U.S. defense spending concentration
Most revenue depends on DoD appropriations and program timing, so budget disruptions can reduce demand.
- Scope
- DoD, Navy, Army, and other U.S. agencies
- Materiality
- high
Leonardo DRS, Inc.
Leonardo DRS, Inc. designs and builds advanced defense technologies for U.S. national security customers and allied defense forces. Its portfolio centers on sensing, network computing, force protection, and electric power and propulsion systems used on priority military platforms, especially naval and air-defense programs.
12,1 %
23,8 %
7,6 %
+12,8 %
1.89
1.60
| % | |
|---|---|
| Advanced Sensing and Computing | 55% Sensors, infrared systems, and network computing products that support detection, targeting, and mission processing. |
| Force Protection | 20% Counter-UAS, short-range air defense, and self-protection systems that improve survivability. |
| Naval Power and Propulsion | 20% Electric power generation, distribution, and propulsion technologies for next-generation naval platforms. |
| Other Defense Technology and Services | 5% Smaller programs, licenses, and support services across defense and allied markets. |
The U.S. government is the company’s core customer, with the Department of Defense accounting for most revenue through...
- U.S. Department of Defenseprimary
Buys advanced sensing, computing, force protection, and power systems for military platforms and modernization programs.
- U.S. Navyprimary
Buys electric power and propulsion, shipboard electronics, and related mission systems for naval vessels.
- U.S. Armyprimary
Buys counter-UAS, SHORAD, infrared sensing, and soldier protection technologies.
- Foreign governments and alliessecondary
Buy defense applications through international sales, foreign military sales, and foreign military financing.
- Other U.S. government agencies and commercial customerssecondary
Buy smaller volumes of specialized defense and security technologies and support services.
The business is overwhelmingly U.S.-centric, with about 80% of revenue tied directly or indirectly to the U.S...
- •U.S. revenue dominates and is tied to DoD procurement cycles
- •International sales were about 9% of revenue in 9M 2025
- •Foreign demand is mainly from allied governments and defense programs
- •Overseas sales can be affected by FX swings and geopolitical shifts
- •U.S. Navy and Army programs anchor domestic operating concentration
Leonardo DRS is focused on being a balanced defense technology company with strong positions in priority DoD capability...
01
Deepen positions in priority DoD programsshort-term
These programs align with long-cycle defense spending and create embedded positions.
02
Expand autonomous and software-enabled capabilitiesmedium-term
Customers are shifting toward interconnected, multi-domain systems that require more computing and sensing.
03
Pursue selective M&A and portfolio shapingmedium-term
Acquisitions can add technologies and customers, while divestitures can improve strategic focus.
The company is highly exposed to U.S. defense spending, so budget delays, shutdowns, or shifts in DoD priorities can...
Program execution on complex contracts
Defense systems are technologically complex and often fixed-price, so poor execution can compress margins.
- Scope
- Long-range surveillance, infrared, naval power, and force protection programs
- Materiality
- high
Cybersecurity and IT disruption
Defense contractors are attractive targets and outages can affect operations, IP, and customer trust.
- Scope
- Internal networks, customer systems, and third-party partners
- Materiality
- medium
Supplier and subcontractor disruption
Key components and services may not arrive on time, delaying production and delivery.
- Scope
- Electronics, materials, and specialized defense components
- Materiality
- medium
Foreign exchange and geopolitical exposure
International sales can be affected by currency moves and changing defense demand abroad.
- Scope
- Foreign military sales and direct commercial sales
- Materiality
- medium
Revenue recognition on long-term contracts
Revenue and operating margin timing
Cost-to-complete estimates and program charges
Gross margin and operating earnings
Goodwill and intangible asset impairment
Non-cash impairment expense and equity
Income tax and NOL utilization
Tax expense and cash taxes
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: 28/04/2026