Leonardo DRS raises 2026 outlook as defense backlog and margins strengthen
Third-quarter revenue rose 11% year over year, while adjusted EBITDA grew 27%; the company also reported a record funded backlog and higher full-year guidance.
Leonardo DRS reported third-quarter 2026 revenue of $1.066 billion, up 11% from $960 million a year earlier. Net earnings rose to $115 million from $72 million, and diluted earnings per share increased to $0.43 from $0.26.
The operating improvement was visible in margins: operating earnings increased to $116 million from $93 million. Adjusted EBITDA reached $149 million, according to the company’s results release, while third-quarter bookings were approximately $1.6 billion and book-to-bill was 1.5 times.
Leonardo DRS raised its 2026 outlook to revenue of $3.950 billion–$3.985 billion, adjusted EBITDA of $545 million–$555 million and adjusted diluted EPS of $1.50–$1.53. The revised ranges were previously $3.900 billion–$3.975 billion, $525 million–$540 million and $1.34–$1.39, respectively. The guidance excludes the proposed acquisition of Raft.
Cash generation remains an important qualification. For the nine months ended September 30, operating cash flow was $65 million, compared with an operating cash outflow of $59 million in the prior-year period. Capital expenditure was $97 million, while cash and equivalents ended the period at $294 million versus $647 million at year-end 2025, after financing outflows and debt repayments.
Q3 revenue
$1.066B
↑ +11% year over year
Net earnings
$115M
↑ +60% year over year
Adjusted EBITDA
$149M
↑ +27% year over year
Funded backlog
$5.6B
record level
Sources
Quarterly revenue, Leonardo DRS, Inc.
Margins by quarter
Twelve quarters of figures
| Quarter | Q4 '23 | Q1 '24 | Q2 '24 | Q3 '24 | Q4 '24 | Q1 '25 | Q2 '25 | Q3 '25 | Q4 '25 | Q1 '26 | Q2 '26 | Q3 '26 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $926M | $688M | $753M | $812M | $981M | $799M | $829M | $960M | $1.1B | $846M | $913M | $1.1B |
| Revenue growth | — | — | — | — | 5.9% | 16.1% | 10.1% | 18.2% | 8.1% | 5.9% | 10.1% | 11.0% |
| Gross margin | 22.7% | 22.2% | 22.4% | 22.0% | 24.0% | 22.7% | 23.8% | 23.1% | 25.4% | 25.1% | 26.0% | 24.7% |
| Operating margin | 11.3% | 6.3% | 7.3% | 9.2% | 12.2% | 7.4% | 8.4% | 9.7% | 11.9% | 9.1% | 11.2% | 10.9% |
| Net income | $74.0M | $29.0M | $38.0M | $57.0M | $89.0M | $50.0M | $54.0M | $72.0M | $102M | $62.0M | $86.0M | $115M |
| Diluted EPS | $0.28 | $0.11 | $0.14 | $0.21 | $0.34 | $0.19 | $0.20 | $0.26 | $0.38 | $0.23 | $0.32 | $0.43 |
| Cash from operations | $515M | −$265M | $34.0M | $59.0M | $443M | −$138M | −$28.0M | $107M | $425M | −$66.0M | $35.0M | $96.0M |
| Capital expenditure | $18.0M | $10.0M | $34.0M | $12.0M | $29.0M | $32.0M | $28.0M | $30.0M | $49.0M | $30.0M | $29.0M | $38.0M |
| Free cash flow | $497M | −$275M | $0.0M | $47.0M | $414M | −$170M | −$56.0M | $77.0M | $376M | −$96.0M | $6.0M | $58.0M |
| Dividends and buybacks | $0.0M | $0.0M | $0.0M | $0.0M | $0.0M | $3.0M | $11.0M | $10.0M | $11.0M | $4.0M | $12.0M | $12.0M |
This story describes figures the company has published. It is for information only and is not investment advice or a recommendation to buy, sell or hold any security. Check the original filings before relying on any figure. Stoqly is not affiliated with the SEC or Leonardo DRS, Inc..
