What changed in this filing

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Item 1. Business

2026-02-27 compared with 2025-03-03 · 95 added, 93 removed, 171 unchanged (52% of the section changed)

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provides advanced defense technology to U.S.

national security customers and allies around the world.

We specialize in the design, development and manufacture of advanced sensing, network computing, force protection and electric power and propulsion technologies and solutions.

Our innovative spirit and agility inherent in a mid-sized defense company, together with our established market position in these areas have created a foundational and diverse base of programs across the DoD.

We believe DRS is well positioned to not only support our customers in today’s mission but to also provide more autonomous, dynamic, interconnected, and multi-domain capabilities to defend against and counter evolving and emerging threats.

We view enhancement of capabilities in sensing, computing, self-protection and power as necessary to enable the strategic priorities of the DoD and our other customers.

national security customers and allied defense forces worldwide.

We specialize in the design, development, manufacture, and integration of advanced sensing, network computing, force protection, and electric power and propulsion technologies and solutions.

As a mid-sized defense technology company, our combination of operational speed and agility, deep domain expertise, and established positions on priority defense platforms has resulted in a durable and diversified portfolio of programs across the DoW.

We believe DRS is well positioned to support current operational requirements, while facilitating the DoW’s rapid transition toward more autonomous, software-enabled, interconnected, and multi-domain capabilities required to address increasingly complex and proliferating threats.

Enhancements in sensing, artificial intelligence (“AI”)-enabled computing, self-protection, and power generation and management are central to these priorities.

Demand for our technologies is concentrated in areas of sustained priority for the DoW, including counter‑unmanned aircraft systems (“C-UAS”), advanced infrared sensing, network computing, and electric power and propulsion for next generation navy vessels.

These capabilities align closely with national defense priorities such as shipbuilding, layered air and missile defense, electronic warfare, and force protection, where requirements emphasize integrated capability delivery, survivability, and program execution.

DRS benefits from an over 55-year legacy of providing innovative and differentiated products and solutions for defense applications.

From our earliest offerings to today’s best-in-class products offerings including naval propulsion, electro-optical sensors, electronic warfare systems and other mission critical technologies, we have continually sought to develop advanced technologies enabling solutions to address complex national security challenges.

From our earliest offerings to today’s best-in-class products including naval propulsion, electro-optical sensors, electronic warfare systems and other mission critical technologies, we have continually sought to develop advanced technologies enabling solutions to address complex national security challenges.

We continue to target our investments toward high growth areas of the U.S.

defense budget.

Our diverse technologies, systems and solutions are used across land, air, sea, space and cyber domains on a wide range of platforms for the DoD and the defense agencies of our international allies.

Our diverse technologies, systems and solutions are used across land, air, sea, space and cyber domains on a wide range of platforms for the DoW and the defense agencies of our international allies.

Across the spectrum of multi-domain operations, we believe our core capabilities will help the U.S.

and its allies maintain a strategic advantage over their adversaries.

Our Company consists of eight business units which are organized as two operating segments:

Advanced Sensing and Computing and Integrated Mission Systems.

Our operations and reporting are structured into the following two technology driven segments based on the capabilities and solutions offered to our customers:

Advanced Sensing and Computing (“ASC”) and Integrated Mission Systems (“IMS”).

For information regarding segment performance see Part II, Item 7, “ Management’s Discussion and Analysis of Financial Condition and Results of Operations ” in this Annual Report.

Advanced Sensing and Computing

Our Advanced Sensing and Computing (“ASC”) segment designs, develops and manufactures sensing and network computing technology that enables real-time situational awareness required for enhanced operational decision making and execution by our customers.

Our ASC segment designs, develops and manufactures sensing and network computing technology that enables real-time situational awareness required for enhanced operational decision making and execution by our customers across increasingly complex and contested operating environments.

Our sensing capabilities span numerous applications, including missions requiring advanced 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.

Our sensing capabilities are complemented by our rugged, trusted and cyber resilient network computing products.

Across our offerings, we are focused on advancing sensor range and enhancing the precision, clarity, definition, spectral depth and effectiveness of our sensors to deliver actionable information in time-sensitive mission scenarios in combination with 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 and to support integration onto a wide range of tactical platforms, including mobile and power-constrained systems.

