paler and L3 Harris announcing a strategic partnership to bring together paler Ai and L3 Harris's Hardware to help the military make better decisions faster improve Communications systems and accelerate L3 Harris's digital transformation so joining me right here at CNBC headquarters on set paler CEO co-founder Alex karp and L3 Harris chair and CEO Chris kubic gentlemen welcome great to have you both here good to be here all right so I got to start with earnings cuz L3 Harris you just also reported earnings uh a beat and a raise you're boosting your margin guide as well how
much of this is a reflection of growing defense demand how much of this is a reflection of the normalization of Supply chains yeah look Mar it was a great uh great quarter this is the fifth consecutive quarter we've exceeded expectations and it really goes back a couple years to the strategy that we've laid out everything we're putting in place is starting to fall together you know when I look at our board we have uh about half the board is new half my leadership team is new we brought all the employees back did away with high
earlier this year so I obviously have to recognize and thank them for a great quarter supply chain is easing our lhx next initiative is working so really everything is coming together nicely we bought two uh made two Acquisitions uh that are aligned with the future of the Warfare and National defense strategy we divested non-core assets so if you're going to be the trusted disruptor you got to have change you got to embrace change we've had a lot of change and um you know it's uh it's exciting but the the Hallmark of the strategy is partnership
so I'm actually more excited to be on stage here with Alex to talk about our partnership then I am a great third quarter so that's how I look at it so let's talk about this partnership Alex you've ined a number of them at Palante here um in recent months even just Microsoft Oracle what does inking a partnership with another defense Prime enable well first of all delighted to be here congratulations on the quarter um you know there's the there's a a lot of reasons to deepen our partnership and expand it but primarily actually Chris you
know he's a real disruptor um he drives Innovation uh inside of his company and um then quite frankly he's better networked and understands the DC environment uh certainly in a way that you know we may never um and so the combination of and then you know what I think our nation needs is the Americans America's Best un ifying around where we have a structural Advantage which is the integration of hardware and software China and Russia are just not as good at software and the integration of both uh allows you to produce more lethal technology so
how do we move from passive defense to we scare the our adversaries every day obviously in a way that they can't replicate and the obvious way you do that is you move to Aid driven targeting uh with ethical uh means that that's going to require software with the most disruptive companies in DC led by you know a quite inspirational leader so you know we want to bring uh Innovation to America commercially also they're a massive commercial company just purely one of the things about L3 is that they're like one of the things that unifies us
is we're not really defense integrators we're commercial companies that are patriotic and so how do we get the best patriotic companies to produce the most lethal technology in the world for America and not for our adversaries and how do we get it to the the dod in ways that are cheaper in ways that the margins are better and it's a great partner so so how do you do that Chris and I I think about I mean you're a defense Prime on a number of programs but you're also a subcontractor on some like Titan which Palante
here is the software Prime and the defense Prime on so so what does this enable from your standpoint how quickly can you develop these new technologies Next Generation capabilities for the war fighter yeah well as you and I have talked about you know the the the arsenal of democracy so you go back to World War II right where the defense industrial base and the government worked collaboratively to build 300,000 airplanes 85,000 tanks and 9,000 ships to win the war the future of warfare and the future uh Arsenal democracy is not more platforms not more planes
ships and tanks it's the convergence of our Leading Edge Hardware software and AI so you mentioned Titan a perfect example I'm happy to Prime sub Merchant supplier they're leading this we're providing all the resilient coms all the communication architecture the communication Hardware there's another program we talk about realtime targeting we have targeting systems think of those as the eyes uh for the warf fighter usually Airborne platforms and we can identify targets we've integrated their AI it it lightens the workload for the war ler it increases the probability of detection and you end up with a
better result so it's all about shortening the killchain and
