Leonardo DRS Announces Financial Results for Third Quarter 2025

• Revenue: $960 million, up 18% year-over-year
• Net Earnings: $72 million, up 26% year-over-year
• Adjusted EBITDA: $117 million, up 17% year-over-year
• Diluted EPS: $0.26, up 24% year-over-year
• Adjusted Diluted EPS: $0.29, up 21% year-over-year
• Bookings: $1.3 billion (book-to-bill ratio of 1.4x)
• Backlog: $8.9 billion, up 8% year-over-year
• Revises 2025 guidance for revenue and Adjusted Diluted EPS
• Dividend: Company declares $0.09 cash dividend per share to be paid on December 2, 2025

ARLINGTON, Va.: Leonardo DRS, Inc. (Nasdaq: DRS), a leading provider of advanced defense technologies, today reported financial results for the third quarter 2025, which ended September 30, 2025.

CEO Commentary

“Broad-based customer demand was evident in our exceptional bookings and organic revenue growth in the third quarter. Our year-to-date performance puts us on a solid path to deliver double-digit revenue growth and to execute against our financial commitments for 2025. We are making steady progress on strengthening Germanium supply and remain focused on disciplined program execution throughout the business,” said Bill Lynn, Chairman and CEO of Leonardo DRS.

Summary Financial Results

The company delivered 18% revenue growth in the third quarter 2025. The impressive year-over-year revenue increase was primarily driven by counter UAS, electric power and propulsion, naval network computing and advanced infrared sensing programs.

Adjusted EBITDA growth was spurred on by increased volume and higher profitability on electric power and propulsion programs, namely Columbia Class. However, Adjusted EBITDA margin declined slightly year-over-year as the tailwinds from higher volume and improved Columbia Class program profitability were offset by increased investment in research and development, less favorable mix and less efficient program execution.

Healthy year-over-year growth was evident across bottom-line metrics (net earnings, Adjusted Net Earnings, diluted EPS and Adjusted Diluted EPS) and primarily propelled by higher operational-driven profitability as well as a marginally lower net interest expense.

Cash Flow

Net cash flow provided by operating activities was $107 million for the third quarter. The company’s free cash flow generation was $77 million in the quarter. Both operating and free cash flow generation were greater than the third quarter 2024 due to higher net profitability and a more favorable working capital position. The strong third quarter cash flow performance builds on a pattern of improved year-over-year linearity.

Dividends, Stock Repurchases and Strategic Activity

During the third quarter, the company paid dividends to shareholders totaling approximately $24 million or $0.09 per common share. DRS today announced that its Board of Directors declared a cash dividend of $0.09 per common share payable on December 2, 2025, to shareholders of record on November 18, 2025. Additionally, the company repurchased 247,558 shares of its common stock for approximately $10 million in the third quarter.

In the third quarter, the company made a $15 million investment in Hoverfly Technologies (“Hoverfly”), which designs, develops and manufactures power-tethered unmanned aerial systems and related products. As a result of this incremental investment, DRS increased its stake in Hoverfly to approximately 25%.

Balance Sheet

At quarter end, the balance sheet had $309 million of cash and $194 million of outstanding borrowings under the company’s credit facility, which provides the company with sufficient financial capacity to deploy capital for growth and return capital to shareholders, while maintaining a healthy balance sheet.

Bookings and Backlog

The company secured $1.3 billion in new funded bookings in the third quarter. Robust customer demand was evident throughout the business but was most prominent for counter UAS, advanced infrared sensing, naval network computing and electric power and propulsion technologies. Total backlog reached a new record and increased year-over-year by 8% to $8.9 billion.

Segment Results

Advanced Sensing and Computing (“ASC”) Segment

Customer demand for the company’s differentiated technology offerings in advanced infrared sensing, naval network computing and airborne sensing bolstered ASC quarterly bookings. Revenue growth in the segment was driven by naval network computing, advanced infrared sensing and tactical radar programs. Quarterly Adjusted EBITDA remained consistent, however, year-over-year margin decreased due to higher internal research and development investment and less favorable program mix.

Integrated Mission Systems (“IMS”) Segment