Our sensing capabilities are complemented by our rugged, trusted and cyber resilient network edge computing products that support data processing, fusion, and dissemination at the tactical edge.

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.

These products help support the DoW’s need for greater situational understanding and faster decision-making at the tactical edge by leveraging AI 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, while supporting reduced latency, operational continuity, and interoperability through modular, open-system architectures.

Within ASC, we are increasingly combining sensing, computing, and software to support applications such as C-UAS, electronic warfare, and networked sensing, where performance depends on the ability to detect, process, and act on data in real time.

These integrated capabilities are designed to support evolving operational concepts that emphasize distributed operations, resilient communications, and decision advantage at the tactical edge.

Integrated Mission Systems

Our Integrated Mission Systems (“IMS”) segment designs, develops, manufactures and integrates power conversion, control and distribution systems, ship propulsion systems, motors and variable frequency drives, force protection systems, and transportation and logistics systems for the U.S.

Our IMS segment designs, develops, manufactures and integrates power conversion, control and distribution systems, ship propulsion systems, motors and variable frequency drives, force protection systems, and transportation and logistics systems for the U.S.

military and allied defense customers.

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electric drive submarine.

We believe DRS is well positioned to meet the needs of an increasingly electrified fleet with our high-efficiency, power dense permanent magnet motors, energy storage systems and associated efficient, rugged and compact power conversion, electrical actuation systems, and advanced cooling technologies.

We believe DRS is well positioned to meet the needs of an increasingly electrified and power-intensive fleet through high-efficiency, power-dense permanent magnet motors, energy storage systems, and associated rugged and compact power conversion, electrical actuation, and advanced thermal management technologies.

These capabilities support higher onboard power demands, improved efficiency, and enhanced platform performance across next-generation naval systems.

DRS has a long history of providing a number of other critical products to the U.S.

Navy with a significant installed base on submarines, aircraft carriers and other surface ships including motor controllers, instrumentation and control equipment, electrical actuation systems, and thermal management systems for electronics and ship stores refrigeration.

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 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.

DRS is also an integrator of complex systems in ground vehicles for short-range air defense, C-UAS, and vehicle survivability and protection.

Our short-range air defense systems integrate advanced active electronically scanned array (“AESA”) radars, EW equipment, reconnaissance and surveillance systems, mission command capabilities, modular combat vehicle turrets, and stabilized sensor suites, as well as kinetic countermeasures to protect against evolving threats.

Our force protection systems, including solutions for C-UAS, help protect personnel and defense assets from enemy combatants.

Defense Market Trends

The DoD budget is the largest defense budget in the world.

In March 2024, the U.S.

President’s fiscal year (“FY”) 2025 budget request was released and included $850 billion in base funding for national defense programs, which is largely flat over prior year levels.

Following that, the FY 2025 National Defense Authorization Act (“NDAA”) was passed by Congress late in 2024 and signed into law by the President in December 2024.

The NDAA authorizes $850 billion in defense spending, including increases in procurement, research, development, testing and engineering.

On December 21, 2024, Congress passed a continuing resolution to extend funding through March 14, 2025, allowing lawmakers more time to consider appropriations for FY 2025.

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.

Our primary customer is the U.S.

government, from which we derived 80% of our sales in 2025.

Funding for U.S.

government programs is subject to a variety of factors that can affect our business, including the President’s budget requests and procurement priorities and policies;

the annual congressional budget authorization and appropriations process;

and other U.S.

government domestic and international priorities.

government spending levels, particularly defense spending and the timing of funding can affect our financial performance over the short and long term.

The President’s Fiscal Year (“FY”) 2026 budget request was published in June 2025.

The budget request includes $848 billion in base (discretionary) funding and $113 billion in reconciliation (mandatory) funding.

The One Big Beautiful Bill Act (“OBBBA”) was signed by the President on July 4, 2025, and provides more than $150 billion in mandatory funding (including the $113 billion reconciliation funding) for national defense, available through September 30, 2029.

Separately, the National Defense Authorization Act (“NDAA”) for FY2026 was signed into law on December 18, 2025.

