olivLaw · US equity research
Leonardo DRS, Inc. DRS
Search, Detection, Navigation, Guidance, Aeronautical Sys · SIC 3812 · Vertical: Search, Detection, Navigation, Guidance, Aeronautical Sys (SIC 3812)
Leonardo DRS supplies defense technology to U.S. national security customers and allied forces, mainly advanced sensors, network computing, force protection and naval electric propulsion. Revenue rose 10% in the second quarter of 2026 to $913 million, and the company raised its 2026 guidance, which makes the U.S. defense budget a central factor to follow.
The AI analysis may be outdated: new filings came after its sources (see the «AI analysis» section).
At the close of 04 Nov 2026, Leonardo DRS, Inc. (DRS) stock was 35.52 USD (−8.59% on the day), with market capitalisation 9.5 bn USD, P/E 26.1 on diluted EPS of 1.36 USD over the last 12 months, dividend yield 1.01%, beta 1.02, 52-week range 32.55–49.69 USD. Latest reported quarter (Q3 2026): revenue of 1.1 bn USD (+11.0% YoY), net income of 115.0 m USD (+59.7% YoY), diluted EPS 0.43 USD.
Data as of · AI analysis dated · Source: SEC filings and closing prices, computed by olivLaw.
Price history
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Technical reading
- RSI (14)
- 46.5
- neutral
- Bollinger (20, 2)
- 32.93 – 38.72
- in the lower half of the band · %B 0.45 · band width 16.2%
- SMA 50 / 200
- 36.57 / 42.09
- downtrend (price < SMA50 < SMA200)
- MACD (12, 26, 9)
- 0.09 / -0.24
- MACD above signal
Indicators describe past prices; on their own they do not predict direction. On our history the RSI ≤ 40 filter added no return (see the signals methodology).
Performance
| Company | S&P 500 | vs S&P 500 | Vertical median | |
|---|---|---|---|---|
| 1 month | −3.0% | −1.1% | −1.9 pp | — |
| 3 months | −20.4% | −0.5% | −19.9 pp | — |
| 6 months | −15.0% | +4.4% | −19.4 pp | — |
| Year to date | +4.2% | +12.3% | −8.1 pp | — |
| 1 year | −1.7% | +13.5% | −15.3 pp | −2.2% |
| 3 years | +77.2% | +76.4% | +0.8 pp | +54.2% |
| 5 years | +236.4% | +63.7% | +172.7 pp | — |
Price returns, dividends excluded.
Quarterly results
Latest quarter: Q3 2026 · 30 Sept 2026
Quarterly margins
Quarterly statements · USD
| Fiscal year | Q4 '24 | Q1 '25 | Q2 '25 | Q3 '25 | Q4 '25 | Q1 '26 | Q2 '26 | Q3 '26 |
|---|---|---|---|---|---|---|---|---|
| Revenue | 981.0 m | 799.0 m | 829.0 m | 960.0 m | 1.1 bn | 846.0 m | 913.0 m | 1.1 bn |
| Cost of revenue | 746.0 m | 618.0 m | 632.0 m | 738.0 m | 791.0 m | 634.0 m | 676.0 m | 803.0 m |
| Gross profit | 235.0 m | 181.0 m | 197.0 m | 222.0 m | 269.0 m | 212.0 m | 237.0 m | 263.0 m |
| Research & development | 28.0 m | 28.0 m | 30.0 m | 36.0 m | 35.0 m | 31.0 m | 36.0 m | 37.0 m |
| Operating income | 120.0 m | 59.0 m | 70.0 m | 93.0 m | 126.0 m | 77.0 m | 102.0 m | 116.0 m |
