Revenue growth remains inconsistent, fluctuating between 5.9% and 20.9% over the last ten quarters, while operating margins remain constrained by a fixed-cost structure that limits profitability to a 7% to 12.2% range.
| Sales/Revenue | 3.69B | 3.65B | 3.23B | 2.83B | 2.69B | 2.88B | 2.78B | 2.71B | 3.3B | 2.82B | 1.74B |
| Revenue Growth % | 10.46% | 12.8% | 14.44% | 4.94% | -6.46% | 3.64% | 2.36% | -17.64% | 16.81% | 62.55% | - |
| Cost of Goods Sold | 2.8B | 2.8B | 2.5B | 2.18B | 2.12B | 2.33B | 2.28B | 2.25B | 2.87B | 2.46B | 1.5B |
| COGS % of Revenue | - | 76.78% | 77.24% | 77.07% | 78.65% | 81% | 82.22% | 83.09% | 87.06% | 87.15% | 86.15% |
| Gross Profit | 894M | 847M | 736M | 648M | 575M | 547M | 494M | 459M | 426.48M | 362.48M | 240.31M |
| Gross Margin % | 24.19% | 23.22% | 22.76% | 22.93% | 21.35% | 19% | 17.78% | 16.91% | 12.94% | 12.85% | 13.85% |
| Gross Profit Growth % | - | 15.08% | 13.58% | 12.7% | 5.12% | 10.73% | 7.63% | 7.63% | 17.65% | 50.84% | - |
| Operating Expenses | 523M | 499M | 443M | 417M | 14M | 311M | 313M | 296M | 66.1M | 50.9M | 47.6M |
| OpEx % of Revenue | - | 13.68% | 13.7% | 14.76% | 0.52% | 10.8% | 11.27% | 10.91% | 2.01% | 1.8% | 2.74% |
| Selling, General & Admin | 510M | 497M | 414M | 384M | 357M | 293M | 283M | 277M | 0 | 0 | 0 |
| SG&A % of Revenue | - | 13.62% | 12.8% | 13.59% | 13.26% | 10.18% | 10.19% | 10.21% | - | - | - |
| Research & Development | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 66.1M | 50.9M | 47.6M |
| R&D % of Revenue | - | - | - | - | - | - | - | - | 2.01% | 1.8% | 2.74% |
| Other Operating Expenses | 3M | 2M | 29M | 33M | -343M | 18M | 30M | 19M | 0 | 0 | 0 |
| Operating Income | 366M | 348M | 293M | 231M | 561M | 236M | 181M | 163M | 360.38M | 311.58M | 192.71M |
| Operating Margin % | 9.91% | 9.54% | 9.06% | 8.17% | 20.83% | 8.2% | 6.52% | 6.01% | 10.94% | 11.04% | 11.1% |
| Operating Income Growth % | - | 18.77% | 26.84% | -58.82% | 137.71% | 30.39% | 11.04% | -54.77% | 15.66% | 61.68% | - |
| EBITDA | 436M | 441M | 384M | 316M | 626M | 294M | 234M | 214M | 438.57M | 388.25M | 241.69M |
| EBITDA Margin % | 11.8% | 12.09% | 11.87% | 11.18% | 23.25% | 10.21% | 8.42% | 7.89% | 13.31% | 13.76% | 13.93% |
| EBITDA Growth % | 8.73% | 14.84% | 21.52% | -49.52% | 112.93% | 25.64% | 9.35% | -51.2% | 12.96% | 60.63% | - |
| D&A (Non-Cash Add-back) | 70M | 93M | 91M | 85M | 65M | 58M | 53M | 51M | 78.19M | 76.66M | 48.98M |
| EBIT | 286M | 348M | 285M | 228M | 559M | 235M | 176M | 160M | 361.71M | 308.51M | 198.14M |
| Net Interest Income | -7M | -8M | -21M | -36M | -34M | -35M | -64M | -65M | -108.36M | -118.64M | -55.83M |
| Interest Income | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 2.06M | 1.27M | 7.25M |
| Interest Expense | 7M | 8M | 21M | 36M | 34M | 35M | 64M | 65M | 110.42M | 119.91M | 63.09M |
| Other Income/Expense | -11M | -12M | -29M | -39M | -36M | -36M | -69M | -68M | -109.09M | -122.99M | -57.66M |
| Pretax Income | 355M | 336M | 264M | 192M | 525M | 200M | 112M | 95M | 251.29M | 188.59M | 135.05M |
| Pretax Margin % | 9.61% | 9.21% | 8.16% | 6.79% | 19.5% | 6.95% | 4.03% | 3.5% | 7.63% | 6.69% | 7.78% |
| Income Tax | 35M | 58M | 51M | 24M | 120M | 46M | 27M | 20M | 83.75M | 60.1M | 51.99M |
| Effective Tax Rate % | 9.86% | 17.26% | 19.32% | 12.5% | 22.86% | 23% | 24.11% | 21.05% | 33.33% | 31.87% | 38.5% |
| Net Income | 290M | 278M | 213M | 168M | 405M | 154M | 85M | 75M | 165.77M | 127.06M | 81.49M |
| Net Margin % | 7.85% | 7.62% | 6.59% | 5.94% | 15.04% | 5.35% | 3.06% | 2.76% | 5.03% | 4.5% | 4.7% |
| Net Income Growth % | 23.93% | 30.52% | 26.79% | -58.52% | 162.99% | 81.18% | 13.33% | -54.76% | 30.47% | 55.91% | - |
| Net Income (Continuing) | 290M | 278M | 213M | 168M | 405M | 154M | 85M | 75M | 167.53M | 128.49M | 83.06M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | 1.08 | 1.03 | 0.80 | 0.64 | 1.88 | 1.06 | 0.57 | 0.52 | 2.01 | 6.23 | 15.99 |
| EPS Growth % | 24.14% | 28.75% | 25% | -65.96% | 77.36% | 85.96% | 9.62% | -74.06% | -67.82% | -61.04% | - |
