Leonardo DRS raises forecast as defense backlog hits record $4.7B

Leonardo DRS (NASDAQ:DRS) raised its financial outlook for the year as the defense contractor capitalizes on a record $4.7 billion backlog and surging demand for advanced sensing and electric power systems.

The Arlington, Virginia-based company reported first-quarter revenue of $846 million, a 6% increase compared to the same period last year.

The growth was primarily driven by high-priority defense programs, including tactical radars, infrared sensing, and electric propulsion technologies for the U.S. Navy.

Net earnings for the quarter rose 24% to $62 million, or $0.23 per diluted share.

On an adjusted basis, which excludes certain one-time items, diluted earnings per share jumped 30% to $0.26.

Adjusted EBITDA also saw significant momentum, climbing 28% to $105 million as margins expanded behind operational efficiencies and a favorable program mix.

The company’s "book-to-bill" ratio—a key indicator of future growth—remained healthy at 1.0x, with $885 million in new bookings during the quarter.

This activity pushed the company’s funded backlog to $4.7 billion, an 8% increase year-over-year, providing what management described as "clear visibility" into the remainder of 2026.

Leonardo DRS now expects full-year 2026 revenue to range between $3.9 billion and $3.975 billion, up from its previous forecast.

The company also increased its adjusted EBITDA guidance to a range of $515 million to $530 million.