Financial Data and Key Metrics Changes - In Q4 2024, revenue was $981 million, a 6% year-over-year increase, while full-year revenue reached $3.2 billion, representing a 14% organic growth over 2023 [40][41] - Adjusted EBITDA for Q4 was $148 million, up 13% year-over-year, and for the full year, it was $400 million, reflecting a 23% increase [42][43] - Diluted EPS and adjusted diluted EPS increased by 18% and 23% year-over-year in Q4, respectively, and for the full year, they rose by 25% and 27% [45][46] - Free cash flow for Q4 was robust at $416 million, leading to a total of $190 million for the full year [46][47] Business Line Data and Key Metrics Changes - Advanced Sensing and Computing segment revenue grew by 9% in Q4 and 16% for the full year, while Integrated Mission Systems segment revenue decreased slightly by 1% in Q4 but increased by 11% for the full year [41][44] - Adjusted EBITDA for the Advanced Sensing and Computing segment increased by 9% in Q4 and 22% for the full year, while the Integrated Mission Systems segment saw a 24% increase in Q4 and 27% for the full year [44] Market Data and Key Metrics Changes - International revenue rose to 13% in 2024, marking the fourth consecutive year of increased international business [30] - The company secured over $4 billion in contract awards throughout the year, resulting in a 1.3% book-to-bill ratio for both Q4 and the year [10][11] Company Strategy and Development Direction - The company plans to increase investments in R&D and capital expenditures by approximately 25% year-over-year, focusing on advanced sensing modalities, directed energy capabilities, and AI applications [12][51] - The company maintains a strong focus on execution excellence and aims to drive innovation and capability to meet customer needs while generating value for shareholders [19][38] Management's Comments on Operating Environment and Future Outlook - The management highlighted an elevated global threat environment, which is expected to drive continued defense investment from the US and allied nations [13][14] - The company anticipates 2025 to be another strong year, with revenue guidance set between $3.425 billion and $3.525 billion, implying 6% to 9% organic growth [48][49] Other Important Information - The company announced a cash dividend of $0.09 per share and a share buyback program totaling $75 million over the next two years [35][36] - The new facility in Charleston, South Carolina, is expected to enhance capabilities in steam turbine systems and support the Columbia class program [26][27] Q&A Session Summary Question: Impact of Doge effort on the company - Management indicated that the Doge effort has not yet reached the Department of Defense and remains focused on the new administration's strategic priorities [60] Question: Clarification on one-off items in Q4 - The CFO explained that the adjustments were primarily due to currency shifts affecting balance sheet items [63] Question: Margin targets for 2026 and other contributing areas - Management noted that smaller sensing and force protection programs transitioning from development to production phases would contribute to margin improvements alongside the Columbia program [68][69] Question: Status of KDDX and DDGX programs - Management confirmed ongoing engagement with the Korean customer for KDDX and noted growing interest in electric propulsion for DDGX [79][80] Question: Concerns about raw material supply - The CFO stated that while germanium remains a focus, overall supply chain stability has improved, with no significant concerns outside of germanium [85][86] Question: Implications of potential budget cuts - Management expressed confidence in their balanced exposure across services and highlighted growth areas in counter UAS and AI-supported computing [92][94] Question: Foreign military sales impact due to geopolitical tensions - Management noted a slight increase in revenue from Ukraine but anticipated a tapering off as negotiations progress, while European demand for American systems may rise [111][112]

