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Visual21 Nov 2025
Data center suppliers
Leonardo DRS (DRS) investor relations material
Leonardo DRS Q3 2025 earnings summary
Complete event summary combining all related documents: earnings call transcript, report, and slide presentation.Q3 2025 earnings summary29 Oct, 2025
Executive summary
Q3 2025 revenue rose 18% year-over-year to $960 million, with net earnings up 26% to $72 million and diluted EPS at $0.26, driven by strong demand in counter-UAS, electric power/propulsion, and advanced sensing programs.
Bookings reached $1.3 billion, resulting in a 1.4x book-to-bill ratio and record backlog of $8.9 billion, up 8% year-over-year.
CEO transition: John Baylouny to succeed William Lynn as CEO effective January 1, 2026; Fran Townsend elected as new Chair.
Strategic focus on innovation with increased R&D investment, launch of SAGEcore platform, and leadership in counter-UAS and maritime technologies.
Company remains highly dependent on U.S. government contracts, with 81% of revenue from the DoD.
Financial highlights
Adjusted EBITDA for Q3 was $117 million, up 17% year-over-year, with margin at 12.2%, down 10 bps due to higher R&D and less favorable mix.
Net earnings for Q3 were $72 million (up 26%); adjusted net earnings $78 million (up 22%); adjusted diluted EPS $0.29 (up 21%).
Free cash flow for Q3 was $77 million, significantly higher year-over-year; net cash from operating activities was $107 million.
Gross margin improved by 110 bps to 23.1% for Q3; operating earnings rose 24% to $93 million.
Cash and cash equivalents were $309 million at September 30, 2025, with $194 million in outstanding borrowings.
Outlook and guidance
2025 revenue guidance raised to $3.55–$3.6 billion, implying 10–11% growth; adjusted EBITDA guidance at $437–$453 million.
Adjusted diluted EPS guidance increased to $1.07–$1.12, with a lower effective tax rate of 18%.
Free cash flow conversion targeted at ~80% of adjusted net earnings.
Q4 expected to contribute significantly to full-year results, though growth may step down from first nine months.
International sales expected to provide future growth opportunities despite a current year decrease.
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Next Leonardo DRS earnings date
Q4 202520 Feb, 2026
Next Leonardo DRS earnings date
Q4 202520 Feb, 2026
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Frequently asked questions
Leonardo DRS Inc., formerly known as DRS Technologies, Inc., is a U.S.-based defense contractor specializing in providing advanced defense products and technologies. The company's extensive portfolio includes advanced sensing, network computing, force protection, and electrical power conversion and propulsion technologies. Leonardo DRS operates through two primary technology-driven segments: Advanced Sensing and Computing, which focuses on equipment for real-time battlefield information processing, and Integrated Mission Systems, dedicated to critical force protection and vehicle integration among other systems. The company, a subsidiary of the Italian aerospace, defense, and security firm Leonardo S.p.A., underscores its role as a prime contractor and technology innovator in the defense sector, serving military forces, intelligence agencies, and defense contractors globally. The company is headquartered in Arlington, Virginia, and its shares are listed on the Nasdaq.
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