 4th quarter, or is there more nuance there?

Lisa Atherton: Yeah, so if I could, what the $350 million was the request of the estimate of what the government expected that we would need throughout Q3. When those numbers were put together, it was before we had actually completed actuals. As we worked through the quarter and then achieved those actuals, we worked closely with the government once they received their approvals. The government was able to quickly put on contract mod the $300 million to cover the actuals that we and our suppliers had accrued. Now we are working through the process where they have completed those mods. We work through invoicing. As supplier invoices continue to trickle in through this month and next month, we will continue to obligate against that. Yes, the government has additional funds at their discretion that goes up to the full ATR.

Speaker #5: Yes, so if I could, what the $350 million was, was the request of the estimate of what the government expected that we would need throughout the 3rd quarter.

Speaker #5: When those numbers were put together, it was before we had actually completed actuals. As we worked through the quarter and then achieved those actuals, we worked closely with the government once they received their approvals.

Speaker #5: So the government was able to quickly put on contract mod the $300 million to cover the actuals that we and our suppliers had accrued.

Speaker #5: And so now we're working through the process where they are— they've completed those mods, we worked through invoicing. As supplier invoices continue to trickle in through this month and next month, we will continue to obligate against that.

Speaker #5: And yes, the government has additional funds at their discretion that go up to the full ATR. As those are required to cover that '26 spend, they will be able to utilize those.

Lisa Atherton: As those are required to cover that 2026 spend, they will be able to utilize those. At the moment, what we have been able to identify and communicate with them is spend the $300 million.

Speaker #4: But at the moment, what we've been able to identify and communicate with them has been the $300 million. And then if I could add to that, as we continue to go through that timing process, as Lisa described, that's the point when we can review the previously— previous cume catch that we took in Q2 of 2026.

David Rosenberg: If I could add to that, as we continue to go through that timing process, as Lisa described, that is the point when we can review the previous cum catch that we took in Q2 2026. That is just really a timing process that we are going through.

Speaker #4: So that's just really a time— timing process that we're going through. Correct. Okay, got it. That's super helpful. Thank you. And then maybe just on the aviation segment.

Lisa Atherton: Correct.

[Analyst] (JPMorgan): Okay. Got it. That is super helpful. Thank you. Then maybe just on the Aviation segment, so obviously, healthy growth year-over-year and sequentially for the aftermarket. I know you guys are a little bit less exposed to the large fleet operators, which tend to have higher utilization. I was just wondering, looking at that strong aftermarket performance, is there any differences or drivers between customer types or operator types that is driving that growth in the aftermarket, or is it more broad based?

Speaker #4: So obviously, you know, healthy growth, you know, year over year and sequentially for the aftermarket. I know you guys are a little bit less exposed to, you know, the large fleet operators, so which, you know, tend to have higher utilization.

Speaker #4: I was just wondering, looking at that strong aftermarket performance, is there any differences or drivers between customer types or operator types that's sort of driving that growth in the aftermarket, or is it more broad-based?

Lisa Atherton: Well, I think it is more broad based. We are just seeing high utilization across the board on the fleet operators as well as retail side. I think we just see strong. Frankly, our teams, service and support people, want to come back through to us. We are seeing more folks return to our service and support team, in order to have their aircraft managed and handled. I think it has just been a factor of higher hours flown and people rewarding the fact that we are great partners to them in the aftermarket space.

Speaker #5: Yeah, I think it's more broad-based. I mean, we're just seeing high utilization across the board on the fleet operators as well as retail side.

Speaker #5: So I think it's— we just see strong and frankly, our team's service and support— people want to come back through to us. And so we are seeing more folks return to our service and support team in order to have their aircraft managed and handled.

Speaker #5: And so We— I think it's just been a factor of higher hours flown and people, you know, rewarding the fact that we are great partners to them in the aftermarket space.

[Analyst] (JPMorgan): All right. Great. Thanks so much.

Speaker #5: All right, great. Thanks so much.

