Leonardo DRS Reports 16.1% Revenue Growth to $799 Million in Q1 2025

Leonardo DRS, Inc. reported a significant increase in financial performance for the first quarter of 2025, with total revenues reaching $799 million, a 16.1% increase from $688 million in the same period last year. The company's net earnings also saw a substantial rise, climbing to $50 million, up 72.4% from $29 million in the prior year. This growth was attributed to a robust backlog and increased demand for the company's defense technology products, particularly in the Advanced Sensing and Computing (ASC) and Integrated Mission Systems (IMS) segments.

The company's operating earnings improved by 37.2%, totaling $59 million compared to $43 million in the first quarter of 2024. The gross profit margin also saw a slight increase, rising to 22.7% from 22.2% year-over-year. General and administrative expenses increased by 15.8% to $117 million, primarily due to higher internal research and development costs and expenses related to new contract pursuits. The effective tax rate decreased to 13.8% from 21.6%, contributing to the overall increase in net earnings.

In terms of operational developments, Leonardo DRS reported a total backlog of $8.612 billion as of March 31, 2025, an increase of 9.8% from $7.845 billion a year earlier. This growth was driven by new awards in various domains, including dismounted soldier, naval, and airborne sensor programs. The company also reported bookings of $991 million for the quarter, a 21.6% increase from $815 million in the same period last year, indicating strong demand for its products and services.

The company continues to focus on strategic initiatives, including a share repurchase program approved in February 2025, allowing for the buyback of up to $75 million of its common stock through March 2027. As of the end of the quarter, Leonardo DRS had repurchased approximately $3 million under this program. The company remains committed to enhancing its operational efficiency and expanding its market presence, particularly in defense technology, which is critical for U.S. national security.

Looking ahead, Leonardo DRS anticipates continued growth driven by its strong backlog and the ongoing demand for advanced defense technologies. However, the company remains cautious about potential impacts from U.S. government budgetary constraints and geopolitical factors that could affect defense spending. The management emphasizes the importance of adapting to changing market conditions and maintaining a diversified portfolio to mitigate risks associated with reliance on government contracts.