The NDAA authorizes $901 billion for defense, including an $8 billion increase over the President’s DoW budget request from June 2025.

On November 12, 2025, the President signed a continuing resolution to fund the U.S.

government, including the DoW, through January 30, 2026.

On January 20, 2026, Congress unveiled its final appropriations package, which included the Defense Appropriations Act conference report.

This legislation provides $839 billion in funding for the DoW, representing an $8 billion increase over the topline in the President’s DoW budget request.

On February 3, 2026, Congress passed and the President signed the Consolidated Appropriations Act, 2026, providing funding for the government through the end of the government’s FY26, including authority for defense accounts.

government is our largest customer.

Revenues derived directly or indirectly from the U.S.

government represented 79%, 80% and 84% of our total revenues for full year 2024, 2023, and 2022, respectively.

government sales are concentrated with the DoD, which constitutes the majority of our U.S.

government revenue for any given year, including the entirety of our government sales in 2024.

Our revenues with the DoD span the Navy, Army, Air Force and other DoD agencies which represented 37%, 32%, 3% and 7%, respectively, of our total revenues for 2024.

Revenues derived directly, as a prime contractor, or indirectly, as a subcontractor, from contracts with the U.S.

government represented 80%, 79% and 80% of our total revenues for 2025, 2024, and 2023, respectively.

government sales are concentrated with the DoW, which constitutes the majority of our U.S.

government revenue for any given year.

Our revenues with the U.S.

government span the Navy, Army, Air Force and other U.S.

government agencies which represented 36%, 36%, 3% and 5%, respectively, of our total revenues for 2025.

The remaining 20% of our revenues for 2025 were derived from sales to foreign governments, as well as commercial sales within the U.S.

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The principal competitive factors evaluated by customers in our markets include product performance, cost, overall value, delivery schedule, embedded positions, past performance, innovation and reputation.

As a mid-tier defense company with a diverse portfolio of technology that includes offerings at the system, sub-system and component level, we approach each market opportunity with the flexibility and agility inherent in a mid-sized defense company to provide the most value to our customers.

As a mid-tier defense technology company with a diverse portfolio of technology that includes offerings at the system, sub-system and component level, we approach each market opportunity with the flexibility and agility inherent in a mid-sized defense company to provide the most value to our customers.

We serve as either prime contractor or a subcontractor on key contracts based on the competitive dynamics of each opportunity.

We determine our prime versus subcontract position based on our competitive position, likelihood of contract win and overall profit contribution.

For 2024, our revenue consisted of 37% as a prime contractor direct with the government and 63% as a subcontractor, typically as a system provider to the platform provider.

For 2025, our revenue consisted of 39% as a prime contractor direct with the U.S.

government and 61% as a subcontractor, typically as a system provider to the platform provider.

In a prime or subcontractor position our contractual terms and conditions and profit levels are relatively consistent.

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Currently, no single contract represented more than 10% of our revenues for 2025, 2024, and 2023.

The amount of our revenues attributable to our contracts by contract type during 2024, 2023, and 2022 were as follows:

The amount of our revenues attributable to our contracts by contract type during the periods presented were as follows:

Year Ended December 31,

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Accordingly, we derive benefits from cost savings, but bear the risk of cost overruns.

price-incentive-fee contracts, if actual costs incurred in the performance of the contracts are less than estimated costs for the contracts the savings are apportioned between the customer and us.

Under fixed-price-incentive-fee contracts, if actual costs incurred in the performance of the contracts are less than estimated costs for the contracts the savings are apportioned between the customer and us.

If actual costs under such a contract exceed estimated costs, however, excess costs are apportioned between the customer and us, up to a ceiling.

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We estimate variable consideration as the most likely amount to which we expect to be entitled.

• Time-and-materials type contracts provide for reimbursement of labor hours expended at a contractual fixed labor rate per hour, plus the actual costs of material and other direct non-labor costs.

The fixed labor rates on time-and-materials type contracts include amounts for the cost of direct labor, indirect contract costs and profit.

• T&M type contracts provide for reimbursement of labor hours expended at a contractual fixed labor rate per hour, plus the actual costs of material and other direct non-labor costs.