Speaker #4: Yep.

Operator: Your next question comes from the line of Noah Poponak from Goldman Sachs. Your line is open.

Speaker #9: Your next question comes from the line of Noah Popanac from Goldman Sachs. Your line is open.

Noah Poponak: Hey, good morning, everyone.

Speaker #4: Hey, good morning, everyone. Morning, Adam. Um, Can we expect the aviation segment to have its normal incremental margin next year? Or are the additional investments and kind of operational volatility you know, still occurring in the first half such that that does not happen?

Lisa Atherton: Morning.

Noah Poponak: Can we expect the Aviation segment to have its normal incremental margin next year, or are the additional investments and operational volatility still occurring in the H1 such that that does not happen?

David Rosenberg: Lisa highlighted all the initiatives we are doing. This is going to be, I think, a 12-month journey. As we go throughout next year, you should see improvement throughout the year. We are obviously not ready yet to give guidance into 2027. But this is going to be, I think, a 12-month journey of improvement as we go forward into Q4 and then into the H1 of next year.

Speaker #4: So I think, you know, Lisa highlighted all the initiatives we're doing. So this is going to be, you know, I think a 12-month journey.

Speaker #4: So as we go throughout next year, you should see improvement throughout the year. We're obviously not ready yet to give guidance into 2027, but this is going to be, I think, a 12-month journey of improvement.

Speaker #4: As we go forward into Q4 and then into the first half of next year.

Noah Poponak: Okay. Just back to that Systems margin, is there anything one-time in that Systems margin, or is it clean? What does that mean for the forward profitability in the segment?

Speaker #5: Okay.

Speaker #10: And just back to that systems margin, is there anything one-time in that systems margin or is it clean? And what does that mean for the forward profitability in the segment?

David Rosenberg: There is one one-time item. It is related to actually in Q3 of 2025, we had a one-time. Well, it is really a two-time benefit related to an exit of a lease. There was a benefit in Q3 of 2025. There was also a benefit in Q3 of 2026. Now, if you were to compare the two years, it is actually a headwind, but it did improve the margin somewhat in Q3 of 2026. It is about $9 million, if you want to look at that from a comparison perspective. So still very comfortably in the margin range of Textron Systems that we had given for guidance for the year.

Speaker #4: There's one one-time item. It's related to, actually, in Q3 of 2025, we had a one-time—well, it's really a two-time benefit—related to an exit of a lease.

Speaker #4: There was a benefit in Q3 of '25. There's also a benefit in Q3 of '26. Now, if you were to compare the 2 years, it's actually a headwind, but it did improve the margin somewhat in Q3 of 2026.

Speaker #4: It's about $9 million if you want to look at that from a comparison perspective. So, still very comfortably in the margin range of Textron Systems that we had given for guidance for the year.

Noah Poponak: Got it. Okay. Thank you.

Speaker #4: Got it. Okay, thank you.

Operator: Your next question comes from the line of Peter Arment from Baird. Your line is open.

Speaker #9: Your next question comes from the line of Peter Arment from Baird. Your line is open.

Peter Arment: Hey, thanks. Good morning, Lisa, Dave, Scott. Nice results.

Speaker #4: Hey, thanks. Good morning, Lisa. Dave Scott. Nice results.

Lisa Atherton: Thanks.

Peter Arment: Hey, Dave, maybe just a quick one, a clarification on MV-75. Just thinking about your Q4 is always typically really strong in terms of cash flow. What is assumed for any collections there, or are we waiting for budgets to be firmed up?

Speaker #7: Hey, Dave, maybe just a quick one, a clarification on MV75. Just thinking about your 4th quarter is always typically really strong in terms of cash flow.

Speaker #7: What's assumed for any collections there? Any, or are we waiting for budgets to be firmed up?

