Leonardo DRS, Inc.
For the period ended Sep 30, 2025. Filed Oct 29, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Oct 29, 2025
DRS$34.04+3.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-07-30.
0001628280-25-036706
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-10-29.
0001833756-25-000010
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 135 previous paragraphs and 137 current paragraphs.
87 unchanged; 45 reworded; 3 added; 3 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 7 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (3)
Current report
On October 1, 2025, a lapse in government fiscal year 2026 appropriations occurred, and the U.S. government entered a shutdown. At this time, it is unclear if the government will be funded by one or more Continuing Resolutions (“CR”) or by a full year appropriations act. Federal agencies have published shutdown guidance, including the DoD, which has furloughed civilian positions and restricted activities in the absence of enacted funding. Active duty pay remains intact, but that is subject to review going forward. If the U.S. government shutdown is protracted, it could have programmatic and funding impacts on our business. Delayed billing, testing and prohibitions on new contract awards, as well as resourcing delays by federal workers, could lead to a material effect on our operations and financial position.
Current report
IMS segment revenue increased by $98 million, or 34.4%, to $383 million for the three months ended September 30, 2025 from $285 million for the three months ended September 30, 2024, which is attributed to increased revenue generated from our force protection programs, highlighted by our efforts in counter drone capabilities.
Current report
For the nine months ended September 30, 2025, bookings increased by $247 million, or 26.9%, from the nine months ended September 30, 2024 to $1,166 million. The increase for the nine months ended is largely attributed to funding received for the counter drone and short range air defense efforts within our force protection business coupled with continued demand across our naval power portfolio.
Removed paragraphs (3)
Previous report
In March 2025, Congress passed a full-year Continuing Resolution (“CR”) to fund the government through the end of fiscal year (“FY”) 2025. The CR authorizes slightly higher spending than FY 2024 levels for defense and allows significant flexibility in how the DoD funds its priorities. This full-year CR prevented a U.S. government shutdown in FY 2025. However, the extended CR and its flexibility has the potential to impact program funding and as a consequence, results of operations including, but not limited to, program cancellations, schedule delays, production halts and other disruptions. Additionally, the current U.S. administration has discussed various changes to defense spending levels ranging from across-the-board percentage cuts, to a change in spending allocations in favor of new priorities, and potential increases in the top-line spending profile. It remains unclear whether and to what extent the DoD’s budget may change and, if it does, to what extent our business, financial condition and results of operations may be affected.
Previous report
16.8% for the three and six months ended June 30, 2025, respectively, compared to 19.1% and 20.2% for the six months ended June 30, 2024, respectively.
Previous report
For the three months ended June 30, 2025, bookings decreased by $31 million, or 9.5%, from the three months ended June 30, 2024 to $294 million. The decrease for the three months ended is largely attributed to accelerated funding received for the next tranche of the Columbia Class program in the first quarter of 2025.
Reworded paragraphs (45)
Previous wording
Our overall strategy is to be a balanced and diversified company, less vulnerable to any one budgetary platform or service decision with a specific focus on establishing strong technical and market positions in areas of priority for the DoD. The DoD is our largest customer and, for the six months ended June 30, 2025, accounted for approximately 80% of our business as an end-user, with revenues principally derived directly or indirectly from contracts with the U.S. Navy and U.S. Army, which represented 40% and 33%, respectively, of our total revenues for such period, which is consistent with historic trends.
Current wording
Our overall strategy is to be a balanced and diversified company, less vulnerable to any one budgetary platform or service decision with a specific focus on establishing strong technical and market positions in areas of priority for the DoD. The DoD is our largest customer and, for the nine months ended September 30, 2025, accounted for approximately 81% of our business as an end-user, with revenues principally derived directly or indirectly from contracts with the U.S. Navy and U.S. Army, which represented 38% and 36%, respectively, of our total revenues for such period, which is consistent with historic trends.