| Depreciation & amortisation | 23.0 m | 23.0 m | 23.0 m ≈ | 23.0 m ≈ | 24.0 m | 24.0 m | 26.0 m ≈ | 27.0 m ≈ |
| Interest expense | 4.0 m | 1.0 m | — | — | — | — | — | — |
| Pre-tax income | 111.0 m | 58.0 m | 67.0 m | 87.0 m | 124.0 m | 77.0 m | 100.0 m | 116.0 m |
| Income tax | 22.0 m | 8.0 m | 13.0 m | 15.0 m | 22.0 m | 15.0 m | 14.0 m | 1.0 m |
| Net income | 89.0 m | 50.0 m | 54.0 m | 72.0 m | 102.0 m | 62.0 m | 86.0 m | 115.0 m |
| Diluted EPS | 0.33 ≈ | 0.19 | 0.20 | 0.26 | 0.38 ≈ | 0.23 | 0.32 | 0.43 |
| Operating cash flow | 443.0 m | -138.0 m | -28.0 m ≈ | 107.0 m ≈ | 425.0 m | -66.0 m | 35.0 m ≈ | 96.0 m ≈ |
| Capex | 29.0 m | 32.0 m | 28.0 m ≈ | 30.0 m ≈ | 49.0 m | 30.0 m | 29.0 m ≈ | 38.0 m ≈ |
| Share repurchases | 0 | 3.0 m | 11.0 m ≈ | 10.0 m ≈ | 11.0 m | 4.0 m | 12.0 m ≈ | 12.0 m ≈ |
≈ derived quarter (cumulative difference / share-days average)
E/P over time
E/P = trailing-12-month diluted EPS / price at quarter end. E/P is the inverse of P/E and stays defined when earnings are negative.
Today's P/E sits at the 25 percentile of its own 16-quarter history (min 6.7, median 34.5, max 49.9; quarters with earnings only).
Fiscal years
| Fiscal year | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|
| Revenue | 2.7 bn | 2.8 bn | 2.9 bn | 2.7 bn | 2.8 bn | 3.2 bn | 3.6 bn |
| Revenue YoY | unavailable | +2.4% | +3.6% | −6.5% | +4.9% | +14.4% | +12.8% |
| Net income | 75.0 m | 85.0 m | 154.0 m | 405.0 m | 168.0 m | 213.0 m | 278.0 m |
| Net income YoY | unavailable | +13.3% | +81.2% | +163.0% | −58.5% | +26.8% | +30.5% |
| Diluted EPS | 0.52 | 0.40 | 0.73 | 1.88 | 0.64 | 0.80 | 1.03 |
| Diluted EPS YoY | unavailable | −23.1% | +82.5% | +157.5% | −66.0% | +25.0% | +28.7% |
| net % | 2.8% | 3.1% | 5.3% | 15.0% | 5.9% | 6.6% | 7.6% |
| Free cash flow | 102.0 m | 69.0 m | 118.0 m | -32.0 m | 145.0 m | 186.0 m | 227.0 m |
Reported results vs expectations
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Balance sheet & financial health
Fiscal year 2025 · 31 Dec 2025
- Cash
- 647.0 m USD
- Financial debt
- 374.0 m USD
- Net debt
- -273.0 m USD
- Equity
- 2.7 bn USD
- Total assets
- 4.5 bn USD
- Debt / equity
- 0.14x
- Current ratio
- 1.89x
- ROE
- 10.5%
- ROA
- 6.4%
- FCF margin
- 6.2%
Financial statements (source on every figure)
Revenue and net income (USD)
Margins
Income statement · USD
| Line | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Revenue | 2.8 bn | 2.9 bn | 2.7 bn | 2.8 bn | 3.2 bn | 3.6 bn | SEC (XBRL)· 27 Feb 2026verified |
| Cost of revenue | 2.3 bn | 2.3 bn | 2.1 bn | 2.2 bn | 2.5 bn | 2.8 bn | SEC (XBRL)· 27 Feb 2026verified |
| Gross profit | 494.0 m | 547.0 m | 575.0 m | 648.0 m | 736.0 m | 869.0 m | SEC (XBRL)· 27 Feb 2026verified |
| Research & development | 41.0 m | 48.0 m | 58.0 m | 82.0 m | 92.0 m | 129.0 m | SEC (XBRL)· 27 Feb 2026verified |