David Rosenberg: So obviously, our collection assumptions are embedded in our guidance. Q3 did have particular challenges relating to cash flow as the timing of the ATR obviously did not get approved until the end of the quarter. But keep in mind, and this is a credit to the entire team, we anticipated that and took actions in Q2 of 2025 to manage through those cash flow challenges. That, combined with really good performance from Textron Aviation, drove the result. As you can see, based on our cash flow guidance, we expect to have a very strong Q4 cash number.

Speaker #4: So obviously our collection assumptions are embedded in our guidance. Q3 did have particular challenges relating to cash flow as the timing of the ATR.

Speaker #4: Obviously, it did not get approved until the end of the quarter, but keep in mind—and this is a credit to the entire team—we anticipated that and took actions in Q2 of 2025 to manage through those cash flow challenges.

Speaker #4: That, combined with really good performance from Textron Aviation, drove the result. And as you can see, based on our cash flow guidance, we expect to have a very strong Q4 cash number.

Peter Arment: Got it. That is helpful. Then just Lisa, just quickly, back to Miles' question around the industrial separation. Are there milestones or timelines that you are thinking of? I know there is probably a lot you cannot say, but just any color there, that would be helpful.

Speaker #7: Got it. That's helpful. And then just, Lisa, just quickly, uh, back to kind of Miles' question around the industrial separation. Are there milestones or timelines that you're thinking of?

Speaker #7: Uh, I know there's probably a lot you can't say, but just any color there, that'd be helpful.

Lisa Atherton: Yeah, unfortunately, I do not want to get into that too much just now. But I would just continue to iterate that I am pleased with the progress, and I would say we are going to be able to stick to the timeline that we messaged back in April of a 12-month to 18-month separation or spin.

Speaker #5: Yeah, unfortunately, I don't want to get into that too much just now, but I would just continue to iterate that I'm pleased with the progress, and I would say we're going to be able to stick to the timeline that we that we messaged back in April of a, of a 12-month to 18-month separation or spin.

Peter Arment: Got it. Thanks, Lisa.

Speaker #5: Got it. Thanks, Lisa.

Lisa Atherton: Yep.

Speaker #7: Yep.

Operator: Your next question comes from the line of David Strauss from Wells Fargo. Your line is open.

Speaker #9: Your next question comes from the line of David Strauss from Wells Fargo. Your line is open.

Ben Tomick: Hi, good morning. This is Ben Tomick in for David.

Speaker #10: Hi, good morning. This is Ben Tomik going for David. Morning. Hi. I was just wondering, any, any update on the Gen 3 program timeline in terms of certification and entry into service?

David Rosenberg: Morning.

Lisa Atherton: Morning.

Ben Tomick: I was just wondering, any update on the Gen3 program timeline in terms of certification and entry into service? Any milestones coming in there?

Speaker #10: Any milestones?

Speaker #4: Uh, come in there.

Lisa Atherton: Yeah. So as I think I mentioned in the script there, we have progressed forward with all of the flight tests. We are in F&R, and I do believe in H1 2027, we should start to see some of those entry into service.

Speaker #5: Yeah, so as I think I mentioned in the script there, we have progressed forward with all of the flight tests. We're in F&R and the We— I do believe in the first half of '27, we should start to see some of those entry into service.

Ben Tomick: Great. Thank you. Going over to defense, are there any upcoming competitions worth flagging and any risk there?

Speaker #10: Great. Thank you. And then going over to defense, are there any upcoming competitions worth flagging and any risk there?

Lisa Atherton: For any risk there? No, I would not say we have any risk there. The Textron Aviation Defense team is competing for the Navy jet trainer program. We expect that to be awarded mid-next year. I do think that is a key one that we feel like we are in a pretty strong position for. I feel like we are in a pretty good stead on that one. Look, there is always a risk that you may not win something, but I feel pretty good about where we are with the program.

Speaker #4: For any risk there.

Speaker #5: No, I wouldn't say we have any risk there. We're the, the Textron Aviation defense team is competing for the Navy jet trainer program, and so we expect that to be awarded mid next year.