Previous wording
Our sensing capabilities span numerous applications, including missions requiring advanced passive and active detection, precision targeting and surveillance sensing, long range electro-optic/infrared (“EO/IR”), signals intelligence (“SIGINT”) and other intelligence systems, electronic warfare (“EW”), ground vehicle sensing, next generation active electronically scanned array tactical radars, dismounted soldier sensing and space sensing. Across our offerings, we are focused on advancing sensor distance and enhancing the precision, clarity, definition, spectral depth and effectiveness of our sensors. We also seek to leverage the knowledge and expertise built through our decades of experience to optimize size, weight, power and cost for our customers’ specific mission requirements.
Current wording
Our sensing capabilities span numerous applications, including missions requiring advanced passive and active detection, precision targeting and surveillance sensing, long range electro-optic/infrared (“EO/IR”), signals intelligence (“SIGINT”) and other intelligence systems, electronic warfare (“EW”), ground vehicle sensing, next generation active electronically scanned array tactical radars, dismounted soldier sensing and space sensing. Across our offerings, we are focused on advancing sensor distance and enhancing the precision, clarity, definition, spectral depth and effectiveness of our sensors in combination with artificial intelligence (“AI”), enabled by our advanced edge processing solutions. We also seek to leverage the knowledge and expertise built through our decades of experience to optimize size, weight, power and cost for our customers’ specific mission requirements.
Previous wording
Our sensing capabilities are complemented by our rugged, trusted and cyber resilient network computing products. Our network computing offerings are utilized across a broad range of mission applications including platform computing on ground and shipboard (both surface ship and submarine) for advanced battle management, combat systems, radar, command and control (“C2”), tactical networks, tactical computing and communications. These products help support the DoD’s need for greater situational understanding at the tactical edge by rapidly transmitting data securely between command centers and forward-positioned defense assets and personnel.
Current wording
Our sensing capabilities are complemented by our rugged, trusted and cyber resilient network edge computing products. Our network computing offerings are utilized across a broad range of mission applications including platform computing on ground and shipboard (both surface ship and submarine) for advanced battle management, combat systems, radar, command and control (“C2”), tactical networks, tactical computing and communications at the “edge” of the network and battlespace. These products help support the DoD’s need for greater situational understanding at the tactical edge by leveraging artificial intelligence and AI-optimized open architecture software, SAGEcore™, to rapidly share, synthesize and transmit data securely between command centers and forward-positioned defense assets and personnel.
Previous wording
DRS is also an integrator of complex systems in ground vehicles for short-range air defense, counter-unmanned aerial systems (“C-UAS”), and vehicle survivability and protection. Our short-range air defense systems integrate EW equipment, reconnaissance and surveillance systems, modular combat vehicle turrets, and stabilized sensor suites, as well as kinetic and directed energy countermeasures to protect against evolving threats. Our force protection systems, including solutions for C-UAS and active protection systems on army vehicles, help protect personnel and defense assets from enemy combatants.
Current wording
DRS is also an integrator of complex systems in ground vehicles for short-range air defense, counter - unmanned aerial systems (“C-UAS”), and vehicle survivability and protection. Our short-range air defense systems integrate advanced AESA Radars, EW equipment, reconnaissance and surveillance systems, mission command capabilities, modular combat vehicle turrets, and stabilized sensor suites, as well as kinetic and directed energy countermeasures to protect against evolving threats. Our force protection systems, including solutions for C-UAS and active protection systems on army vehicles, help protect personnel and defense assets from enemy combatants.
Previous wording
Revenues derived directly, as a prime contractor, or indirectly, as a subcontractor, from contracts with the U.S. government represented 80% and 82% of our total revenues for the six months ended June 30, 2025 and 2024, respectively. Our U.S. government sales are highly concentrated within our DoD customers, which made up the overwhelming majority of our U.S. government revenue for the six months ended June 30, 2025, and are principally derived directly or indirectly from contracts with the U.S. Navy and U.S. Army, which represented 40% and 33%, respectively, of our total revenues for the six months ended June 30, 2025. Therefore, our revenue is highly correlated to changes in U.S. government spending levels, especially within the DoD. The DoD budget is the largest defense budget in the world.
