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Leonardo DRS, Inc.
Leonardo DRS builds electronics, sensors, and combat systems for the U.S. military and its allies.
Leonardo DRS is a defense contractor that makes the electronics and hardware that go inside military gear. It doesn't build whole tanks or fighter jets. Instead, it builds the pieces that make those platforms work: thermal sights that let soldiers see in the dark, computers and communications systems that let vehicles and troops share information, and power and propulsion equipment for ships and combat vehicles. Its customers are overwhelmingly governments — mainly the U.S. Department of Defense — along with allied militaries and, to a smaller degree, commercial buyers.
The business splits into two main parts. One is advanced sensing and computing: imaging sensors, infrared cameras, ruggedized computers, and the electronics that turn raw sensor data into something a soldier or a commander can actually use. The other is integrated mission systems: shipboard power and propulsion, vehicle electronics, and network systems that tie together sensors, weapons, and communications on a battlefield. Picture a modern warship or armored vehicle — a lot of the unseen gear that makes it function comes from companies like this one. Its edge comes from being an incumbent supplier on long-running military programs. Once a system is designed into a ship or vehicle, it tends to stay there for decades, generating steady follow-on orders and maintenance work. That gives the company a durable backlog of booked future revenue, which is the lifeblood of defense contractors. The tradeoff is that it is deeply dependent on government budgets and the politics of defense spending. It also competes with much larger players like RTX, Lockheed Martin, and Northrop Grumman, and with L3Harris in military electronics.
Leonardo DRS is majority-owned by Italy's Leonardo S.p.A., a big European defense group, which spun a stake of the company onto Nasdaq in 2022 while keeping control. That relationship matters: it gives DRS access to European markets and technology, but it also means public shareholders own a minority of a company whose parent calls the shots. The company's fortunes rise and fall with defense budgets, major program wins, and the global demand for military equipment — a business that is steady in good times and, unfortunately, often steadier when the world feels dangerous.
Saved answer · last researched 9 Nov 2026
BIG PICTURE
Leonardo, the Italian parent, owns 71.1% of this U.S. defense contractor.
- 71.1% Leonardo S.p.A. (Italian parent)
- 28.9% Public shareholders
Leonardo DRS sells sensors and combat electronics to the U.S. military, yet its Italian parent, Leonardo S.p.A., holds 71.1% of the shares through 189.7 million shares. That leaves only about 29% trading publicly. For a beginner, it means outside investors own a small slice of a company whose biggest decisions sit with one European owner. Source: AInvest, data from 2026
Timeline
Two Engineers Start DRS
Leonard Newman and David Gross were engineers at Loral Corporation, working on signal processing for anti-submarine warfare. When Loral decided to chase other technology, the two men left and founded DRS to keep their research alive. That bet paid off: their work led to the AN/SQR-17 passive submarine detection system, a product still in use today.
DRS Goes Public
By 1981, DRS had grown enough to sell shares to the public, giving it a new source of money to fund its ambitions. A few years later it bought its first company, setting a pattern: buy businesses to grow faster than building them from scratch.
A $500 Million Goal
In 1994, DRS was a small player with only $58 million in sales, but it set an ambitious target: become a mid-tier defense contractor with $500 million in sales. Mark Newman took over as president and CEO and went shopping, buying company after company. Sales reached $391 million by 2000 and blew past $1 billion by 2004 — the goal was not just met but smashed.
Finmeccanica Buys DRS
The growth caught the eye of Italy's Finmeccanica (now Leonardo S.p.A.), which bought DRS in a deal valuing the company at $5.2 billion including debt. DRS became the U.S. arm of an Italian defense giant and stopped trading as its own independent stock.
A Pentagon Veteran Takes Over
In 2012, William J. Lynn III, former U.S. Deputy Secretary of Defense, replaced Mark Newman, who had led the company since 1994. Lynn narrowed the company's focus to a few areas where it could stand out: advanced sensing, network computing, force protection, and electric power and propulsion.
The IPO That Fell Apart
Leonardo tried to take DRS public again in 2021, selling about 22% of the company on the NYSE to raise up to $702 million. But the market turned unfriendly — investors worried about cuts to U.S. military spending and did not value the company highly enough. The offering was pulled and put on hold until markets improved.
The Rada Merger
The public markets would have to wait. In 2022, DRS completed an all-stock merger with Israel-based Rada Electronic Industries, creating a $3 billion company with a new name, Leonardo DRS. The deal added market-leading tactical radars and achieved what the failed IPO could not: the company began trading on Nasdaq, with Leonardo S.p.A. keeping 80.5% ownership.
Lynn Retires
In 2025, William J. Lynn III retired after fourteen years as CEO, and the board named COO John Baylouny to succeed him, effective the start of 2026. Baylouny had spent more than 35 years at the company. Lynn's legacy: he had transformed DRS into a technology-driven business and returned it to public markets.
DRS Buys Raft
Under its new leader, DRS agreed to buy Raft, a McLean-based mission software provider, for $450 million in cash. Raft's open-architecture software and AI skills fit neatly with DRS's sensing and computing hardware, pushing the company toward selling complete hardware-and-software solutions. The deal was expected to close late in 2026 and add a couple of percentage points to revenue growth the following year.