| Operating income | 181.0 m | 236.0 m | 561.0 m | 231.0 m | 293.0 m | 348.0 m | SEC (XBRL)· 27 Feb 2026verified |
| Depreciation & amortisation | 53.0 m | 58.0 m | 65.0 m | 85.0 m | 91.0 m | 93.0 m | SEC (XBRL)· 27 Feb 2026verified |
| EBITDA | 234.0 m ≈ | 294.0 m ≈ | 626.0 m ≈ | 316.0 m ≈ | 384.0 m ≈ | 441.0 m ≈ | SEC (XBRL)· 27 Feb 2026derived |
| Interest expense | 64.0 m | 35.0 m | 34.0 m | 36.0 m | 21.0 m | — | SEC (XBRL)· 03 Mar 2025verified |
| Pre-tax income | 112.0 m | 200.0 m | 525.0 m | 192.0 m | 264.0 m | 336.0 m | SEC (XBRL)· 27 Feb 2026verified |
| Income tax | 27.0 m | 46.0 m | 120.0 m | 24.0 m | 51.0 m | 58.0 m | SEC (XBRL)· 27 Feb 2026verified |
| Net income | 85.0 m | 154.0 m | 405.0 m | 168.0 m | 213.0 m | 278.0 m | SEC (XBRL)· 27 Feb 2026verified |
| Diluted EPS | 0.40 | 0.73 | 1.88 | 0.64 | 0.80 | 1.03 | SEC (XBRL)· 27 Feb 2026verified |
| Weighted average diluted shares | 210.0 m | 210.0 m | 215.1 m | 264.2 m | 267.7 m | 268.7 m | SEC (XBRL)· 27 Feb 2026verified |
| Dividend per share | — | — | — | — | — | 0.36 | SEC (XBRL)· 27 Feb 2026verified |
≈ computed by olivLaw from the reported lines of the same year: Operating income + Depreciation & amortisation.
Balance sheet · USD
| Line | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Cash | 61.0 m | 240.0 m | 306.0 m | 467.0 m | 598.0 m | 647.0 m | SEC (XBRL)· 27 Feb 2026verified |
| Receivables | 102.0 m | 156.0 m | 166.0 m | 151.0 m | 253.0 m | 334.0 m | SEC (XBRL)· 27 Feb 2026verified |
| Inventories | 247.0 m | 205.0 m | 319.0 m | 329.0 m | 358.0 m | 352.0 m | SEC (XBRL)· 27 Feb 2026verified |
| Current assets | 1.3 bn | 1.4 bn | 1.7 bn | 1.9 bn | 2.2 bn | 2.3 bn | SEC (XBRL)· 27 Feb 2026verified |
| Goodwill | 1.1 bn | 1.1 bn | 1.2 bn | 1.2 bn | 1.2 bn | 1.2 bn | SEC (XBRL)· 27 Feb 2026verified |
| Intangibles (excl. goodwill) | 60.0 m | 52.0 m | 172.0 m | 151.0 m | 132.0 m | 112.0 m | SEC (XBRL)· 27 Feb 2026verified |
| Total assets | 3.0 bn | 3.1 bn | 3.7 bn | 3.9 bn | 4.2 bn | 4.5 bn | SEC (XBRL)· 27 Feb 2026verified |
| Accounts payable | 478.0 m | 479.0 m | 457.0 m | 398.0 m | 426.0 m | 351.0 m | SEC (XBRL)· 27 Feb 2026verified |
| Short-term debt | 53.0 m | 41.0 m | 29.0 m | 57.0 m | 25.0 m | 26.0 m | SEC (XBRL)· 27 Feb 2026verified |
| Long-term debt | — | 393.0 m | 396.0 m | 407.0 m | 366.0 m | 348.0 m | SEC (XBRL)· 27 Feb 2026verified |
| Current liabilities | 975.0 m | 989.0 m | 1.0 bn | 1.1 bn | 1.1 bn | 1.2 bn | SEC (XBRL)· 27 Feb 2026verified |
| Equity | 1.4 bn † | 1.6 bn † | 2.1 bn † | 2.3 bn † | 2.6 bn † | 2.7 bn † | SEC (XBRL)· 27 Feb 2026verified |
† equity attributable to the parent's shareholders: in these years the issuer no longer reports the total including non-controlling interests.