Current wording
Revenues derived directly, as a prime contractor, or indirectly, as a subcontractor, from contracts with the U.S. government represented 81% of our total revenues for the nine months ended September 30, 2025 and 2024. Our U.S. government sales are highly concentrated within our DoD customers, which made up the overwhelming majority of our U.S. government revenue for the nine months ended September 30, 2025, and are principally derived directly or indirectly from contracts with the U.S. Navy and U.S. Army, which represented 38% and 36%, respectively, of our total revenues for the nine months ended September 30, 2025. Therefore, our revenue is highly correlated to changes in U.S. government spending levels, especially within the DoD. The DoD budget is the largest defense budget in the world.
Previous wording
On July 4, 2025, the President signed into law the One Big Beautiful Bill Act, a budget reconciliation measure that authorizes an additional $150 billion in mandatory defense related funding, of which approximately $113 billion is expected to be obligated during fiscal year 2026. Additionally, on July 18, 2025, the U.S. House of Representatives passed the Fiscal Year 2026 Department of Defense Appropriations Act, which provides for approximately $832 billion in discretionary defense spending. These two legislative measures significantly shape the funding outlook for the DoD and have direct implications for our operations, programs and long-term strategy.
Current wording
On July 4, 2025, the President signed into law the One Big Beautiful Bill Act, a budget reconciliation measure that authorizes an additional $150 billion in mandatory defense related funding, of which approximately $113 billion is expected to be obligated during fiscal year 2026. Additionally, on July 18, 2025, the U.S. House of Representatives passed the Fiscal Year 2026 Department of Defense Appropriations Act, which provides for approximately $832 billion in discretionary defense spending.
Previous wording
Revenue consists primarily of product related revenue, which represented 94% of our total revenues for the six months ended June 30, 2025. Our remaining revenue was generated from service related contracts. Additionally, 86% of our revenue was derived from firm-fixed price contracts for the six months ended June 30, 2025. This was consistent with the prior year comparable period which realized product related revenue of 94% and revenue from firm-fixed price contracts of 82% for the six months ended June 30, 2024.
Current wording
Revenue consists primarily of product related revenue, which represented 94% of our total revenues for the nine months ended September 30, 2025. Our remaining revenue was generated from service related contracts. Additionally, 88% of our revenue was derived from firm-fixed price contracts for the nine months ended September 30, 2025. This was consistent with the prior year comparable period which realized product related revenue of 94% and revenue from firm-fixed price contracts of 83% for the nine months ended September 30, 2024.
Previous wording
Under flexibly priced contracts, we are reimbursed for allowable or otherwise defined total costs (defined as cost of revenues plus allowable general and administrative expenses) incurred, plus a fee. The contracts may also include incentives for various performance criteria, including quality, timeliness, cost-effectiveness or other factors. For the six months ended June 30, 2025 and 2024, flexibly priced contracts represented 14% and 18% of our total revenues, respectively.
Current wording
Under flexibly priced contracts, we are reimbursed for allowable or otherwise defined total costs (defined as cost of revenues plus allowable general and administrative expenses) incurred, plus a fee. The contracts may also include incentives for various performance criteria, including quality, timeliness, cost-effectiveness or other factors. For the nine months ended September 30, 2025 and 2024, flexibly priced contracts represented 12% and 17% of our total revenues, respectively.
Previous wording
The following discussion of operating results is intended to help the reader understand the results of operations and financial condition of the Company for the three and six months ended June 30, 2025 as compared to the three and six months ended June 30, 2024. Given the nature of our business, we believe revenue and operating earnings are most relevant to an understanding of our performance at an enterprise and segment level. Our operating cycle is longer term in nature and involves various types of production contracts and varying delivery schedules. Accordingly, operating results in a particular period may not be indicative of future operating results.
Current wording
The following discussion of operating results is intended to help the reader understand the results of operations and financial condition of the Company for the three and nine months ended September 30, 2025 as compared to the three and nine months ended September 30, 2024. Given the nature of our business, we believe revenue and operating earnings are most relevant to an understanding of our performance at an enterprise and segment level. Our operating cycle is longer term in nature and involves various types of production contracts and varying delivery schedules. Accordingly, operating results in a particular period may not be indicative of future operating results.