Speaker #5: And so I do think that's a key one that we feel like we're in a pretty strong position for. And so I feel like we're in a pretty good stead on that one.

Speaker #5: And look, there's always—always—a risk that you may not win something, but I feel pretty good about where we are with the program.

Ben Tomick: All right. Thanks.

Operator: Your next question comes from the line of John Godyn from Citi. Your line is open.

Speaker #9: Your next question comes from the line of John Godin from Citi. Your line is open.

John Godyn: Hey, thanks for taking my question. I wanted to just ask about Aviation into next year. Completely appreciate that more detailed guidance is going to come out on Q4. But we have a backdrop of strong demand. We have what sounds like improving supply chain issues. Is there anything you can offer just to level set us a little bit on what is possible with delivery growth so we have some color?

Speaker #4: Hey, thanks for taking my question. I wanted to just ask about aviation into next year. Completely appreciate that more detailed guidance is going to come out on 4Q.

Speaker #4: But we have a backdrop of strong demand. We've got what sounds like kind of improving supply chain issues. Is there anything you can offer just to level-set us a little bit on what's possible with delivery growth?

Speaker #4: So, you know, we're— we have some color.

Lisa Atherton: Well, I think it is a little early to start guiding in that regard. I would say that my charter and ask across the business is that we continue to try to move ourselves to around the 200 delivery range for all of our turboprops, jets, and our helicopters. So you are seeing us implement strategies, capital, and investment into our workforce in order to support something. As Dave mentioned, it will be a journey on that over the next 12 months. But I feel like we are making the right steps in order to get there.

Speaker #5: Yeah, I think it's a little early to start guiding in that regard. I would say that my charter and ask across the business is that we continue to try to move ourselves to around the 200-delivery range.

Speaker #5: For all of our turboprops, jets, and our helicopters. And so you're seeing us implement strategies, capital, and investment into our workforce in order to support something And as Dave mentioned, it'll be a journey on that over the next 12 months, but I feel like we're making the right steps in order to get there.

John Godyn: Okay, fair enough. Lisa, just changing gears, M&A strategy at large. A couple quarters ago, I feel like it was a little bit more of a focal point. You had mentioned the possibility of acquiring space assets or other kind of on-theme assets. Maybe you could just kind of plug us into your latest thinking.

Speaker #4: Okay, fair enough. And Lisa, just changing gears, M&A strategy at large, a couple quarters ago, you know, I feel like it was a little bit more of a focal point.

Speaker #4: You had mentioned the possibility of acquiring space assets or other kind of on-theme assets. Maybe you could just kind of plug us into your latest thinking.

Lisa Atherton: Yeah, sure. So look, I have got my game board that I make sure that I am monitoring on what we would do in terms of acquiring certain assets. As you have, I am sure, seen that some of the multiples on some of these, the quality of assets out there, we just want to make sure that what we acquire makes good sense. But we have a very strong balance sheet. I think as we move more towards a pure play A&D, you will see us lean into that.

Speaker #5: Yeah, sure. So look, I've got my game board that I make sure that I'm monitoring on what we would do in terms of acquiring certain assets.

Speaker #5: And as you've, I'm sure, seen that some of the multiples on some of these the quality of assets out there. We just want to make sure that what we acquire makes good sense.

Speaker #5: And— but we have a very strong balance sheet. I think as we move more towards a pure-play A&D, you'll see us lean into that.

Lisa Atherton: But I want to be clear, this is across the board of what we are looking at, both insourcing suppliers that might be a good fit for us to make that of more of a vertical asset to us, as well as assets along the space side, which would be around thermal protective materials that would be complementary to what we do up around our Wilmington business, as well as areas that would complement into the rest of the system. So I am still keen on that, and we are keeping our powder dry to make sure that when the right asset comes available, we will be ready.

Speaker #5: But I want to be clear—I mean, this is across the board of what we're looking at, both insourcing suppliers that might be a good fit for us, to make that more of a vertical.

