DRS

Leonardo DRS is a focused defense-technology provider in high-priority areas — advanced sensing, network edge computing, force protection, and electric power/propulsion — selling principally to the U.S. Navy and Army (each ~36% of revenue) and allied governments. The growth profile is excellent and accelerating: FY2025 revenue rose 12.8% to $3.65B, gross profit climbed 18.1% to $869M (gross margin 23.8%), operating income rose 18.8% to $348M, and net income jumped 30.5% to $278M ($1.03 diluted EPS, +28.7%). Crucially, growth is high-quality cash: operating cash flow rose 35.1% to $366M, and the balance sheet is conservative with only $348M long-term debt against $647M cash and $2.73B equity.

The company is investing aggressively to sustain that trajectory — R&D was up 40.2% to $129M and capex up 63.5% to $139M — building positions in AI-enabled edge computing (its SAGEcore architecture), counter-UAS, electronic warfare, and next-generation electric ship propulsion. These map directly onto the Department of War's stated priorities around distributed, multi-domain operations, giving DRS durable secular demand and a diversified program base that, by design, is less exposed to any single platform decision.