Financial Performance - Full Year 2024 - The company achieved full year 2024 organic revenue growth of 14%[7], reaching $3.234 billion[12] - Adjusted EBITDA grew by 23% to $400 million[7, 12], with a margin expansion of 90 bps to 12.4%[7, 12] - Adjusted Net Earnings increased by 28% to $249 million[12] - Adjusted Diluted EPS increased by 27% to $0.93[12] Financial Performance - Q4 2024 - Q4 2024 revenue increased by 6% to $981 million[9] - Adjusted EBITDA grew by 13% to $148 million[9], with a margin expansion of 100 bps to 15.1%[9] - Adjusted Net Earnings increased by 22% to $101 million[9] - Adjusted Diluted EPS increased by 23% to $0.38[9] Bookings and Backlog - Total backlog reached a new company record of $8.5 billion[7, 9] - Bookings for Q4 2024 were $1.3 billion, and $4.1 billion for the full year, representing a 1.3x book-to-bill ratio for both periods[7] 2025 Guidance - The company projects 2025 organic revenue growth of 6% to 9%, resulting in revenue between $3.425 billion and $3.525 billion[7, 14] - Adjusted EBITDA growth is expected to exceed topline growth at 9% to 14%, leading to an Adjusted EBITDA between $435 million and $455 million[7, 14] - Adjusted Diluted EPS is projected to be between $1.02 and $1.08, representing a 10% to 16% increase[14]

Core Insights - Leonardo DRS, Inc. reported revenue of $981 million for the quarter ended December 2024, reflecting a year-over-year increase of 5.9% [1] - The earnings per share (EPS) for the quarter was $0.38, up from $0.31 in the same quarter last year, indicating a positive trend in profitability [1] - The reported revenue exceeded the Zacks Consensus Estimate of $942.62 million by 4.07%, and the EPS also surpassed the consensus estimate of $0.36 by 5.56% [1] Financial Performance Metrics - Revenue from the IMS segment was $326 million, slightly below the average estimate of $329.20 million from three analysts [4] - Revenue from the ASC segment was $660 million, exceeding the average estimate of $619.13 million from three analysts [4] - Adjusted EBITDA for the IMS segment was $46 million, surpassing the estimated $44.69 million, while the ASC segment's adjusted EBITDA was $102 million, above the average estimate of $96.86 million [4] Stock Performance - Over the past month, shares of Leonardo DRS, Inc. have declined by 20.2%, contrasting with a 2.6% increase in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

分组1 - Leonardo DRS, Inc. reported quarterly earnings of $0.38 per share, exceeding the Zacks Consensus Estimate of $0.36 per share, and up from $0.31 per share a year ago, representing an earnings surprise of 5.56% [1] - The company achieved revenues of $981 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 4.07%, compared to $926 million in the same quarter last year [2] - Over the last four quarters, Leonardo DRS has consistently surpassed consensus EPS and revenue estimates [2] 分组2 - The stock has underperformed, losing about 8.6% since the beginning of the year, while the S&P 500 has gained 4.5% [3] - The current consensus EPS estimate for the upcoming quarter is $0.18 on revenues of $756.87 million, and for the current fiscal year, it is $1.07 on revenues of $3.43 billion [7] - The Aerospace - Defense Equipment industry is currently ranked in the bottom 49% of over 250 Zacks industries, which may impact the stock's performance [8]