Speaker #5: asset to us, as well as assets along the space side, which would be around thermal protective materials that would be complementary to what we do up around our Wilmington business.

Speaker #5: As well as areas that would complement into our— the rest of the system. So I am still keen on that, and we're keeping our powder dry to make sure that when the right asset comes available, we'll be ready.

John Godyn: Is the concept largely bolt-ons, or is there any appetite for something more transformational?

Speaker #4: And is the concept largely bolt-ons, or is there any appetite for something more transformational?

Lisa Atherton: Yes. I would say I am open to something transformational. I do think that that is what we need to do in order to move Textron forward. But it is going to have to be at the right point in time, and it is going to have to be the right asset.

Speaker #5: Yes, and so I would say I am open to something transformational. I do think that that's what we need to do in order to move Textron forward, but it's going to have to be at the right point in time, and it's going to have to be the right asset.

John Godyn: Great. Appreciate the color.

Speaker #4: Great. Appreciate the color.

Lisa Atherton: Thanks.

Speaker #5: Thanks.

Operator: Your next question comes from the line of Kristine Liwag from Morgan Stanley. Your line is open.

Speaker #9: Your next question comes from the line of Christine Lewag from Morgan Stanley. Your line is open.

Kyle Benvenuto: Hi, this is Kyle Benvenuto on for Kristine. Thanks for taking my question. You indicated that approximately $100 million of lower CapEx is the largest driver of higher cash flow outlook. Is that primarily spending deferred into 2027, or a reduction in total investments required? With additional Aviation tooling investment planned for next year, how should we think about 2027 CapEx? Does that lower 2026 spend change the timing of any production or productivity improvements? Thank you for taking my question.

Speaker #10: Hi, this is Kyle Benvenuto on for Christine. Thanks for taking my question. You indicated that approximately $100 million of lower CapEx is the largest driver of higher cash flow outlook.

Speaker #10: Is that primarily spending deferred into 2027, or a reduction in total investments required? And then, with additional aviation tooling investment planned for next year, how should we think about 2027 CapEx?

Speaker #10: Does that lower 2026 spend change the timing of any production or productivity improvements? Thank you for taking my question.

David Rosenberg: Well, as we've discussed our CapEx view over the next couple of years, we've kind of indicated previously that we'd expect kind of steady state CapEx in both 2026 and 2027. The $100 million lowering for 2026 I don't think changes our view for 2027. We have also expected to, and continue to have to invest more in CapEx at Aviation to drive productivity projects, which obviously will lead to better delivery numbers down the road, which of course translates into better cash flow. I would say the framework of how we've described CapEx investment here does not fundamentally change as a result of the lower $100 million CapEx spend in 2026.

Speaker #4: So, as we've discussed our CapEx view over the next couple of years, we've kind of indicated previously that we'd expect steady-state CapEx in both 2026 and 2027.

Speaker #4: The $100 million lowering for 2026, I don't think changes our view for 2027. We have also expected to and continue to have to invest more in CapEx at aviation to drive productivity projects, which obviously will lead to better delivery numbers down the road, which of course translates into better cash flow.

Speaker #4: I would say the framework of how we've described CapEx investment here does not fundamentally change as a result of the lower $100 million CapEx spend in 2026.

Operator: Your next question comes from the line of Ronald Epstein from Bank of America. Your line is open.

Speaker #9: Your next question comes from the line of Ronald Epstein from Bank of America. Your line is open.

Ronald Epstein: Hi, good morning, guys. Thanks. Maybe just a broad question. A lot of the details have been asked already. Lisa, you've been in the seat now for a couple quarters, and as you sit back and kind of look at your mandate, the portfolio, what areas are you most excited about, and what areas potentially do you think are the most challenging that you'll have to deal with to get the business to where you want it to be?

Speaker #10: Hi, good morning, guys. Thanks. So maybe just a broad question. A lot of the details have been asked already. Lisa, you've been in the seat now for a couple quarters and As you sit back and kind of look at your mandate.

