Leonardo DRS sees 10% growth in 2nd quarter

Leonardo DRS provides equipment for the US Army's Maneuver-Short Range Air Defense (M-SHORAD) system. (US Army)

Leonardo DRS continues to benefit from strong demand for products across its portfolio, John Baylouny, president and CEO for Leonardo DRS, said during a second quarter earnings call on 30 July.

“Organic revenue growth accelerated to 10% year over year. Bookings exceeded USD1 billion, driving book-to-bill to 1.2 times for the quarter,” he said, adding that the company saw 33% year-over-year growth in the quarter.

Revenue of USD913 million was recorded in the second quarter, “led by programmes related to tactical radars, electric power propulsion, infrared sensing, and force protection”, Michael Dippold, executive vice-president and chief financial officer for Leonardo DRS, said during the call, adding that the Integrated Mission Systems (IMS) segment saw 15% growth, and the Advanced Sensing and Computing (ASC) segment, 8%.

IMS “margins were strong on improved execution across the entire segment, led by the naval propulsion business”, he added.

Growth

Baylouny attributed growth to “execution, favourable programme mix, and the retirement of programme risk”, adding that overall market expansion has also played a role.

“Customers are prioritising modernisation and the procurement of production-ready capabilities,” while an elevated global threat environment drives demand, he said.

The company is anticipating a continuing resolution (CR) in the fourth quarter as the US Congress works to pass a fiscal year (FY) 2027 defence budget, Baylouny said.

“If there is an extended CR, we do expect [Congress] to provide some flexibility in the CR that would give the department the ability to move forward with new starts and things like that. I don't see that as a risk to DRS,” he explained.