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Investing.com -- On Wednesday, Leonardo DRS, Inc. reported second-quarter results that exceeded analyst expectations, with adjusted earnings per share of $0.23, beating the consensus estimate of $0.21, and revenue of $829 million, slightly surpassing the expected $827.46 million.
The defense technology provider delivered 10% YoY revenue growth in the quarter ended June 30, 2025, driven primarily by programs related to electric power and propulsion, advanced infrared sensing, and ground network computing. Net earnings jumped 42% to $54 million, while adjusted EBITDA increased 17% to $96 million with margins expanding to 11.6% from 10.9% a year earlier.
Following the earnings release, Leonardo DRS shares dipped 1.9% in premarket trading, despite the company raising its full-year 2025 guidance. The company now expects revenue between $3.525 billion and $3.6 billion, up from its previous forecast of $3.425 billion to $3.525 billion. It also raised its adjusted diluted EPS guidance to $1.06-$1.11 from $1.02-$1.08 previously.
"Leonardo DRS delivered another set of strong financial results marked by healthy bookings, solid organic revenue growth and continued profit and margin expansion in the second quarter," said Bill Lynn, Chairman and CEO. "The need to deter and contest heightened global threats continues to bolster customer demand for our innovative, high-performance technologies."
The company reported $853 million in new funded bookings during the quarter, achieving a book-to-bill ratio of 1.0x. Total (EPA:TTEF) backlog stood at $8.6 billion, representing a 9% increase YoY. The company also declared a quarterly cash dividend of $0.09 per share, payable on September 3, 2025.
Both operating segments showed growth, with Advanced Sensing and Computing revenues up 10% to $542 million, while Integrated Mission Systems revenues increased 9% to $290 million. The latter segment showed particularly strong margin improvement, with adjusted EBITDA margin expanding 290 basis points to 13.1%.