DRS earnings analysis
What we found in DRS's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Leonardo DRS reported Q1 2026 results with revenues of $846 million, a 5.9% increase year-over-year, and diluted EPS of $0.23, surpassing estimates of $0.20. The company also raised its 2026 revenue guidance to between $3.90 billion and $3.975 billion, reflecting strong demand across its segments despite challenges in bookings. This quarter showcased a notable improvement in operating earnings and margins, bolstered by contributions from its Advanced Sensing and Computing segment.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue Growth
- Total revenue reached $846 million, up 5.9% from $799 million in Q1 2025.
- Earnings Beat
- Reported EPS of $0.23, beating the consensus estimate of $0.20 by 15%.
- Gross Margin Improvement
- Gross margin expanded to 25.1%, a 240 basis point improvement year-over-year.
- Increased Operating Earnings
- Operating earnings grew by 30.5% to $77 million compared to $59 million in the prior year.
- Segment Performance
- ASC segment revenue increased by 9.4% to $559 million, while IMS segment revenue grew 1.4%.
- Raised Guidance
- 2026 revenue guidance raised to $3.90 billion - $3.975 billion from $3.85 billion - $3.95 billion.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Free Cash Flow Outflows
- Net cash used in operating activities was $66 million, a decrease but still negative.
- Bookings Decline
- Total bookings decreased by 10.7% to $885 million from $991 million year-over-year.
- Dependence on U.S. Government Funding
- 79% of total revenue derived from U.S. government contracts, exposing reliance on federal budgets.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $0.23
- Gross margin
- 25.1%
- Operating margin
- 9.1%
- Segment
- Advanced Sensing and Computing: $559 million
- Segment
- Integrated Mission Systems: $295 million
What they said about what is next.
2026 guidance raised, reflects increasing demand and strong backlog.
The filing reads better than the one before it.
What came before.
- 10-K · February 27, 2026
- Leonardo DRS reported continued top-line growth in 2025 with total revenue of $3,648 million (firm‑fixed price $3,205M; flexibly priced $443M) and funded backlog rising to $4,643 million. The company emphasizes a…
- 10-Q · October 30, 2024
- Leonardo DRS reported Q3 (three months ended September 30, 2024) revenue of $812.0M, up $109.0M (+15.5%) versus $703.0M in Q3 2023, with gross profit of $179.0M and operating earnings of $75.0M (operating margin ~9.2%).…
- 10-Q · July 30, 2024
- Leonardo DRS reported Q2 revenue of $753.0M, up $125.0M (≈19.9%) versus $628.0M a year ago, with gross profit rising to $169.0M but gross margin compressing slightly to ~22.4%. Operating earnings improved to $55.0M…
- 10-Q · May 4, 2023
- Leonardo DRS reported Q1 FY2023 revenue of $569.0M, down from $612.0M a year earlier, with GAAP diluted EPS of $0.05 versus $0.17 in Q1 2022. Gross margin improved to ~23.0% while operating earnings fell to $25.0M from…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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