Financial Performance - Revenue for Q4 2024 was $981 million, a 6% increase from Q4 2023, and full year revenue reached $3.234 billion, up 14% year-over-year[4]. - Net earnings for Q4 2024 were $89 million, a 20% increase compared to Q4 2023, with full year net earnings of $213 million, reflecting a 27% growth[4]. - Adjusted EBITDA for Q4 2024 was $148 million, a 13% increase from Q4 2023, and full year adjusted EBITDA was $400 million, up 23% year-over-year[4]. - Gross profit for the year ended December 31, 2024, was $736 million, up 13.5% from $648 million in 2023[31]. - Net earnings for the year increased to $213 million, representing a 26.8% rise from $168 million in 2023[31]. - Basic earnings per share rose to $0.81 for the year, compared to $0.64 in 2023, marking a 26.6% increase[31]. - Adjusted Net Earnings for the twelve months ended December 31, 2024, reached $249 million, compared to $194 million in 2023, reflecting a 28.4% increase[43]. - Diluted EPS for the twelve months ended December 31, 2024, was $0.80, up from $0.64 in 2023, marking a 25% increase[43]. Bookings and Backlog - Bookings for Q4 2024 totaled $1.27 billion, with a book-to-bill ratio of 1.3, and full year bookings reached $4.077 billion, also with a ratio of 1.3[14]. - The backlog at year-end 2024 was $8.5 billion, representing a 10% increase from the previous year[6]. Cash Flow and Capital Expenditures - Net cash provided by operating activities for the year was $271 million, compared to $205 million in 2023, indicating a 32.1% increase[36]. - Free Cash Flow for Q4 2024 was $416 million, down from $494 million in Q4 2023, indicating a decrease of 15.8%[45]. - The company reported a net cash provided by operating activities of $443 million for Q4 2024, compared to $515 million in Q4 2023, a decrease of 13.9%[45]. - Capital expenditures for the year totaled $85 million, up from $60 million in 2023, representing a 41.7% increase[36]. - Capital expenditures for the twelve months ended December 31, 2024, totaled $85 million, an increase from $60 million in 2023, representing a 41.7% rise[45]. Assets and Liabilities - Total assets as of December 31, 2024, were $4,184 million, up from $3,921 million in 2023, reflecting a 6.7% growth[34]. - Cash and cash equivalents increased to $598 million from $467 million, a 27.9% increase year-over-year[34]. - The company reported a decrease in long-term debt to $340 million from $349 million, a reduction of 2.6%[34]. - Contract liabilities increased to $399 million from $335 million, reflecting a 19.1% rise year-over-year[34]. Segment Performance - The Advanced Sensing and Computing segment reported revenues of $660 million for Q4 2024, a 9% increase from Q4 2023, and $2.118 billion for the full year, up 16%[16]. - The Integrated Mission Systems segment achieved adjusted EBITDA margin growth to 14.1% in Q4 2024, a 290 basis points increase from the prior year[18]. Dividends and Stock Repurchase - A cash dividend of $0.09 per common share was declared, payable on March 27, 2025[12]. - A stock repurchase program was authorized for up to $75 million of common stock, commencing in March 2025[13]. Other Financial Metrics - The income tax provision for Q4 2024 was $22 million, slightly up from $21 million in Q4 2023, indicating a 4.8% increase[41]. - Restructuring costs for the twelve months ended December 31, 2024, were $8 million, down from $11 million in 2023, showing a decrease of 27.3%[41]. - The company experienced a decrease in interest expense, which fell to $4 million in Q4 2024 from $9 million in Q4 2023, a reduction of 55.6%[41].

Core Viewpoint - Leonardo DRS, Inc. is positioned as a strong investment opportunity within the Zacks Aerospace Defense Equipment industry due to its robust backlog, increasing earnings estimates, and effective debt management [1] Growth Projections & Surprise History - The Zacks Consensus Estimate for DRS' 2025 earnings per share (EPS) has risen by 0.9% to $1.07 per share over the past 60 days [2] - Total revenue for DRS in 2025 is projected at $3.43 billion, reflecting a year-over-year growth of 7.4% [2] - The company's long-term earnings growth rate is estimated at 21.2%, with an average earnings surprise of 22.27% over the last four quarters [2] Debt Position - DRS has a total debt to capital ratio of 12.92%, significantly lower than the industry average of 54.03% [3] - The times interest earned (TIE) ratio for DRS at the end of Q3 2024 was 10.5, indicating strong capability to meet interest obligations [3] Liquidity - The current ratio for DRS at the end of Q3 2024 was 2.11, surpassing the industry average of 1.43, demonstrating the company's ability to cover short-term liabilities [4] Rising Backlog - DRS' total backlog as of September 30, 2024, increased by 75.1% to $8.26 billion compared to the same quarter last year, primarily driven by a multi-boat contract with the U.S. Navy for electric propulsion activities on the Columbia Class submarine program [5] Stock Price Performance - Over the past six months, DRS shares have increased by 27.2%, outperforming the industry's growth of 18.4% [6]