Previous wording
Our revenue generation of $829 million for the three months ended June 30, 2025 represents an increase of $76 million, or 10.1%, as compared to the three months ended June 30, 2024. The revenue increase is primarily attributed to our continued backlog growth across each of our operating segments. This is highlighted by our efforts within electric power and propulsion and advanced sensing activities.
Current wording
Our revenue generation of $960 million for the three months ended September 30, 2025 represents an increase of $148 million, or 18.2%, as compared to the three months ended September 30, 2024. The revenue increase is primarily attributed to our continued backlog growth across each of our operating segments. This is highlighted by our efforts within force protection, electric power and propulsion and advanced sensing activities.
Previous wording
Our revenue generation of $1,628 million for the six months ended June 30, 2025 represents an increase of $187 million, or 13.0%, as compared to the six months ended June 30, 2024. The revenue increase is primarily attributed to our continued backlog growth across each of our operating segments. This is highlighted by our efforts within advanced sensing, electric power and propulsion and force protection activities.
Current wording
Our revenue generation of $2,588 million for the nine months ended September 30, 2025 represents an increase of $335 million, or 14.9%, as compared to the nine months ended September 30, 2024. The revenue increase is primarily attributed to our continued backlog growth across each of our operating segments. This is highlighted by our efforts within advanced sensing, electric power and propulsion and force protection activities.
Previous wording
Cost of revenues increased by $48 million, or 8.2%, to $632 million for the three months ended June 30, 2025 as compared to $584 million for the three months ended June 30, 2024. The cost of revenues increase was primarily due to the increased revenue contribution realized during the period, partially offset by efficient execution on Columbia Class programs.
Current wording
Cost of revenues increased by $105 million, or 16.6%, to $738 million for the three months ended September 30, 2025 as compared to $633 million for the three months ended September 30, 2024. The cost of revenues increase was primarily due to the increased revenue contribution realized during the period and the impact of additional charges realized on a long range surveillance program, which was partially offset by favorable revenue mix and efficient execution on Columbia Class programs.
Previous wording
Cost of revenues increased by $131 million, or 11.7%, to $1,250 million for the six months ended June 30, 2025 as compared to $1,119 million for the six months ended June 30, 2024. The cost of revenues increase was primarily due to the increased revenue contribution realized during the period and increased cost of germanium on our infrared products, partially offset by efficient execution on Columbia Class programs.
Current wording
Cost of revenues increased by $236 million, or 13.5%, to $1,988 million for the nine months ended September 30, 2025 as compared to $1,752 million for the nine months ended September 30, 2024. The cost of revenues increase was primarily due to the increased revenue contribution realized during the period, increased cost of germanium on our infrared products, and the impact of the surveillance program charge, partially offset by efficient execution on Columbia Class programs, favorable mix and overall improvement in program execution.
Previous wording
Gross profit increased by $28 million, or 16.6%, to $197 million for the three months ended June 30, 2025 and increased by $56 million, or 17.4%, to $378 million for the six months ended June 30, 2025 as compared to the same periods in the prior year, resulting from the revenue and cost of revenues trends noted above. The gross profit increase and higher profitability on our electric power and propulsion programs drove an expansion of 140bps and 90bps in our gross margin for the three and six months ended June 30, 2025, respectively.
Current wording
Gross profit increased by $43 million, or 24.0%, to $222 million for the three months ended September 30, 2025 and increased by $99 million, or 19.8%, to $600 million for the nine months ended September 30, 2025 as compared to the same periods in the prior year, resulting from the revenue and cost of revenues trends noted above. The gross profit increase, favorable mix and overall program performance, including on the Columbia Class program, drove an expansion of 110 basis points and 100 basis points in our gross margin for the three and nine months ended September 30, 2025, respectively.
Previous wording
G&A expenses increased by $14 million, or 13.1%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, primarily due to increased internal research and development expenditures and costs related to bid and proposal efforts for new contractual pursuits.
Current wording
G&A expenses increased by $25 million, or 25.5%, for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, primarily due to increased internal research and development expenditures and costs related to bid and proposal efforts for new contractual pursuits.
