In This Article:
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Revenue Growth: 16% year-over-year increase, driven by favorable timing of material receipts.
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Bookings: Nearly $1 billion, resulting in a book-to-bill ratio of 1.2.
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Backlog: Increased to $8.6 billion, setting a new company record.
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Organic Growth: 16% in the first quarter.
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Adjusted EBITDA: $82 million, representing 17% growth from the previous year.
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Adjusted EBITDA Margin: 10.3%, with a 10 basis point year-over-year expansion.
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Net Earnings: $50 million, up 72% year-over-year.
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Diluted EPS: $0.19 per share, a 73% increase from the previous year.
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Adjusted Net Earnings: $54 million, up 42% year-over-year.
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Adjusted Diluted EPS: $0.20 per share, a 43% increase from the previous year.
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Free Cash Flow: Improved due to increased net profitability and enhanced working capital efficiency.
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Capital Expenditures: Approximately 4% of revenue.
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2025 Revenue Guidance: $3.45 billion to $3.525 billion, implying 6% to 9% growth.
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2025 Adjusted EBITDA Guidance: $435 million to $455 million.
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2025 Adjusted Diluted EPS Guidance: $1.02 to $1.08 per share.
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2025 Free Cash Flow Conversion Target: 80% of adjusted net earnings.
Release Date: May 01, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Leonardo DRS Inc (NASDAQ:DRS) reported a strong start to the fiscal year 2025, with first-quarter results surpassing expectations.
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The company achieved a book-to-bill ratio of 1.2, with nearly $1 billion in bookings, marking the 13th consecutive quarter with a book-to-bill above 1.
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Leonardo DRS Inc (NASDAQ:DRS) experienced remarkable organic growth of 16% in Q1, along with profit expansion and improved cash flow.
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The company commenced execution of capital return initiatives, including the payment of its first dividend and initial stock repurchases.
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Leonardo DRS Inc (NASDAQ:DRS) is well-positioned to benefit from increased defense spending, with strong alignment to national defense priorities such as shipbuilding and counter-UAS technologies.
Negative Points
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The company faced challenges with a sole-source optics supplier on an international program, leading to increased costs and impacting quarterly ASC profitability.
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Pricing volatility in germanium, a key rare earth mineral, has pressured profitability and required adjustments to forward estimates.
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Despite strong Q1 results, the company maintained its full-year guidance, indicating potential caution due to a dynamic operating environment.
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ASC segment margins were negatively impacted by discrete cost growth and broader germanium cost increases.
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The international revenue saw a dip in Q1 due to timing issues related to deliveries supporting Ukraine, presenting a headwind for the quarter.