The fixed labor rates on T&M type contracts include amounts for the cost of direct labor, indirect contract costs and profit.

Our total backlog consists of funded and unfunded amounts.

Funded backlog represents the revenue value of orders for services under existing contracts for which funding is appropriated or otherwise authorized less revenue previously recognized on these contracts.

Funded backlog represents the revenue value of orders for products and services under existing contracts for which funding is appropriated or otherwise authorized less revenue previously recognized on these contracts.

Unfunded backlog represents the revenue value of firm orders for products and services under existing contracts for which funding has not yet been appropriated less funding previously recognized on these contracts.

Our funded backlog as of the dates presented was as follows:

(Dollars in millions) 2025 2024 2023

$ 4,177 $ 3,397 $ 2,783

4,332 4,354 1,486

Total backlog (1)

$ 8,509 $ 7,751 $ 4,269

________________

(1) See Part I Item 1A, “ Risk Factors—Risks Relating to Our Business—We may not realize the full value of our total estimated contract value or bookings, including as a result of reduction of funding or cancellation of our U.S.

government contracts, which could have a material adverse impact on our business, financial condition and results of operations ” in this Annual Report.

Funded backlog $ 4,643 $ 4,177 $ 3,397

Materials, Manufacturing and Suppliers

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If a supplier should cease to deliver such components, generally, but not in all cases, we would expect that other sources would be available;

however, added

cost and manufacturing delays might result.

however, added cost and manufacturing delays might result.

We have experienced delays attributable to supply shortages, including but not limited to germanium, as well as other raw materials.

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Research and Development

We conduct research and development (“R&D”) activities using our own funds (referred to as company-funded R&D or independent research and development (“IR&D”)) and under contractual arrangements with our customers (referred to as customer-funded R&D) to enhance existing products and services and to develop future technologies.

We conduct research and development (“R&D”) activities using our own funds (referred to as company-funded independent research and development (“IR&D”)) and under contractual arrangements with our customers (referred to as customer-funded R&D) to enhance existing products and services and to develop future technologies.

R&D costs include basic research, applied research, concept formulation studies, design, development, and related test activities.

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R&D costs are expensed as incurred.

Company-funded R&D costs charged to general and administrative expenses totaled $92 million, $82 million and $58 million in 2024, 2023 and 2022, respectively.

IR&D costs charged to general and administrative expenses totaled $129 million, $92 million and $82 million in 2025, 2024 and 2023, respectively.

The increase in IR&D is focused on accelerating capabilities into the hands of the warfighter in a dynamic threat environment.

Intellectual Property

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We have patents on certain of our technologies and methods, semiconductor devices, rugged computer-related items and electro-optical and infrared focal plane array products, in addition to other technologies and methods.

We and our subsidiaries have certain registered trademarks, none of which are considered material to our current operations.

We and our subsidiaries also have certain registered trademarks and copyrights.

We also hold certain trade secrets without formal patent filings when we deem it most appropriate to do so, including in order to protect them from disclosure.

We do not believe that the conduct of our business as a whole is materially dependent on any single patent, trade secret, trademark or copyright.

We also license intellectual property to third parties for certain markets.

believe that the conduct of our business as a whole is materially dependent on any single patent, trade secret, trademark or copyright.

When we work on U.S.

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government, this requires us to have sufficient contracting leverage and to take timely affirmative measures to preserve our right.

In addition, in some cases the US government is empowered to unilaterally use, or allow our competitors to use, patented technologies, subject only to the obligation to pay reasonable compensation.

In addition, in some cases the U.S.

government is empowered to unilaterally use, or allow our competitors to use, patented technologies, subject only to the obligation to pay reasonable compensation.

Human Capital

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As of December 31, 2025, our workforce included approximately 7,300 employees of which approximately 500 (or 7%) were represented by labor unions.

We continuously strive to maintain a culture that fosters and

rewards growth, agility, problem-solving, innovation and operational excellence.

We continuously strive to maintain a culture that fosters and rewards growth, agility, problem-solving, innovation and operational excellence.