Previous wording
G&A expenses increased by $30 million, or 14.4%, for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, primarily due to increased internal research and development expenditures, costs related to bid and proposal efforts for new contractual pursuits and increases attributed to performance-related compensation.
Current wording
G&A expenses increased by $55 million, or 18.0%, for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, primarily due to increased internal research and development expenditures, costs related to bid and proposal efforts for new contractual pursuits and increases attributed to performance-related compensation.
Previous wording
Amortization of intangibles was consistent for the three and six months ended June 30, 2025 as compared to the three and six months ended June 30, 2024.
Current wording
Amortization of intangibles was relatively consistent for the three and nine months ended September 30, 2025 as compared to the three and nine months ended September 30, 2024.
Previous wording
Other operating expenses were zero for the three and six months ended June 30, 2025 compared to $1 million and $5 million for the three and six months ended June 30, 2024, respectively. The expenses in the prior year periods are attributed to restructuring efforts that were implemented in our ASC segment.
Current wording
Other operating expenses were $1 million for the three and nine months ended September 30, 2025 compared to zero and $5 million for the three and nine months ended September 30, 2024, respectively.
Previous wording
Operating earnings increased by $15 million to $70 million for the three months ended June 30, 2025 and increased by $31 million to $129 million for the six months ended June 30, 2025 as compared to the same periods in the prior year. The increases were driven by the gross profit impacts noted above.
Current wording
Operating earnings increased by $18 million to $93 million for the three months ended September 30, 2025 and increased by $49 million to $222 million for the nine months ended September 30, 2025 as compared to the same periods in the prior year. The increases were driven by the gross profit impacts noted above.
Previous wording
Net interest expense decreased by $5 million to $2 million for the three months ended June 30, 2025 and decreased by $9 million to $3 million for the six months ended June 30, 2025 as compared to the same periods in the prior year. The reduction in net interest expense is attributed to increased interest income as a result of higher cash balances and reduced borrowings on our credit facilities during the current year period.
Current wording
Net interest expense decreased by $1 million to $4 million for the three months ended September 30, 2025 and decreased by $10 million to $7 million for the nine months ended September 30, 2025 as compared to the same periods in the prior year. The reduction in net interest expense is attributed to increased interest income as a result of higher cash balances and reduced borrowings on our credit facilities during the current year period.
Previous wording
Other, net remained relatively consistent for the three and six months ended June 30, 2025 as compared to the same periods in the prior year.
Current wording
Other, net remained relatively consistent for the three and nine months ended September 30, 2025 as compared to the same periods in the prior year.
Previous wording
Earnings before taxes increased by $20 million to $67 million for the three months ended June 30, 2025 and increased by $41 million to $125 million for the six months ended June 30, 2025, as compared to the same periods in the prior year. This was primarily due to the increases in operating earnings and decreased net interest expense as noted above.
Current wording
Earnings before taxes increased by $18 million to $87 million for the three months ended September 30, 2025 and increased by $59 million to $212 million for the nine months ended September 30, 2025, as compared to the same periods in the prior year. This was primarily due to the increases in operating earnings and decreased net interest expense as noted above.
Previous wording
Income tax provision increased by $4 million for the three and six months ended June 30, 2025 as compared to the same periods in the prior year. This was attributed to an increase in earnings before taxes noted above, offset by the recognition of discrete tax benefits associated with employee stock vesting that occurred during the six months ended June 30, 2024. Our effective tax rate was 19.4% and
Current wording
Income tax provision increased by $3 million and $7 million for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in the prior year. This was attributed to an increase in earnings before taxes noted above, offset by the recognition of discrete tax benefits associated with employee stock vesting that occurred during the nine months ended September 30, 2024. Our effective tax rate was 17.2% and 17.0% for the three and nine months ended September 30, 2025, respectively, compared to 17.4% and 19.0% for the nine months ended September 30, 2024, respectively.
Previous wording
Net earnings increased by $16 million to $54 million for the three months ended June 30, 2025 and increased by $37 million to $104 million for the six months ended June 30, 2025, as compared to the same periods in the prior year. This was driven by an increase in earnings before taxes coupled with the changes in our effective tax rate as noted above.