Speaker #10: portfolio, you know, what areas are you most excited about and what areas potentially do you think are the most challenging that you'll have to deal with to get the business to where you want it to be?

Lisa Atherton: Well, look, not to be glib, but I often reflect on this. I think I am now 9 months, 29 days, and about 7 and a half hours into the job. So, I've had an opportunity to take a look at the portfolio. As you can see, we're reshaping that in order to move us forward into A&D, and I think that excites me the most. I think I understand where we need to go in terms of creating synergies across the business, the collaboration opportunities that we have in a company that is so deep with engineering expertise. The fact that we could take some expertise out of our business up in Maryland with unmanned air and pair that with some things that we've got going down at Bell doing unmanned SkyCouriers.

Speaker #5: Yeah, look, so not to be glib, but I often reflect on this. I think I am now 9 months, 29 days, and about 7 and a half hours into the job.

Speaker #5: So it's— I've had opportunity to take a look at the portfolio. As you can see, we're reshaping that in order to move us forward into A&D.

Speaker #5: And I think that excites me the most. I think I understand where we need to go in terms of creating synergies across the business, the collaboration opportunities that we have in a company that is so diverse.

Speaker #5: deep with engineering expertise. The fact that we could take some expertise out of our business up in Maryland with unmanned air and pair that with some things that we've got going down at Bell doing unmanned sky couriers.

Lisa Atherton: There's just a very exciting amount of collaboration that we can achieve across the entire company. I think we have to continue to push into these enterprise initiatives. An exciting example of this is what just came out this month from the government with Project Agincourt. I think that we fit nicely in where they're trying to go with Project Agincourt, and I think that we can lean into that and show that we've got not only exciting new defense technology, but decades of experience in how to manufacture these and make these capable in a warfighting scenario. Sorry, I got a little feedback there. It makes me excited. From the challenges standpoint, look, I think the challenges just continue to pop up around suppliers. I think we're getting better in terms of workforce retention.

Speaker #5: There's just a very exciting amount of collaboration that we can achieve across the entire company. And so I think we have to continue to push into these enterprise initiatives.

Speaker #5: An exciting example of this is what just came out this month from the government with Project Agent Court. I think that we fit nicely in where they're trying to go with Project Agent Court, and I think that we can lean into that and show that we've got not only exciting new defense technology, but decades of experience in how to manufacture these and make these capable in a warfighting scenario.

Speaker #5: So Sorry, I got a little feedback there. And so that it makes me excited. So from the challenges standpoint, look at it. I think the challenges just continue to pop up around suppliers.

Speaker #5: I think we're getting better. In terms of workforce retention, our retention rates are coming down to a more manageable level—kind of where we've seen around the pre-COVID area. Not all the way where we want it, but within a couple of percentage points.

Lisa Atherton: Our retention rates are coming down to a more manageable level, kind of where we have seen around pre-COVID area. Not all the way where we want it, but within a couple of percentage points from attrition. We will continue to have to manage and watch that. Not necessarily a challenge, but an exciting part is when we go do a meaningful acquisition and creating the synergies and the growth inside that. That always comes with a little bit of challenge, but I think it is a good challenge to have. I am excited about that.

Speaker #5: of— from attrition. And so we'll continue to have to manage and watch that. And then it— not necessarily a challenge, but an exciting part is when we go do a meaningful acquisition, and creating the synergies and the growth inside that, that always comes with a little bit of challenge, but I think it's a good challenge to have.

Speaker #5: And so I'm excited about that.

Ronald Epstein: Yeah, great. Maybe just one last follow on, if I may. Culturally, how is the company reacting to that? This is a change for your workforce. How are they reacting to it? Are they welcoming it? How do you bridge the cultural gap, if there is one?

Speaker #10: Yeah, great, great. And maybe just one last follow-on, if I may. Culturally, how is the company reacting to that, right? I mean, this is a change for your workforce.

Speaker #10: How are they reacting to it? Are they welcoming it? And how do you bridge the cultural gap if there is one?