Cash flow · USD
| Line | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Operating cash flow | 125.0 m | 178.0 m | 33.0 m | 205.0 m | 271.0 m | 366.0 m | SEC (XBRL)· 27 Feb 2026verified |
| Capex | 56.0 m | 60.0 m | 65.0 m | 60.0 m | 85.0 m | 139.0 m | SEC (XBRL)· 27 Feb 2026verified |
| Free cash flow | 69.0 m ≈ | 118.0 m ≈ | -32.0 m ≈ | 145.0 m ≈ | 186.0 m ≈ | 227.0 m ≈ | SEC (XBRL)· 27 Feb 2026derived |
| Investing cash flow | -70.0 m | 39.0 m | 436.0 m | -59.0 m | -84.0 m | -154.0 m | SEC (XBRL)· 27 Feb 2026verified |
| Financing cash flow | -80.0 m | -38.0 m | -403.0 m | 15.0 m | -56.0 m | -163.0 m | SEC (XBRL)· 27 Feb 2026verified |
| Dividends paid | 0 | 0 | 396.0 m | 0 | 0 | — | SEC (XBRL)· 03 Mar 2025verified |
| Share repurchases | — | — | — | 0 | 0 | 35.0 m | SEC (XBRL)· 27 Feb 2026verified |
≈ computed by olivLaw from the reported lines of the same year: Operating cash flow − Capex.
Computed indicators
Growth
Profitability
Returns
Balance sheet
Liquidity
Cash
Efficiency
Market and valuation
1 indicators that do not apply to the sector.
Valuation
olivLaw classification
Score: 55 / 100
A scoring methodology on indicators and valuation, not investment advice.
Closing price
04 Nov 2026Source: olivLaw, closing series
Market cap: 9.5 bn USD
Key indicators
Coverage and freshness
Score by group
- Balance sheet97
- Valuation27
- Quality84
- Growth44
- Returns6
Estimated value range
The combined range = the median of the valid methods' low, central and high values; it is not a probability interval and does not cover every result. Envelope of all methods: 4.73 – 37.74 USD.
Valuation assumptions are editorial choices, not measured; beta is not measured.
Method ranges (USD per share)
— — Mid · ▏ Price
Valuation methods
- DCF (discounted cash flow)unavailable · the reported interest expense is far older than the latest period (the filer changed its XBRL tag): a stale figure is not used
- Peers: EV/EBITDA25.18 – 32.94 (Mid 28.48)3 companies used · median multiple 14.0x · quartiles 12.3x – 16.3xLHX, NOC, TDY
- Peers: P/E27.65 – 37.74 (Mid 32.92)5 companies used · median multiple 24.2x · quartiles 20.3x – 27.8xCODA, GRMN, LHX, NOC, TDY
- Dividend discount (DDM)4.73 – 6.36 (Mid 5.43)
Classification (SIC) comparables group by industry code, not by economic activity; the direct group is an editorial selection by activity. Members' multiples are on their own trailing twelve months, at their own latest close.
Assumptions (illustrative, editorial)
- Risk-free rate
- 4.3%
- Equity risk premium
- 5.0%
- Beta (default)
- 1.00
- Cost of equity
- 9.3%
- Terminal growth
- 2.5%
Factor scorecard
Neutral profile · Score 55/100
| Factor | Value | Score | Weight used |
|---|---|---|---|
| ROIC · Quality | 14.8% | 99 (on a fixed band) | 12% |
| Net margin · Quality | 9.4% | 50 (vs peers) | 7% |
| FCF conversion · Quality | 94.2% | 92 (on a fixed band) | 7% |
| Revenue CAGR 3Y · Growth | 10.6% | 89 (on a fixed band) | 9% |
| EPS CAGR 3Y · Growth | -18.2% | 0 (on a fixed band) | 9% |
| Net debt / EBITDA · Balance sheet | -0.5x | 100 (on a fixed band) | 12% |
| Interest coverage · Balance sheet | unavailable | unavailable | — |
| Current ratio · Balance sheet | 1.9x | 90 (on a fixed band) | 5% |
| P/E (TTM) · Valuation | 26.1x | 40 (vs peers) | 12% |
| EV/EBITDA · Valuation | 17.6x | 0 (on a fixed band) | 12% |
| FCF yield · Valuation | 3.6% | 45 (on a fixed band) | 9% |
| Shareholder yield (distributions) · Returns | 0.4% | 6 (on a fixed band) | 7% |
| Payout ratio (FCF) · Returns | unavailable | unavailable | — |
Factors without a value were dropped; the remaining weights were renormalised.