Current wording
Net earnings increased by $15 million to $72 million for the three months ended September 30, 2025 and increased by $52 million to $176 million for the nine months ended September 30, 2025, as compared to the same periods in the prior year. This was driven by an increase in earnings before taxes coupled with the changes in our effective tax rate as noted above.
Previous wording
Backlog increased by $682 million to $8,607 million as of June 30, 2025, from $7,925 million as of June 30, 2024. The backlog increase was driven primarily by the receipt of new awards within our ASC and IMS segments.
Current wording
Backlog increased by $645 million to $8,909 million as of September 30, 2025, from $8,264 million as of September 30, 2024. The backlog increase was driven primarily by the receipt of new awards within our ASC and IMS segments.
Previous wording
We define bookings as the total value of contract awards received from the U.S. government for which it has appropriated funds and legally obligated such funds to the Company through a contract or purchase order, plus the value of contract awards and orders received from customers other than the U.S. government.
Current wording
We define bookings as the total value of contract awards received from the U.S. government for which it has appropriated funds and legally obligated such funds to the Company through a contract or purchase order, plus the funded value of contract awards and orders received from customers other than the U.S. government.
Previous wording
Bookings for the three months ended June 30, 2025 decreased to $853 million as compared to $941 million for the three months ended June 30, 2024. Bookings for the six months ended June 30, 2025 increased to $1,844 million as compared to $1,756 million for the six months ended June 30, 2024. The increase in new orders was driven by both segments. See“—Review of Operating Segments” below for more detail.
Current wording
Bookings for the three months ended September 30, 2025 increased to $1,307 million as compared to $1,051 million for the three months ended September 30, 2024. Bookings for the nine months ended September 30, 2025 increased to $3,151 million as compared to $2,807 million for the nine months ended September 30, 2024. The increase in new orders was driven by both segments. See“—Review of Operating Segments” below for more detail.
Previous wording
After establishing the estimated total cost at completion, we follow a standard Estimate at Completion (“EAC”) process in which we review the progress and performance on our ongoing contracts. The following represents the net impact that changes in our estimates, particularly those regarding our fixed-price programs, have had on our revenues for the three and six months ended June 30, 2025 and 2024:
Current wording
After establishing the estimated total cost at completion, we follow a standard Estimate at Completion (“EAC”) process in which we review the progress and performance on our ongoing contracts. The following represents the net impact that changes in our estimates, particularly those regarding our fixed-price programs, have had on our revenues for the three and nine months ended September 30, 2025 and 2024:
Previous wording
International revenue, including foreign military sales, foreign military financing, and direct commercial sales, accounted for approximately 8% and 13% of our revenue for the six months ended June 30, 2025 and 2024, respectively. The decrease in international revenues is primarily attributed to the timing of certain dismounted soldier sensing program sales to Eastern European countries realized in the first quarter of the prior year. Despite the reduction of international sales for the current year period, given the trend of international defense investment and the continuing conflicts in both Ukraine and Israel, we anticipate that international sales will be relatively consistent as a percentage of sales that we realized in the full year 2024. However, we remain subject to the spending levels, pace and priorities of the U.S. government as well as international governments and commercial customers, and to general economic conditions that could adversely affect us, our customers and our suppliers.
Current wording
International revenue, including foreign military sales, foreign military financing, and direct commercial sales, accounted for approximately 9% and 13% of our revenue for the nine months ended September 30, 2025 and 2024, respectively. The decrease in international revenues is primarily attributed to the timing of certain dismounted soldier sensing program sales to Eastern European countries realized in the first quarter of the prior year. Despite the reduction of international sales for the current year period, given the trend of international defense investment and the continuing conflicts in both Ukraine and Israel, we anticipate that international sales will drive future growth opportunities. However, we remain subject to the spending levels, pace and priorities of the U.S. government as well as international governments and commercial customers, and to general economic conditions that could adversely affect us, our customers and our suppliers.
