The strong beat and raised guidance confirm accelerating defense demand and operational leverage. The Raft acquisition adds AI/mission software capabilities, but integration risk and potential debt for funding should be monitored. Expect positive price reaction on the beat and guidance raise; watch for conference call details on Raft's financial impact and margin trajectory.
Price Chart
Executive Summary
Leonardo DRS reported Q2 2026 revenue of $913M (+10% YoY) and adjusted diluted EPS of $0.35, beating consensus by 29.6%. The company raised full-year guidance for adjusted EBITDA and adjusted EPS, announced a $450M acquisition of Raft to expand AI capabilities, and ended the quarter with a record funded backlog of $5.1B. This is a strong beat with raised guidance and a strategic acquisition, confirming positive momentum.
Key Financial Metrics
Key Facts
- Q2 revenue $913M, up 10% YoY from $829M
- Adjusted diluted EPS $0.35, up 52% YoY and 29.6% above $0.27 consensus
- GAAP diluted EPS $0.32, up 60% YoY
- Adjusted EBITDA $128M, up 33% YoY; margin expanded 240bps to 14.0%
- Record funded backlog $5.1B, up 17% YoY
- Bookings $1.085B, book-to-bill 1.2x
- Raised FY2026 guidance: Adjusted EBITDA $525M-$540M (from $515M-$530M), Adjusted Diluted EPS $1.34-$1.39 (from $1.26-$1.30)
- Announced $450M acquisition of Raft (AI, data fusion, mission software)
- Q2 operating cash flow $35M, free cash flow $6M
- Declared $0.09/share dividend payable Aug 27, 2026
Financial Impact
Q2 revenue $913M (+10% YoY), adjusted EPS $0.35 (+52% YoY, 29.6% beat), raised FY2026 adjusted EBITDA and EPS guidance, record backlog $5.1B, announced $450M acquisition of Raft
Risk Factors
- Integration risk from $450M Raft acquisition
- Defense budget uncertainty or government shutdown
- Supply chain disruptions impacting program execution
- Potential dilution from debt or equity issuance to fund acquisition
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 6 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001833756-26-000037 |
| Document: drs-20260730.htm | 0001833756-26-000037 |
| Document: 0001833756-26-000037-index-headers.html | 0001833756-26-000037 |
| Document: 0001833756-26-000037-index.html | 0001833756-26-000037 |
| Document: 0001833756-26-000037.txt | 0001833756-26-000037 |
| 8-K Data (Synthetic) | 0001833756-26-000037 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 13, 2026 14d ago | Press Release | $34.94 $35.47 | ▲ +1.52% | ▲ +1.23% | $35.99 (+3.01%) |
Sep 17, 2026 5w ago | Press Release | $37.19 $37.95 | ▲ +2.04% | ▲ +0.49% | $35.99 (−3.23%) |
Sep 8, 2026 7w ago | Insider Cluster | $36.94 $36.06 | ▼ −2.38% | ▼ −1.92% | $35.99 (−2.57%) |
Sep 8, 2026 7w ago | Insider Cluster | $36.06 $36.31 | ▲ +0.69% | ▲ +1.29% | $35.99 (−0.19%) |
Jul 30, 2026 12w ago | 8-K | $45.62 $46.05 | ▲ +0.94% | ▲ +0.24% | $35.99 (−21.11%) |
Jul 28, 2026 13w ago | 8-K | $49.21 $46.54 | ▼ −5.43% | ▼ −3.89% | $35.99 (−26.86%) |
Jul 28, 2026 13w ago | Press Release | $49.21 $46.54 | ▼ −5.43% | ▼ −3.89% | $35.99 (−26.86%) |
Jun 18, 2026 18w ago | 144 | $44.99 $45.74 | ▲ +1.67% | ▲ +3.12% | $35.99 (−20.00%) |
Jun 11, 2026 19w ago | Institutional Cluster | $49.69 $48.53 | ▼ −2.33% | ▼ −2.88% | $35.99 (−27.57%) |
Jun 9, 2026 20w ago | Insider Cluster | $46.11 $49.69 | ▲ +7.76% | ▲ +6.06% | $35.99 (−21.95%) |
US Market Status
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