Score groups
- Balance sheet97/100 · 2/3 factors with a value
- Growth44/100 · 2/2 factors with a value
- Quality84/100 · 3/3 factors with a value
- Returns· partial6/100 · 1/2 factors with a value
- Valuation27/100 · 3/3 factors with a value
A «partial» group is computed from under half of its weight or from one factor: it is not a full assessment of the group.
Memo
Leonardo DRS, Inc. (DRS). Latest full fiscal year: 2025; data up to 2026-09-30.
Figures computed from the financial statements: revenue 3.6 bn USD in 2025; YoY growth 12.8%; net margin 9.4%; ROE 13.2%; net debt/EBITDA -0.5x.
The estimated value range is 25.18–32.94 USD per share (median of 3 methods, agreement: medium); assumptions are illustrative. Against the central value of 28.48 USD, the price of 35.52 USD leaves a potential of -19.8% (value / price − 1) and a margin of safety of -24.7% (1 − price / value). The range is the median of the methods' low, central and high values, not a probability interval.
olivLaw score 55/100, methodological classification: neutral profile (score, margin of safety and method agreement together; not a judgement of the right price). Groups assessed only in part: returns. Not investment advice.
Text generated deterministically from the figures shown; no language model. Not investment advice.
What supports the thesis
- ROIC: 14.8%
- FCF conversion: 94.2%
- Revenue CAGR 3Y: 10.6%
- Net debt / EBITDA: -0.5x
- Current ratio: 1.9x
What contradicts it
- EPS CAGR 3Y: -18.2%
- EV/EBITDA: 17.6x
- Shareholder yield (distributions): 0.4%
- The price is above the estimated value range
Not assessed (insufficient data or a ratio without meaning): Interest coverage, Payout ratio (FCF).
Versus the vertical median
Search, Detection, Navigation, Guidance, Aeronautical Sys (SIC 3812) · same industry (4-digit SIC) · compared with 8 companies
Multiples and returns vs the median
Price rebased to 100 (monthly, 5 years)
Companies in the vertical
| Market cap | P/E | ROE | Net margin | Revenue YoY | 1A / 3A | |
|---|---|---|---|---|---|---|
| NOCNorthrop Grumman Corp | 74.6 bn | 16.6 | 26.1% | 10.4% | +2.2% | −8% / +11% |
| GRMNGarmin Ltd | 55.7 bn | 27.8 | 22.4% | 25.6% | +15.1% | +48% / +137% |
| LHXL3harris Technologies, Inc. | 48.4 bn | 24.2 | 10.3% | 5.2% | unavailable | −7% / +36% |
| TDYTeledyne Technologies Inc | 29.1 bn | 28.9 | 9.5% | 15.8% | +7.9% | +27% / +57% |
| DRSLeonardo DRS, Inc. | 9.5 bn | 26.1 | 13.2% | 9.4% | +12.8% | −2% / +77% |
| NNNextNav Inc. | 1.5 bn | — | -77.9% | -2,812.5% | −19.3% | −38% / +121% |
| LUNRIntuitive Machines, Inc. | 835.8 m | — | — | -26.6% | −7.9% | +5% / +248% |
| CODACoda Octopus Group, Inc. | 101.4 m | 20.3 | 8.4% | 17.6% | +30.7% | +2% / +52% |
| MINDMind Technology, Inc | 33.6 m | — | -6.8% | -6.8% | −12.6% | −61% / −29% |
1- and 3-year price returns: for DRS from daily closes (the same as the performance table), for the other companies from month-end closes.
olivLaw engine forecast
The world engine ran after the company's latest material disclosure. Probabilities are of TOUCHING a level within the horizon (not closing there) and sit next to the random walk (p_rw), the no-information benchmark.
The engine has no published run for this company yet.
