US-based defence supplier Leonardo DRS reported robust financial results for the third quarter ended September 30, 2025. Revenue reached $960 million, up 18 per cent year-over-year.
Net earnings increased 26 per cent to $72 million, while adjusted EBITDA grew 17 per cent to $117 million. Diluted EPS rose 24 per cent to $0.26, and adjusted diluted EPS climbed 21 per cent to $0.29.
The company secured bookings of $1.3 billion in the quarter, achieving a book-to-bill ratio of 1.4x. This strong demand was evident across the business, particularly for counter UAS, advanced infrared sensing, naval network computing, and electric power and propulsion technologies. Total backlog reached a new record of $8.9 billion, up eight per cent year-over-year.
Bill Lynn, Chairman and CEO of Leonardo DRS, stated, “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.”
The advanced sensing and computing (ASC) segment reported nine per cent revenue growth to $580 million, driven by naval network computing and advanced infrared sensing programs. Adjusted EBITDA remained flat at $64 million as higher research and development investment and less favourable program mix offset volume gains.
The integrated mission systems (IMS) segment saw 34 per cent revenue growth to $383 million, fueled by strong performance across the segment. IMS adjusted EBITDA surged 47 per cent to $53 million, with margin expansion primarily due to increased volume and improved profitability on electric power and propulsion programs.
Strong cash flow generation continued, with $107 million from operations and $77 million in free cash flow. DRS returned capital to shareholders through $24 million in dividends and $10 million in share repurchases. The company also declared a quarterly dividend of $0.09 per share.
Based on the positive year-to-date performance, Leonardo DRS revised its full-year 2025 guidance.
The company raised the lower end of its revenue guidance to $3.550 billion - $3.600 billion (from $3.525-$3.600 billion) and increased its adjusted diluted EPS guidance to $1.07 - $1.12 (from $1.06-$1.11). Adjusted EBITDA guidance remains unchanged at $437 million - $453 million.