Company Performance - Leonardo DRS, Inc. has returned 72% year-to-date, significantly outperforming the average return of 2.3% for Aerospace companies [4] - The Zacks Consensus Estimate for DRS' full-year earnings has increased by 8.6% over the past three months, indicating improved analyst sentiment and a stronger earnings outlook [4] - Leonardo DRS, Inc. currently holds a Zacks Rank of 1 (Strong Buy), reflecting its favorable characteristics for outperforming the market [3] Industry Context - Leonardo DRS, Inc. is part of the Aerospace - Defense Equipment industry, which includes 23 companies and has gained approximately 32.6% year-to-date [6] - The Aerospace sector, which includes 46 individual stocks, currently holds a Zacks Sector Rank of 6, indicating its relative performance compared to other sectors [2] - Another notable performer in the Aerospace sector is Mercury Systems (MRCY), which has increased by 9.4% year-to-date and has a Zacks Rank of 2 (Buy) [5][6]

Company Overview - Leonardo DRS, Inc. currently holds a Momentum Style Score of B, indicating potential for strong performance in the momentum investing strategy [3] - The company has a Zacks Rank of 1 (Strong Buy), which is associated with a historical track record of outperforming the market [4] Price Performance - Over the past week, shares of DRS have increased by 19.11%, significantly outperforming the Zacks Aerospace - Defense Equipment industry, which rose by 4.86% during the same period [6] - In a longer time frame, DRS shares have gained 22.34% over the past quarter and 85.97% over the last year, while the S&P 500 has only increased by 9.45% and 33.9%, respectively [7] Trading Volume - The average 20-day trading volume for DRS is currently 719,897 shares, which serves as a useful baseline for assessing price movements [8] Earnings Outlook - In the past two months, four earnings estimates for DRS have been revised upwards, with no downward revisions, leading to an increase in the consensus estimate from $0.84 to $0.90 [10] - For the next fiscal year, four estimates have also moved upwards without any downward revisions, indicating positive sentiment regarding future earnings [10]

Growth stock Leonardo DRS, Inc. (NASDAQ: DRS ) has had a year of rapidly rising share prices, a whopping 79.59%. And that obviously leads to the question: Will it continue to grow profitably or will this uptrendRobert F. Abbott has been investing his family’s accounts since 1995, and in 2010 added options, mainly covered calls and collars with long stocks. He is a freelance writer, and his projects include a website that provides information for new and intermediate-level mutual fund investors. A resident o ...

Core Viewpoint - November is expected to be a strong month for stocks, driven by interest rate cuts and increased consumer spending, despite potential volatility from the upcoming presidential election. Investors are encouraged to focus on stocks with earnings acceleration [1]. Earnings Acceleration - Earnings acceleration refers to the incremental growth in a company's earnings per share (EPS), indicating a rise in quarter-over-quarter earnings growth rates within a specific timeframe [3]. - Stocks that exhibit earnings acceleration are often undervalued and can lead to significant price rallies once investors take notice [4]. Importance of Earnings Growth - A consistent increase in earnings growth percentage suggests a fundamentally sound company, while stagnant or declining growth can indicate potential price declines [5]. Screening Parameters - The screening process involves identifying stocks where the last two quarter-over-quarter EPS growth rates exceed previous periods, with projected growth rates also expected to be higher [6][7][8]. - Additional criteria include a current stock price of at least $5 and an average 20-day trading volume of 50,000 or more to ensure liquidity [8]. Selected Stocks - **Snap Inc. (SNAP)**: A mobile camera app with a Zacks Rank of 2 (Buy) and an expected earnings growth rate of 166.7% for the current year [9]. - **GeneDx Holdings Corp. (WGS)**: A healthcare pioneer in genome testing, currently holding a Zacks Rank of 1, with an expected earnings growth rate of 95.4% [10]. - **Leonardo DRS, Inc. (DRS)**: A defense product manufacturer with a Zacks Rank of 2 and an expected earnings growth rate of 21.9% for the current year [11].