Leonardo DRS Lifts FY25 Outlook After Strong Q3; Books $1.3bn and Sets CEO Transition for 2026
ARLINGTON, Va. – Leonardo DRS raised the lower end of its fiscal 2025 revenue guidance after reporting 18% year-over-year revenue growth to $960m in the third quarter. For the quarter ended 30 September 2025, the U.S. subsidiary of Leonardo posted net earnings of $72m, up 26% from the prior year, alongside strong bookings and backlog growth.
Q3 FY25 Results at a Glance
Leonardo DRS now expects FY25 revenue of $3.55bn-$3.60bn, up from prior guidance of $3.52bn-$3.60bn. The company cited demand across defense technology programs, including counter-uncrewed aerial systems (UAS), electric power and propulsion, naval network computing, and advanced infrared sensing.
- Revenue (Q3 FY25): $960m, up 18% year over year
- Net earnings (Q3 FY25): $72m, up from $57m in Q3 FY24
- Diluted EPS (Q3 FY25): $0.26, up from $0.21; Adjusted diluted EPS: $0.29, up 21% year over year
- Gross profit (Q3 FY25): $222m, up from $179m in Q3 FY24
- New funded bookings (Q3 FY25): $1.3bn
- Total backlog: $8.9bn, an 8% increase year over year
Management Commentary
Chairman and CEO Bill Lynn said: “Broad-based customer demand was evident in our exceptional bookings and organic revenue growth in the third quarter. Our year-to-date performance puts us on a solid path to deliver double-digit revenue growth and to execute against our financial commitments for 2025.
“We are making steady progress on strengthening germanium supply and remain focused on disciplined program execution throughout the business.”
Updated Outlook and Guidance
Leonardo DRS reiterated adjusted EBITDA guidance of $437m-$453m for 2025. The company lowered its expected tax rate to 18% from 19% in prior guidance and maintained diluted weighted average shares outstanding at $269m.
The company also raised its adjusted diluted EPS guidance to $1.07-$1.12, compared with a prior range of $1.06-$1.11, reflecting stronger profitability expectations amid sustained program execution.
Leadership Transition Effective 1 January 2026
In a separate announcement, Leonardo DRS said Bill Lynn will retire as chairman and CEO, effective 1 January 2026. Chief Operating Officer John Baylouny has been appointed to assume the role of president and CEO. Baylouny has worked with the company for more than 35 years, previously serving as chief technology officer and general manager of the land systems and advanced ISR businesses.
“It has been a profound honour to lead this company and work alongside such a talented and committed team, united in our mission to support the men and women of our armed forces. I am confident that this exceptional company will continue to play a vital role in shaping the future of our national defence,” Bill Lynn said.
Recent Contract Wins
- In February 2025, Leonardo DRS secured a contract to equip the Royal Thailand Army’s new Stryker combat vehicles with command, control, communications, computers, and intelligence (C4I) systems.
What’s Driving Growth
The company said Q3 revenue momentum was propelled by programs in counter-UAS, electric power and propulsion, naval network computing, and advanced infrared sensing, aligning with increased demand for integrated defense technologies and sensing capabilities. Strong bookings of $1.3bn and an $8.9bn backlog underscore broad-based customer interest and provide visibility for continued revenue growth into 2025.
Conclusion
With a raised FY25 revenue outlook, reaffirmed adjusted EBITDA guidance, and a lower projected tax rate, Leonardo DRS signaled confidence in its near-term performance. The company’s focus on program execution and supply chain resilience-alongside a planned CEO transition on 1 January 2026-positions the defense technology provider to pursue continued growth across key segments in 2025.
