The raised guidance and record backlog support continued upward momentum. Monitor the ASC segment's book-to-bill ratio (0.8x this quarter vs 1.3x last year) for potential normalization in bookings. The strong balance sheet with zero borrowings provides flexibility for M&A or accelerated buybacks.
Price Chart
Executive Summary
Leonardo DRS reported Q1 2026 results that meaningfully exceeded expectations, with revenue of $846M (+6% YoY) and GAAP diluted EPS of $0.23 (+21% YoY). The company raised its full-year 2026 guidance across revenue, Adjusted EBITDA, and Adjusted Diluted EPS, signaling accelerating operational momentum and strong defense demand.
Key Financial Metrics
Key Facts
- Q1 2026 revenue $846M, up 6% YoY from $799M
- GAAP diluted EPS $0.23, up 21% YoY from $0.19
- Adjusted diluted EPS $0.26, up 30% YoY from $0.20
- Adjusted EBITDA $105M, up 28% YoY from $82M; margin expanded 210bps to 12.4%
- Raised FY2026 guidance: revenue to $3.9B-$3.975B (from $3.85B-$3.95B), Adj. EBITDA to $515M-$530M (from $505M-$525M), Adj. diluted EPS to $1.26-$1.30 (from $1.20-$1.26)
- Funded backlog reached record $4.7B, up 8% YoY
- Operating cash outflow improved to -$66M from -$138M in prior year Q1
- ASC segment revenue +9% YoY; IMS segment revenue +1% YoY with strong bookings (book-to-bill 1.5x)
- No outstanding borrowings on credit facility; cash $328M
Financial Impact
Revenue beat consensus by ~$21M (2.6%); GAAP EPS $0.23 vs consensus $0.20 (15% beat); guidance raised across all key metrics
Risk Factors
- ASC segment book-to-bill declined to 0.8x from 1.3x, signaling potential demand lumpiness
- Operating cash flow remains negative (-$66M) though improved YoY
- Free cash flow was -$95M, driven by working capital build
- Defense spending dependent on U.S. government budget appropriations
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 6 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001833756-26-000023 |
| Document: drs-20260505.htm | 0001833756-26-000023 |
| Document: 0001833756-26-000023-index-headers.html | 0001833756-26-000023 |
| Document: 0001833756-26-000023-index.html | 0001833756-26-000023 |
| Document: 0001833756-26-000023.txt | 0001833756-26-000023 |
| 8-K Data (Synthetic) | 0001833756-26-000023 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 13, 2026 13d ago | Press Release | $34.94 $35.47 | ▲ +1.52% | ▲ +1.23% | $35.84 (+2.58%) |
Sep 17, 2026 5w ago | Press Release | $37.19 $37.95 | ▲ +2.04% | ▲ +0.49% | $35.84 (−3.63%) |
Sep 8, 2026 6w ago | Insider Cluster | $36.94 $36.06 | ▼ −2.38% | ▼ −1.92% | $35.84 (−2.98%) |
Sep 8, 2026 7w ago | Insider Cluster | $36.06 $36.31 | ▲ +0.69% | ▲ +1.29% | $35.84 (−0.61%) |
Jul 30, 2026 12w ago | 8-K | $45.62 $46.05 | ▲ +0.94% | ▲ +0.24% | $35.84 (−21.44%) |
Jul 28, 2026 12w ago | 8-K | $49.21 $46.54 | ▼ −5.43% | ▼ −3.89% | $35.84 (−27.17%) |
Jul 28, 2026 12w ago | Press Release | $49.21 $46.54 | ▼ −5.43% | ▼ −3.89% | $35.84 (−27.17%) |
Jun 18, 2026 18w ago | 144 | $44.99 $45.74 | ▲ +1.67% | ▲ +3.12% | $35.84 (−20.34%) |
Jun 11, 2026 19w ago | Institutional Cluster | $49.69 $48.53 | ▼ −2.33% | ▼ −2.88% | $35.84 (−27.87%) |
Jun 9, 2026 19w ago | Insider Cluster | $46.11 $49.69 | ▲ +7.76% | ▲ +6.06% | $35.84 (−22.27%) |
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