Leonardo DRS (NASDAQ:DRS) reported fourth-quarter and full-year 2025 results that comfortably cleared Wall Street estimates, propelled by a "net non-routine" boost from quantum computing technology licensing and surging demand for tactical radars and naval propulsion.
The defense electronics specialist posted fourth-quarter revenue of $1.1 billion, surpassing the analyst consensus of $995 million.
Adjusted earnings per share for the quarter came in at $0.42, beating the anticipated $0.37.
For the full year, revenue rose 13% to $3.6 billion, while net earnings surged 31% to $278 million, or $1.03 per share.
The year’s performance was significantly influenced by a 10-year, $100 million agreement to license the company’s laser intellectual property for quantum applications.
This provided a $73 million net present value tailwind to both revenue and adjusted EBITDA in 2025, helping to offset a $67 million revenue headwind from the conclusion of a legacy foreign ground surveillance program.
Leonardo DRS enters 2026 with a record book-to-bill ratio of 1.2x and a total backlog of $8.7 billion, a 3% increase year-over-year.
This visibility into future programs, ranging from Columbia-class submarine power systems to space-based infrared sensors for missile defense, allowed management to issue a robust outlook for the coming year.
For the fiscal year 2026, the company anticipates revenue between $3.85 billion to $3.95 billion (above the $3.82 billion consensus).