Previous wording
Additionally, some international sales may expose us to foreign exchange fluctuations and changing dynamics of foreign competitiveness based on variations in the value of the U.S. dollar relative to other currencies. The impact of those fluctuations is reflected throughout our Consolidated Financial Statements, but in the aggregate, did not have a material impact on our results of operations for the six months ended June 30, 2025.
Current wording
Additionally, some international sales may expose us to foreign exchange fluctuations and changing dynamics of foreign competitiveness based on variations in the value of the U.S. dollar relative to other currencies. The impact of those fluctuations is reflected throughout our Consolidated Financial Statements, but in the aggregate, did not have a material impact on our results of operations for the nine months ended September 30, 2025.
Previous wording
The ASC segment reported revenue of $542 million for the three months ended June 30, 2025, an increase of 10.2%, or $50 million, from the three months ended June 30, 2024. The revenue increase is attributed to both our advanced sensing and force protection programs. Within our advanced sensing portfolio, revenue growth is highlighted by increased revenue within our tactical computing programs and continued expansion of our C-UAS tactical radars.
Current wording
The ASC segment reported revenue of $580 million for the three months ended September 30, 2025, an increase of 8.8%, or $47 million, from the three months ended September 30, 2024. The revenue increase is attributed to our advanced sensing programs. Within our advanced sensing portfolio, revenue growth is highlighted by increased revenue within our dismounted and ground vehicle sensing applications.
Previous wording
The ASC segment reported revenue of $1,053 million for the six months ended June 30, 2025, an increase of 13.8%, or $128 million, from the six months ended June 30, 2024. The revenue increase is attributed to both our advanced sensing and force protection programs. Within our advanced sensing portfolio, revenue growth is highlighted by increased revenue within our advanced sensing portfolio (dismounted and ground vehicle), network computing programs and continued expansion of our C-UAS tactical radars within our force protection efforts.
Current wording
The ASC segment reported revenue of $1,633 million for the nine months ended September 30, 2025, an increase of 12.0%, or $175 million, from the nine months ended September 30, 2024. The revenue increase is attributed to our advanced sensing, network computing and force protection programs. ASC revenue growth is highlighted by increased revenue within our advanced sensing portfolio (dismounted and ground vehicle), network computing programs which benefited by our efforts within the U.S. Navy, and force protection programs which benefited by continued expansion of our tactical radars to support C-UAS and other short-range threats.
Previous wording
Operating earnings was consistent for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024 despite the increased revenue. This drove operating margin to 6.8% for the three months ended June 30, 2025 compared to the 7.5% realized during the three months ended June 30, 2024. The operating margin decrease is primarily attributed to increased investment in internal research and development efforts during the period.
Current wording
Operating earnings was consistent for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024 despite the increased revenue. This drove operating margin to 7.8% for the three months ended September 30, 2025 compared to the 8.4% realized during the three months ended September 30, 2024. The operating margin decrease is primarily attributed to increased investment in internal research and development efforts and G&A expenditures during the period.
Previous wording
For the six months ended June 30, 2025, operating earnings increased by $6 million, or 10.7%, to $62 million for the six months ended June 30, 2025 from $56 million for the six months ended June 30, 2024. The increase was driven by increased revenue contribution and a reduction in restructuring expenditures, offset by the increased cost of germanium on our infrared programs, and increased G&A and internal research and development expenditures. The net of these impacts drove operating margin to 5.9% for the six months ended June 30, 2025 compared to the 6.1% realized during the six months ended June 30, 2024.
Current wording
For the nine months ended September 30, 2025, operating earnings increased by $6 million, or 5.9%, to $107 million for the nine months ended September 30, 2025 from $101 million for the nine months ended September 30, 2024. The increase was driven by increased revenue contribution and a reduction in restructuring expenditures, offset by the increased cost of germanium on our infrared programs and increased G&A and internal research and development expenditures. The net of these impacts drove operating margin to 6.6% for the nine months ended September 30, 2025 compared to the 6.9% realized during the nine months ended September 30, 2024.
Previous wording
For the three months ended June 30, 2025, bookings decreased $57 million, or 9.3%, from the three months ended June 30, 2024 to $559 million. The decrease in bookings is largely attributed to the timing of certain dismounted soldier and ground vehicle awards received in the prior year.
