Leonardo DRS Reports Strong Q1 Performance

By Chris Stiles • Tuesday, May 05 14:28 • Permanent Link

Leonardo DRS started 2026 with higher sales, stronger profits and a larger backlog, while also lifting its full-year outlook.

First-quarter revenue rose to $846 million from $799 million a year earlier, an increase of 6%. Net earnings climbed to $62 million from $50 million, up 24%. Diluted earnings per share increased to $0.23 from $0.19, a 21% gain.

Profitability improved faster than sales. Adjusted EBITDA rose 28% to $105 million from $82 million, and the margin expanded to 12.4% from 10.3%. Adjusted net earnings increased to $69 million from $54 million, while adjusted diluted EPS moved up 30% to $0.26 from $0.20.

Bookings totaled $885 million, down from $991 million in the prior-year quarter, but still produced a book-to-bill ratio of 1.0x. Funded backlog reached $4.686 billion, up from $4.354 billion a year ago, an 8% increase.

By segment, Advanced Sensing and Computing posted revenue of $559 million, up 9% from $511 million, while operating earnings jumped 60% to $40 million from $25 million. Segment adjusted EBITDA rose 48% to $62 million, and the margin widened to 11.1% from 8.2%. Bookings in the segment fell to $429 million from $669 million, with book-to-bill at 0.8x.

Integrated Mission Systems reported revenue of $295 million, up slightly from $291 million. Operating earnings increased to $37 million from $34 million, and segment adjusted EBITDA rose to $43 million from $40 million. The segment’s bookings surged to $456 million from $322 million, lifting book-to-bill to 1.5x.

Cash used in operating activities narrowed to $66 million from the prior-year period, and free cash outflow improved to $95 million. The company ended the quarter with $328 million in cash and no borrowings under its credit facility.

Leonardo DRS also raised its 2026 guidance. Revenue is now expected to be between $3.9 billion and $3.975 billion, up from a prior range of $3.85 billion to $3.95 billion. Adjusted EBITDA guidance moved higher to $515 million to $530 million from $505 million to $525 million. Adjusted diluted EPS guidance increased to $1.26 to $1.30 from $1.20 to $1.26. Following these announcements, the company's shares moved 2.95%, and are now trading at a price of $41.18. For more information, read the company's full 8-K submission here.

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