Leonardo DRS Q2 revenue beats on higher tactical radars demand

Overview

• U.S. defense tech firm's Q2 revenue rose 10% yr/yr, beating analyst expectations

• Adjusted EPS for Q2 rose 52% and beat analyst expectations

• Company announced $450 mln Raft acquisition to expand AI and mission software

Outlook

• Leonardo DRS raises 2026 Adjusted EBITDA guidance to $525 mln-$540 mln from $515 mln-$530 mln

• Company lifts 2026 Adjusted Diluted EPS guidance to $1.34-$1.39 from $1.26-$1.30

• Leonardo DRS maintains 2026 revenue guidance at $3.9 bln-$3.975 bln

Result Drivers

• PROGRAM DEMAND - Co said Q2 revenue growth was led by tactical radars, electric power and propulsion, infrared sensing and force protection programs

• EXECUTION AND MIX - Disciplined program execution, favorable mix and leverage from increased volume fueled robust Adjusted EBITDA growth and margin expansion

• LOWER EXPENSES - Lower net interest expense and a lower tax rate supported yr/yr growth in net earnings and adjusted EPS

Company press release: ID:nGNXbR1YC3

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 8 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the aerospace defense peer group is "buy"

• Wall Street's median 12-month price target for Leonardo DRS Inc is $54.50, about 17.1% above its July 29 closing price of $46.54

Reuters Recommended Reads

• July 29 - L3Harris beats Q2 estimates; hikes forecast

• July 29 - General Dynamics Q2 revenue beats estimates on growth across segments

• July 29 - Rheinmetall Q2 profit beats forecasts as revenue jumps nearly 70%

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)