Current wording
For the three months ended September 30, 2025, bookings increased $72 million, or 10.5%, from the three months ended September 30, 2024 to $757 million. The increase in bookings is largely attributed to certain dismounted soldier and airborne sensing programs received during the period.
Previous wording
For the six months ended June 30, 2025, bookings increased $25 million, or 2.1%, from the six months ended June 30, 2024 to $1,228 million. The increase in new awards is largely attributed to bookings received for ground vehicle and tactical radar programs. This was partially offset by a reduction in new awards received for tactical computing programs.
Current wording
For the nine months ended September 30, 2025, bookings increased $97 million, or 5.1%, from the nine months ended September 30, 2024 to $1,985 million. The increase in new awards is largely attributed to bookings received for ground vehicle and tactical radar sensor programs coupled with additional awards received for pilot training and force protection efforts. This was partially offset by a reduction in new awards received for tactical computing and dismounted soldier sensing programs.
Previous wording
IMS segment revenue increased by $24 million, or 9.0%, to $290 million for the three months ended June 30, 2025 from $266 million for the three months ended June 30, 2024, which is attributed to increased revenue generated from our naval power programs for both submarine and surface ships.
Current wording
IMS segment revenue increased by $152 million, or 18.7%, to $964 million for the nine months ended September 30, 2025 from $812 million for the nine months ended September 30, 2024, which is attributed to increased revenue generated from our naval power programs for both submarine and surface ships.
Previous wording
IMS segment revenue increased by $54 million, or 10.2%, to $581 million for the six months ended June 30, 2025 from $527 million for the six months ended June 30, 2024, which is attributed to increased revenue generated from our naval power programs for both submarine and surface ships. On the land side, short-range air defense programs also contributed to the year over year increase.
Current wording
On the land side, force protection programs including counter drone and short-range air defense programs also contributed to the year over year increase.
Previous wording
For the three months ended June 30, 2025, operating earnings increased by $12 million, or 57.1%, to $33 million for the three months ended June 30, 2025 from $21 million for the three months ended June 30, 2024. The increase for the period is attributed to operational leverage created by the increased revenue as well as continued program improvement on our Columbia Class submarine program, offset in part by program delays on our foreign surveillance program, resulting in a net operating margin increase to 11.4% compared to the 7.9% realized during the three months ended June 30, 2024.
Current wording
For the three months ended September 30, 2025, operating earnings increased by $17 million, or 54.8%, to $48 million for the three months ended September 30, 2025 from $31 million for the three months ended September 30, 2024. The increase for the period is attributed to operational leverage created by the increased revenue as well as continued program improvement on our Columbia Class submarine program, offset in part by program delays on a surveillance program, resulting in a net operating margin increase to 12.5% compared to the 10.9% realized during the three months ended September 30, 2024.
Previous wording
For the six months ended June 30, 2025, operating earnings increased by $21 million, or 45.7%, to $67 million for the six months ended June 30, 2025 from $46 million for the six months ended June 30, 2024. The increase for the period is attributed to operational leverage created by the increased revenue output as well as continued program improvement on our Columbia Class submarine program, offset in part by program delays on our foreign surveillance program, resulting in a net operating margin increase to 11.5% compared to the 8.7% realized during the six months ended June 30, 2024.
Current wording
For the nine months ended September 30, 2025, operating earnings increased by $38 million, or 49.4%, to $115 million for the nine months ended September 30, 2025 from $77 million for the nine months ended September 30, 2024. The increase for the period is attributed to operational leverage created by the increased revenue output as well as continued program improvement on our Columbia Class submarine program, offset in part by program delays on a surveillance program, resulting in a net operating margin increase to 11.9% compared to the 9.5% realized during the nine months ended September 30, 2024.
Showing the first 40 of 45 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
These two legislative measures significantly shape the funding outlook for the DoD and have direct implications for our operations, programs and long-term strategy.
Current report — wording carried from elsewhere
The expense in the periods presented are attributed to restructuring efforts that were implemented in our ASC segment.