On Wednesday, Leonardo DRS, Inc. (NASDAQ:DRS) announced second-quarter results that outperformed analyst predictions, reporting adjusted earnings per share of $0.23 compared to the consensus estimate of $0.21, alongside revenue of $829 million, slightly above the anticipated $827.46 million.
The defense technology company posted a 10% year-over-year increase in revenue for the quarter ending June 30, 2025, driven mainly by growth in electric power and propulsion projects, advanced infrared sensing, and ground network computing initiatives. Net income soared 42% to $54 million, while adjusted EBITDA climbed 17% to $96 million, with margins expanding to 11.6% from 10.9% a year earlier.
Despite these strong results and an upward revision to its full-year 2025 guidance, Leonardo DRS shares fell 1.9% in pre-market trading. The company now anticipates revenue between $3.525 billion and $3.6 billion, an increase from its prior range of $3.425 billion to $3.525 billion. Adjusted diluted EPS guidance was also raised to $1.06-$1.11 from $1.02-$1.08.
“Leonardo DRS delivered another set of strong financial results marked by healthy bookings, solid organic revenue growth and continued profit and margin expansion in the second quarter,” said Bill Lynn, Chairman and CEO. “The need to deter and contest heightened global threats continues to bolster customer demand for our innovative, high-performance technologies.”
The company secured $853 million in new funded bookings during the quarter, maintaining a book-to-bill ratio of 1.0x. Its total backlog increased 9% year-over-year to $8.6 billion. Additionally, Leonardo DRS declared a quarterly cash dividend of $0.09 per share, payable on September 3, 2025.
Both key business segments experienced growth, with Advanced Sensing and Computing revenues rising 10% to $542 million and Integrated Mission Systems revenues growing 9% to $290 million. The latter segment saw a notable margin boost, with adjusted EBITDA margin improving by 290 basis points to 13.1%.
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