| EPS (Basic) | - | 1.05 | 0.81 | 0.64 | 1.88 | 1.06 | 0.57 | 0.52 | 2.01 | 6.38 | 16.51 |
| Diluted Shares Outstanding | 268.8M | 268.8M | 267.7M | 264M | 215M | 145M | 149.78M | 145M | 82.69M | 20.39M | 5.1M |
| Basic Shares Outstanding | 265.3M | 265.3M | 264M | 262.5M | 215M | 145M | 149.78M | 145M | 82.46M | 19.93M | 4.94M |
| Dividend Payout Ratio | - | 34.53% | - | - | 97.78% | - | - | - | 2.98% | 3.91% | 4.55% |
DoD budget appropriation dependency
According to the provided quarterly income statements, Leonardo DRS has experienced inconsistent top-line expansion, with year-over-year growth rates fluctuating between 5.9% and 20.9% over the last ten quarters, reflecting the inherent volatility associated with milestone-based revenue recognition in large-scale defense contract execution cycles.
The revenue profile suggests a reliance on project-based delivery schedules rather than recurring commercial demand. Investors should monitor whether the recent deceleration to 5.9% in 2026Q1 represents a structural slowdown or merely a timing variance in the company's long-term naval and sensing programs.
As reported in financial statements, Leonardo DRS maintains gross margins hovering near 23%, which suggests that the company's product mix remains heavily weighted toward platform integration and hardware assembly rather than high-margin proprietary software or specialized intellectual property components common in the broader defense electronics sector.
Operating margins have struggled to consistently exceed the 10% threshold, indicating that significant SG&A overhead is required to support complex government contracting requirements. This margin profile appears to limit the company's ability to achieve the superior profitability metrics seen in more specialized peers like HEICO or Curtiss-Wright.
Based on the reported figures, operating income has demonstrated sensitivity to revenue fluctuations, with operating margins expanding to 11.9% during peak revenue periods but contracting toward 7% during lower-volume quarters, indicating that the company's cost structure retains a meaningful fixed-cost component that is not yet fully optimized.
The lack of consistent operating margin expansion despite revenue growth suggests that SG&A expenses are scaling in tandem with project activity. This may imply that the company is currently in a phase of heavy investment or that contract-specific costs are preventing the realization of significant economies of scale.
Analysis of the income statement reveals that stock-based compensation, which reached $13 million in 2025Q4, periodically creates a wedge between operating performance and net income, warranting further investigation into how these non-cash charges influence the underlying earnings power of the business for minority shareholders.
The variability in quarterly EPS growth, ranging from 0% to over 140%, suggests that headline earnings are susceptible to non-operating items and accounting adjustments. Investors should be cautious of relying on GAAP net income as a proxy for cash-generative capacity given the potential for percentage-of-completion accounting to mask underlying operational volatility.
Quick answers to the most common questions about buying DRS stock.
For fiscal year 2025, Leonardo DRS, Inc. (DRS) reported total revenue of $3.65B. This represents a 110.2% increase compared to $1.74B in 2005.
Leonardo DRS, Inc. (DRS) is profitable, generating $278.0M in net income for the fiscal year ending 2025 with a net profit margin of 7.6%.
Leonardo DRS, Inc. (DRS) reported an operating income of $348.0M, resulting in an operating profit margin of 9.5%. This margin reflects the operational efficiency of the business before interest and taxes.
Leonardo DRS, Inc. (DRS) generated $847.0M in gross profit for the year, representing a gross profit margin of 23.2%. This demonstrates the company's core pricing power and production efficiency.