TLDR
- Leonardo DRS surges 13.7% on strong 2025 earnings growth
- Revenue up 13% as Leonardo DRS backlog hits $8.7B
- Book-to-bill at 1.2x signals steady defense demand
- Adjusted EBITDA climbs to $453M in solid 2025 finish
- Strong 2026 outlook fuels sharp rally in DRS shares
Leonardo DRS (DRS) shares rose sharply in early trading as the stock jumped 13.70% to $43.36 after releasing strong 2025 results. The company posted higher revenue, stronger earnings, and a growing backlog that supported a firm outlook. The update signaled continued momentum across major programs as demand remained stable.
Solid Revenue Momentum in 2025
Leonardo DRS reported fourth-quarter revenue of $1.1 billion and full-year revenue of $3.6 billion, which marked steady growth. The company expanded annual revenue by 13 percent as major programs advanced through key stages. he fourth quarter delivered an 8 percent rise that reflected broad strength across segments.
Net earnings reached $102 million in the fourth quarter and $278 million for the full year as margins improved. Earnings rose 15 percent in the quarter due to stable operations and strong execution across platforms. The year ended with a 31 percent gain that reinforced expanding demand.
Adjusted EBITDA reached $158 million in the fourth quarter and $453 million for the year as core activity remained strong. The margin held near prior levels as programs progressed across advanced sensing and mission systems. Moreover, performance aligned with expectations as the company maintained discipline across operations.
Order Strength and Backlog Expansion
Leonardo DRS booked $1.1 billion in the fourth quarter and $4.2 billion for the full year as order flow improved. The full-year book-to-bill ratio reached 1.2x, which reflected continued traction across defense platforms. Contract activity supported long-term visibility across major capabilities.
Backlog increased 3 percent to $8.7 billion as core programs secured additional demand. The rise signaled consistent customer commitments despite shifting global requirements. The updated backlog strengthened planning for upcoming development cycles.
Two non-routine items affected reported results, including a quantum laser IP license agreement and a legacy surveillance program conclusion. The license agreement added $73 million to revenue and Adjusted EBITDA during 2025. The surveillance program offset results with a $67 million revenue impact and a $65 million EBITDA effect.
2026 Outlook and Strategic Direction
Leonardo DRS issued strong 2026 guidance as it expected demand growth across integrated and sensing technologies. The company emphasized its platform-agnostic approach as programs advanced through production and modernization phases. The update highlighted sustained expansion as new opportunities entered the pipeline.
Leadership pointed to a diversified technology portfolio that aligned with evolving defense priorities worldwide. The company continued investing in critical systems that supported rapid fielding and operational readiness. Strategic execution aimed to strengthen performance as new programs matured.
The update positioned Leonardo DRS for another year of growth as customer needs expanded across advanced domains. The company maintained a disciplined path as it executed on major contracts. The early trading surge reflected strong confidence in the updated outlook.
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