Valuation scenarios (editable assumptions)
Illustrative scenarios
Illustrative: not forecasts and without probabilities. Each case is one coherent set of assumptions, computed on today's figures.
Estimated price (USD)
| Estimated price | Bear | Base | Bull |
|---|---|---|---|
| 1 years | 22.45 Total return -36% · Per year -36% | 39.57 Total return 13% · Per year 13% | 59.46 Total return 69% · Per year 69% |
| 3 years | 24.56 Total return -28% · Per year -10% | 48.45 Total return 40% · Per year 12% | 79.52 Total return 129% · Per year 32% |
| 5 years | 26.87 Total return -20% · Per year -4% | 59.31 Total return 74% · Per year 12% | 106.35 Total return 209% · Per year 25% |
- Exit P/E± 12.11
- Net margin± 8.48
- Annual revenue growth± 6.57
- Annual dilution± 0.71
AI analysis
AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.
Possibly outdated: the newest document it read is from 30 Jul 2026; since then the company filed 8-K (29 Oct 2026 · results), 10-Q (29 Oct 2026).
In brief
Leonardo DRS supplies defense technology to U.S. national security customers and allied forces, mainly advanced sensors, network computing, force protection and naval electric propulsion. Revenue rose 10% in the second quarter of 2026 to $913 million 3, and the company raised its 2026 guidance, which makes the U.S. defense budget a central factor to follow.
SWOT
Strengths
- Durable positions on priority platforms, shown by production programs and repeat orders, plus a diversified portfolio in sensing, computing and propulsion 1.
- Record funded backlog and growing quarterly results show solid program execution 3.
- Rising internal research and development spending supports innovation in sensors and naval power 1.
Weaknesses
Opportunities
- Demand for naval electrification and tactical sensing and command systems could support growth in existing segments 1.
- The announced acquisition of a multi-domain data and mission software company could extend the mission portfolio 3.
- Allied demand for deterrence and defense capabilities outside the U.S. could add orders 2.
Risks
- Dependence on U.S. defense spendinghigh
Most revenue depends on U.S. government spending, so shifts in priorities can significantly affect results 1.
- Fixed-price contract riskmedium
If costs exceed estimates or inflation rises, the company bears the losses, which could reduce margins 1.
- Supply chainmedium
Some components have a single source, and disruptions could delay deliveries and raise costs 1.
- Cybersecuritymedium
A breach of the company's or its partners' IT systems could affect operations and classified contracts 1.
- Acquisition integrationlow
Acquisitions such as the announced software deal can bring operating difficulties and dilution 1.
Investment thesis
What would need to be true (bull case)
- If revenue and margin growth from the first half of the year holds, the raised 2026 guidance could be reached 3.
- Record funded backlog gives visibility on future revenue across several programs 3.
- Positions on priority naval platforms and demand for electrification could support long-term growth in the IMS segment 1.
What would break the thesis
What to watch
- Funded backlog and bookings development after the announced acquisitionQ3 2026
- Whether the raised Adjusted EBITDA guidance holds after the Raft integrationQ4 2026
- Defense budget allocation for the next fiscal year and the appropriations timetable2027
- Margin trends on fixed-price contracts and supply cost developmentsnext 10-K
Products, market & competition
AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.
Possibly outdated: the newest document it read is from 30 Jul 2026; since then the company filed 8-K (29 Oct 2026 · results), 10-Q (29 Oct 2026).
The business
The company runs two technology segments: Advanced Sensing and Computing (ASC), which develops sensors, edge computing and software for situational awareness, and Integrated Mission Systems (IMS), which delivers naval propulsion, power conversion and force protection systems 1. The U.S. government accounted for 80% of sales in 2025 1, and the company operates mainly as a prime contractor or as a system supplier to larger platform providers.
Segments
Advanced Sensing and Computing (ASC)
The ASC segment covers sensors such as active electronically scanned array tactical radars, EO/IR systems, electronic warfare and network computing for command and control; in the second quarter of 2026 it was led by tactical radar and infrared sensing programs 3. The company increasingly combines sensing, computing and software for applications such as counter-UAS 1.
