Description

Leonardo DRS’ $450 Million Raft Deal: Can Software Lift Defense Growth?

Leonardo DRS reported its second quarter of fiscal year 2026 with accelerated organic revenue growth of 10% year-over-year, reaching $913 million. The company’s bookings surpassed $1 billion, continuing an 18-quarter streak with a book-to-bill ratio above 1.0, and ended the quarter with a record funded backlog, offering strong visibility into future demand. Growth was broad-based across segments, with the Integrated Mission Systems (IMS) segment leading at 15% growth and the Advanced Sensing and Communications (ASC) segment contributing an 8% increase. Key contributors included tactical radar programs, electric power and propulsion, infrared sensing, and force protection systems. Profitability showed notable improvement as adjusted EBITDA increased by 33% year-over-year to $128 million, with margin expansion of 240 basis points to 14%.