Leonardo DRS Inc. reported third‑quarter 2025 earnings on October 29, 2025, with revenue of $960 million, up 18% from $812 million in Q3 2024. Adjusted EBITDA rose to $117 million, a 17% increase over $100 million in the same quarter last year, while net earnings climbed 26% to $72 million from $57 million year‑ago.
The company’s adjusted EBITDA margin was 12.2%, slightly below the 12.3% margin reported for Q3 2024. Bookings reached $1.307 billion, a 24% increase, giving a book‑to‑bill ratio of 1.4× and a record backlog of $8.909 billion, up 8% from $8.25 billion in Q3 2024.
Segment performance highlighted the Integrated Mission Systems (IMS) unit, which generated $383 million in revenue and saw adjusted EBITDA surge 47% to $57 million, driven by counter‑UAS and electric power and propulsion programs, including the Columbia Class. The Advanced Sensing and Computing (ASC) segment produced $580 million in revenue with flat adjusted EBITDA of $28 million, reflecting higher R&D spending and a less favorable program mix.
Margin compression was attributed to increased R&D investment, a shift toward lower‑margin programs, and supply‑chain pressures, particularly related to germanium shortages that impacted component costs and execution efficiency. These factors offset the gains from higher volume in the IMS segment.
Leonardo DRS raised its full‑year 2025 revenue guidance to $3.55 billion–$3.60 billion and maintained adjusted EBITDA guidance at $437 million–$453 million, reflecting the strong year‑to‑date performance and robust bookings. The company also kept its adjusted diluted EPS outlook at $1.07–$1.12, incorporating a lower effective tax rate assumption.
Strategically, the company invested $15 million in Hoverfly Technologies, increasing its stake to roughly 25% and securing a manufacturing agreement to expand production of Hoverfly’s Sentry and Spectre drone systems. It also announced a share‑repurchase of 247,558 shares for approximately $10 million and confirmed a quarterly dividend of $0.09 per share payable December 2, 2025. Leadership transition notes that Bill Lynn will retire as Chairman and CEO effective January 1, 2026, with COO John Baylouny named as his successor.
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