Integrated Mission Systems (IMS)
The IMS segment delivers electric propulsion systems for the U.S. Navy, including for the Columbia Class submarine, along with force protection and transport systems 1. In the second quarter of 2026 the segment's operating margin reached 15.9%, with bookings led by electric power and propulsion 3.
Market context
The main market is U.S. defense: the Department of War budget, approved for FY2026 above the presidential request, is the largest defense budget in the world 1. Demand for sensing, electronic warfare and counter-drone capabilities is supported by global tensions in Ukraine, the Middle East and the Pacific 2. The company's revenue depends directly on spending levels and the timing of program funding.
Trends
- Stable U.S. defense budgettailwind
Legislation in 2026 added funding for defense, which could support the company's programs over the medium term 1.
- Demand for counter-UAStailwind
Recent conflicts have increased demand for counter-unmanned aircraft systems, an area where the company holds program positions 2.
- Budget uncertainty and shutdownsheadwind
Government shutdowns and delays in appropriations can postpone orders and payments to contractors 1.
- Pressure on fixed-price contractsmixed
Fixed-price contracts shift the risk of extra costs and inflation to the company, which could hurt margins if costs exceed estimates 1.
Competitive position
The company competes with divisions of large defense primes, with mid-tier and smaller defense companies, and with non-traditional firms 1. Customers mainly weigh product performance, cost, delivery schedule, embedded positions and innovation 1.
- Divisions of large defense primes
Larger competitors with more resources for research and development, active on the same naval and ground platforms 1.
- Mid-tier and smaller defense companies
Compete directly for subsystem and component contracts, especially in sensing and computing 1.
- Non-traditional companies
New entrants in software, data and defense that can compete for the same technology programs 1.
- Industry partners and suppliers
The company sometimes teams with other participants or supplies them, so these relationships can also be competitive 1.
Links, dependencies and risks
Who the company is tied to, from its own SEC filings (customers, suppliers, production, partners, competitors, countries, regulation), from the 5 %+ holders' statements (13D/13G) and from what other companies say about it. Click a node for its evidence; on a listed company the graph moves to it.
Loading the links…
News & filings
In the press
- Leonardo DRS selected by AV for U.S. Army’s Enduring-High Energy Laser production programEuropean Defence Review · 02 Nov 2026 · RO
- Leonardo DRS STAG-5 EO/IR Gimbal with Laser Target Designator supports precision fires demonstration during Iron Sting eventEuropean Defence Review · 15 Oct 2026 · RO
- Leonardo DRS awarded JIATF-401 IDIQ contract to accelerate delivery of tactical expeditionary sensing capabilities for critical counter UAS missionEuropean Defence Review · 14 Oct 2026 · RO
- ► Leonardo DRS establishes UK subsidiary and launches local capabilities for its tactical radars including full manufacturingEuropean Defence Review · 06 Oct 2026 · RO
- Leonardo DRS (DRS) Wins Korean Warship Contract. Can More Orders Follow?Yahoo Finance — News · 23 Sept 2026 · EN
SEC filings
- Quarterly report29 Oct 2026
- Current report29 Oct 2026Results of operations · Regulation FD disclosure · Financial statements and exhibits
- Quarterly report30 Jul 2026
- Current report30 Jul 2026Results of operations · Regulation FD disclosure · Financial statements and exhibits
- Current report28 Jul 2026Other events · Financial statements and exhibits
- Current report17 Jul 2026Item 5.05 · Financial statements and exhibits
- Current report14 May 2026Shareholder vote
- Quarterly report05 May 2026
- Current report05 May 2026Results of operations · Regulation FD disclosure · Financial statements and exhibits
- Proxy statement03 Apr 2026
Sources
- [1] Form 10-K, fiscal year ended 2025-12-31 · SEC / Leonardo DRS, Inc. · 27 Feb 2026
- [2] Form 10-Q, quarter ended 2026-06-30 · SEC / Leonardo DRS, Inc. · 30 Jul 2026
- [3] Form 8-K, results release (exhibit 99.1) · SEC / Leonardo DRS, Inc. · 30 Jul 2026
Figures computed by olivLaw from SEC filings and closing prices; the qualitative analysis is AI-generated from cited sources. Not investment advice.