Lisa Atherton: Sure. Yeah, look, thank you for opening that, because I want to take a moment to say thanks to our team over on the Industrial side. I think they culturally accepted that this was the right answer for Textron writ large. They have been fantastic at continuing to work and manage their business and their customers and take care of each other through what is very challenging, as you guys know, as they are also facing dealing with a separation process. I think culturally, just welcoming that, and the way that team has responded, I am very grateful for. For the rest of the business, I think the rest of the business is very energized. We have leaned in on some collaboration ideas. The team has come up with ways to work together.

Speaker #5: Sure. Yeah, look, so I want to take— thank you for opening that because I want to take a moment to just say thanks to our team over on the industrial side.

Speaker #5: I mean, I think they culturally accepted that this was the right answer for Textron writ large. And they have been fantastic at continuing to work and manage their business and their customers and take care of each other through What is very challenging, as you guys know, is they're also facing dealing with a separation process.

Speaker #5: So I think culturally just welcoming that and the way that team has responded has been I'm very grateful for. And for the rest of the business, I think the rest of the business is very energized.

Speaker #5: We have leaned in on some collaboration ideas. The team has come up with ways to work together. I think it's— they're excited about a new phase of Textron, and I'll say a new era.

Lisa Atherton: I think they are excited about a new phase of Textron and, I will say, a new era. I have received a lot of positive feedback. I am constantly reminded that what my job is to manage people, not just numbers. I am excited about doing that, and I think folks are responding to it.

Speaker #5: And so I've received a lot of positive feedback. And I'm constantly reminded that what my job is to manage people, not just numbers. And so I'm excited about doing that, and I think folks are responding to it.

Ronald Epstein: Got it. Great. Thank you for that.

Speaker #10: Got it. Great. Thank you for that.

Operator: Your next question comes from the line of Doug Harned from Bernstein. Your line is open.

Speaker #9: Your next question comes from the line of Doug Harnett from Bernstein. Your line is open. Good morning. Thank you.

Doug Harned: Good morning. Thank you.

Lisa Atherton: Good morning.

Speaker #10: You know, on aviation, on aviation, you had a really strong quarter for orders. But a couple of things. First, Can you give us a sense if you're seeing any shift in mix with the new orders coming in across your product portfolio?

Doug Harned: On Aviation, you had a really strong quarter for orders. But a couple things. First, can you give us a sense if you are seeing any shift in mix with the new orders coming in across your product portfolio? Also, you are still working to get that production rate up, trying to get up to that 200 number. But we have seen a lot of times when there are long delays between order and delivery, it slows order flow. Do you see the opportunity in your discussions with customers to take those order numbers up even more if you can get that production rate up?

Speaker #10: And then also, you're still working to get that production rate up, trying to get up to that 200 number. But, you know, we've seen a lot of times when there are long delays between order and delivery.

Speaker #10: You know, it slows order flow. Do you see the opportunity, in your discussions with customers, to take those order numbers up even more if you can get that production rate up?

Lisa Atherton: Yeah, absolutely. You have hit on it. If they can say, "I can get it inside a certain timeframe," instead of having to put a deposit down and wait for years, certainly, I think you are going to open up the order book even more. That is exactly why we are leaning in on trying to increase production workflow, and making sure the material is available to the team on the floor, so that they have got the material in order to put those products out the door. These all play together. I think the more product we are able to put out there, the more you will continue to see increased order book. In terms of mix, I do not think we see a shift in mix. We are getting, I will say, a pretty standard mix as we have seen in the past.

Speaker #5: Yeah, absolutely. I mean, you've hit on it. That's exactly— if they can say, I can get it inside a certain timeframe instead of having to put a deposit down and wait for years, I mean, certainly I think you're going to open up the order book even more.

Speaker #5: So That's exactly why we're leaning in on trying to increase production workflow and making sure that the material is available to the team on the floor so that they've got the material in order to put those products out the door.

