Leonardo DRS Inc
NASDAQ:DRS
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Leonardo DRS Inc
Leonardo DRS Inc. operates at the nexus of technology and defense, crafting a narrative of innovation and tactical prowess. Rooted in a legacy that intertwines with advanced defense systems and solutions, the company serves as a critical asset to the United States military and allied forces worldwide. Leonardo DRS specializes in developing and integrating cutting-edge systems across multiple domains, including aerospace, land, sea, space, and cyberspace. Their offerings span from intelligence and electronic warfare systems to power and propulsion technologies, providing the technological backbone that supports modern military operations. Through a strategic blend of research, development, and partnership with defense agencies, Leonardo DRS continually adapts its capabilities to meet evolving security needs.
The revenue streams of Leonardo DRS are predominantly derived from government contracts, particularly those with the Department of Defense, where long-term relationships underpin the consistent flow of business. The company thrives on its ability to innovate and deliver tailor-made solutions, which not only meet the stringent regulatory requirements of defense procurements but also anticipate future battlefield needs. By leveraging its sophisticated supply chain management and technological expertise, Leonardo DRS enhances operational efficiency and drives profitability. Furthermore, its investments in research and development ensure that it stays at the forefront of defense technology, securing a competitive edge in an industry where cutting-edge innovation is paramount to success.
Leonardo DRS Inc. operates at the nexus of technology and defense, crafting a narrative of innovation and tactical prowess. Rooted in a legacy that intertwines with advanced defense systems and solutions, the company serves as a critical asset to the United States military and allied forces worldwide. Leonardo DRS specializes in developing and integrating cutting-edge systems across multiple domains, including aerospace, land, sea, space, and cyberspace. Their offerings span from intelligence and electronic warfare systems to power and propulsion technologies, providing the technological backbone that supports modern military operations. Through a strategic blend of research, development, and partnership with defense agencies, Leonardo DRS continually adapts its capabilities to meet evolving security needs.
The revenue streams of Leonardo DRS are predominantly derived from government contracts, particularly those with the Department of Defense, where long-term relationships underpin the consistent flow of business. The company thrives on its ability to innovate and deliver tailor-made solutions, which not only meet the stringent regulatory requirements of defense procurements but also anticipate future battlefield needs. By leveraging its sophisticated supply chain management and technological expertise, Leonardo DRS enhances operational efficiency and drives profitability. Furthermore, its investments in research and development ensure that it stays at the forefront of defense technology, securing a competitive edge in an industry where cutting-edge innovation is paramount to success.
Strong Bookings & Backlog: Leonardo DRS reported $1.3 billion in bookings for Q3, resulting in a 1.4 book-to-bill ratio and a record total backlog of $8.9 billion, up 8% year-over-year.
Revenue Growth: Quarterly revenue grew 18% year-over-year to $960 million, with the company raising full-year revenue growth guidance to 10–11%.
Profit Performance: Adjusted EBITDA was $117 million (up 17%), and adjusted diluted EPS rose 21% to $0.29, driven by operational growth and lower interest expense.
Cash Flow Strength: Free cash flow reached $77 million for the quarter, significantly above prior year levels due to improved collections and working capital efficiency.
Elevated R&D Investment: Margins were slightly lower due to increased internal research & development, which management expects to continue as a percentage of revenue.
CEO Transition: Bill Lynn will retire as Chairman and CEO on January 1, with current COO John Baylouny named as the new CEO.
Germanium Supply Actions: The company is actively recycling germanium and diversifying suppliers to resolve material constraints by 2026.
Guidance Update: Full-year revenue guidance was raised, adjusted EBITDA and free cash flow conversion targets maintained, and EPS guidance increased slightly.
