Leonardo DRS (DRS) experienced a notable increase of 13.7% in its stock price during early trading, reaching $43.36 following the release of robust earnings for 2025. The company showcased significant growth in revenue and earnings, alongside an expanding backlog that supports a positive outlook for the future.
In its recent report, Leonardo DRS announced a fourth-quarter revenue of $1.1 billion, contributing to a full-year total of $3.6 billion. This reflects a steady annual growth rate of 13%, attributed to the advancement of key programs. The fourth quarter alone saw an 8% rise, indicating broad-based strength across various segments.
Net income for the fourth quarter reached $102 million, with total earnings for the year at $278 million, showcasing improved margins. The earnings increased by 15% in the final quarter, driven by stable operations and effective execution across its platforms. The overall year-end results indicated a 31% increase, underscoring the ongoing demand for the company”s offerings.
Adjusted EBITDA was reported at $158 million for the fourth quarter and $453 million for the entire year, reflecting strong core business activity. Margins remained consistent as programs progressed across advanced sensing and mission systems, and performance was in line with expectations, thanks to disciplined operational management.
During the fourth quarter, Leonardo DRS secured orders amounting to $1.1 billion, bringing the full-year total to $4.2 billion. The full-year book-to-bill ratio settled at 1.2x, indicating sustained traction across defense platforms. This order activity bolstered long-term visibility for critical capabilities.
The backlog saw a 3% increase, reaching $8.7 billion, as core programs continued to attract demand. This growth in backlog reflects consistent customer commitments, even amidst evolving global requirements, thereby strengthening strategic planning for future development cycles.
Notably, two non-routine items influenced the reported results, including a quantum laser intellectual property license agreement that contributed $73 million to revenue and adjusted EBITDA. Conversely, the conclusion of a legacy surveillance program adversely affected results, impacting revenue by $67 million and EBITDA by $65 million.
Looking ahead, Leonardo DRS provided a robust outlook for 2026, anticipating demand growth across integrated and sensing technologies. The company highlighted its platform-agnostic strategy, which is crucial as programs advance through production and modernization phases. This guidance reflects the company”s commitment to expansion as new opportunities develop.
Company leadership pointed to a diversified technology portfolio that aligns with changing defense priorities globally. Continued investments in critical systems aim to support rapid deployment and operational readiness. The strategic execution outlined positions Leonardo DRS for a strong year ahead as customer requirements evolve across advanced domains. The sharp increase in stock price during early trading underscores the market”s confidence in the company”s updated outlook.
