Leonardo DRS (NASDAQ:DRS) Delivers Strong Q4, Optimistic Full-Year Sales Guidance

Leonardo DRS, Inc. (NASDAQ: DRS), a leading provider of advanced defense technologies, reported strong financial results for the fourth quarter and full year 2024, exceeding market expectations. The company's robust performance was driven by its strategic positioning in key defense technology segments, particularly in advanced infrared sensing, tactical radars, and electric power and propulsion programs.



The company's revenue for the fourth quarter reached $981 million, up 6% compared to the same period in 2023. Full-year revenue grew by 14% to $3.2 billion. This growth was primarily driven by programs related to tactical radars, naval network computing, advanced infrared sensing, and electric power and propulsion. Both Q4 and full-year 2024 adjusted EBITDA grew as a result of improved program execution, favorable program mix, and operational leverage from increased volume. The company's strong operating performance, combined with decreased interest expense, drove year-over-year net earnings and adjusted net earnings growth for the quarter and the full year.



Leonardo DRS' backlog grew by 10% to $8.5 billion, providing approximately 2.7 years of revenue coverage at current run rates and exceptional visibility into future performance. The company's book-to-bill ratio of 1.3 indicates strong market demand and suggests continued organic growth potential. The transition of programs like Columbia Class from development to production phases is driving margin improvement, reflecting the company's ability to execute complex defense programs efficiently.

The company's Board of Directors declared a cash dividend of $0.09 per common share payable on March 27, 2025, to shareholders of record on March 13, 2025. Additionally, the Board authorized a $75 million stock repurchase program, demonstrating the company's commitment to returning capital to shareholders while maintaining a strong balance sheet.

Leonardo DRS' Q4 and 2024 results reflect a compelling growth trajectory underpinned by strong operational execution and strategic positioning in key defense technology segments. The 14% full-year revenue growth, coupled with margin expansion and robust free cash flow generation, demonstrates the company's operational excellence and improving business mix. The backlog growth to $8.5 billion, representing approximately 2.7 years of revenue coverage at current run rates, provides exceptional visibility into future performance. The book-to-bill ratio of 1.3 indicates strong market demand and suggests continued organic growth potential. The company's dual-track capital deployment strategy, introducing a quarterly dividend and authorizing a $75 million share repurchase program, reflects a balanced approach to shareholder returns. With $598 million in cash and debt, the company maintains significant financial flexibility for future growth investments.

Investors should consider Leonardo DRS as a strong performer in the defense technology sector, with a solid track record of growth and a promising outlook for the future. The company's strategic positioning in key defense technology segments, combined with its ability to execute complex defense programs efficiently, positions it well for continued success in the market.