Speaker #5: These all play together. I think the more product we're able to put out there, the more you'll continue to see increased order book. In terms of mix, I don't think we see a shift in mix.

Speaker #5: We're getting, I'll say, a pretty standard mix that we've seen in the past. So again, it's even in times where we're having, I'll say, less than optimal ways of getting it out the door, we're still seeing strong order delivery.

Lisa Atherton: Again, even in times where we are having, I will say, less than optimal ways of getting it out the door, we are still seeing strong order delivery. If we can continue to improve that production, I think we will continue to see even stronger orders. It is self-fulfilling.

Speaker #5: If we can continue to improve that production, I think we'll continue to see even stronger orders. So it's a self-fulfilling.

Doug Harned: Well, separately, on MV-75, you commented on the fit with the changing battlefield, and we are clearly seeing a rapidly changing battlefield. With an IOC out in 2030, and you look at that timing, there are a lot of other players out there looking at uncrewed aircraft, other options to go into this space over time, and some of them are willing to invest very large amounts of money to do it. How do you look out in that 2030 timeframe and see the landscape, how MV-75 will fit in there? You mentioned Project Agincourt, but how do you see your role potentially changing, either positively or with some threats?

Speaker #10: Well, and then separately on MV-75, you commented on the fit with the changing battlefield, and we're clearly seeing a rapidly changing battlefield. And with an IOC out in 2030, and you look at that timing, there are a lot of other players out there looking at uncrewed aircraft, other options to go into this space over time, and some of them are willing to invest very large amounts of money to do it.

Speaker #10: How do you look out in that 2030 timeframe and see the landscape, how MV-75 will fit in there? And you mentioned Project Agent Corp, but You know, what's— how do you see your role potentially changing either positively or with some threats?

Lisa Atherton: Yeah. I would submit that Team Cheyenne, led by Bell, we also have made significant investments in this technology and platform over the last 15 years. I think we were leaning into that for some time now in order to make sure that this capability is available for the war fighter. Whenever you go into a war-fighting scenario, you never go in with a single platform. All of these platforms have to work together. That is why the fact that we are the first modular open systems architecture platform that is going to be out there for the Army is going to give it the capability to interact and interface with these other technologies that will also be available on the battlefield. I see it going to be a key part of the future fight. Look, in terms of threats, I am not worried about that as much.

Speaker #5: Yeah, so I would submit that, you know, Team Cheyenne, you know, led by Bell, we also have made significant investments in this technology. and platform over the last 15 years.

Speaker #5: So I think we were leaning into that for some time now in order to make sure that this capability is available for the warfighter.

Speaker #5: Whenever you go into a warfighting scenario, you never go in with a single platform. All of these platforms have to work together. So that's why the fact that we are the first modular open systems architecture platform that's going to be out there for the Army is gonna give it the capability to interact and interface with these other technologies.

Speaker #5: that will also be available on the battlefield. So I see it going to be a key part of the future fight. And look, in terms of threats, I'm not worried about that as much.

Lisa Atherton: I am worried about making sure that we deliver what the war fighter needs on the timeline that they need it, and making sure it fits inside the plans that they have.

Speaker #5: I'm worried about making sure that we deliver what the warfighter needs, on the timeline that they need it, and making sure it fits inside the plans that they have.

Doug Harned: Very good. Thank you.

Speaker #5: Very good. Thank you.

Lisa Atherton: Thanks.

Speaker #10: Thanks.

Operator: This concludes our question and answer session and today's conference call. An audio replay will be available approximately 2 hours following the conclusion of this call. To access the replay, please dial 1-800-770-2030 and enter conference ID 6969175, and press the pound key. Thank you for your participation. You may now disconnect.

Speaker #9: This concludes our question and answer session and today's conference call. An audio replay will be available approximately 2 hours following the conclusion of this call.

Speaker #9: To access the replay, please dial 1-800-770-2030 and enter conference ID 6969175 and press the pound key. Thank you for your participation. You may now disconnect.