Our engineers work on programs that require advanced technology, such as sensing, electro-optical infrared systems, laser systems, network computing, cyber, communications systems, integration and power propulsion.

Some of our employees maintain security clearances which allows us to conduct business activities for our customers’ classified programs.

Our people are committed to upholding the Company’s core values of integrity;

We are committed to upholding the Company’s core values of integrity;

customer focus;

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Our employees receive annual compliance training and must formally confirm their commitment to upholding the standards set forth in our Code and ethics program.

We recognize that our success depends on our ability to attract, develop and retain a qualified workforce.

To accomplish this, we have comprehensive talent acquisition and talent management programs established to attract and retain our employees.

We recognize and reward the performance of our employees and provide market-based and competitive compensation.

We offer an expansive suite of benefits for our employees and their families to support their physical, emotional and financial well-being.

We believe our success depends on attracting, developing, and retaining a highly qualified workforce.

To support this, we maintain comprehensive talent acquisition and talent management programs designed to attract and retain employees.

We recognize and reward employee performance through market-competitive compensation and by providing a broad suite of benefits that support the physical, emotional and financial well-being of our employees and their families.

Maintaining a safe work environment for our employees is of utmost importance.

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Emphasis is placed on encouraging safe behaviors and creating a culture of continuous improvement to minimize or eliminate workplace incidents and illnesses.

Our strong commitment to employee and leadership development, talent management, and succession planning ensures our workforce is prepared for the critical skills necessary for the work today and for future opportunities.

We are developing our current leaders and preparing the next generation of leaders to demonstrate behaviors and attributes that are aligned with our core values.

We work to develop bench strength for our leadership team and other critical roles.

Our mission and core values are the driving force behind our actions to maintain an engaged and motivated workforce.

We continuously strive to deliver employee programs that support employee performance, development, well-being, and health and safety.

In addition, we are actively engaged in supporting our local communities, active military and their families, and veterans through our charitable giving, employer matching and volunteerism programs.

Our strong commitment to employee and leadership development, talent management, and succession planning ensures our workforce is equipped with the critical skills required for today’s work and future opportunities.

We invest in developing current leaders and preparing the next generation of leaders to demonstrate behaviors and attributes aligned with our core values, while proactively building bench strength for leadership and other critical roles.

Our mission and core values guide our actions in supporting an engaged and motivated workforce.

We continuously strive to deliver programs that promote performance, development, well-being, and

health and safety.

We also support our local communities, active military members and their families, and veterans through our charitable giving, employer matching and volunteerism programs.

Joint Ventures, Strategic Investments and Mergers and Acquisitions

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We also may explore the divestiture of businesses that no longer meet our needs or strategy or that could perform better outside of our organization.

On June 21, 2022, the Company entered into a definitive agreement with RADA Electronic Industries Ltd.

(“RADA”), a leading provider of advanced software-defined military tactical radars, to merge and become a combined public company.

On November 28, 2022 the merger was completed and RADA became a wholly-owned subsidiary of Leonardo DRS.

As a result of the merger, we now hold an approxima tely 10% interest i n RadSee Technologies Ltd.

an early-stage radar technology company organized in Israel.

On March 21, 2022, the Company entered into a definitive agreement to sell its Global Enterprise Solutions business to SES Government Solutions, Inc.

The transaction was completed on August 1, 2022 and resulted in net cash proceeds of $427 million after net working capital adjustments.

On April 19, 2022 we entered into a definitive sales agreement to divest our share of our current equity investment in Advanced Acoustic Concepts LLC to Thales Defense & Security, Inc., the minority partner in this joint venture.

The transaction was completed on July 8, 2022 and resulted in proceeds of $56 million.

We also hold an approximately 11% interest in Hoverfly Technologies, Inc.

We hold an approximately 25% interest in Hoverfly Technologies, Inc.

(“Hoverfly”), which designs, develops and manufactures power-tethered unmanned aerial systems and related products.

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government, any of which could have a material adverse effect on our business, financial condition and results of operations.

See Part I Item 1A, “ Risk Factors—Risks Relating to Our Business—We are subject to a number of procurement, international trade, and other rules, regulations and requirements related to our industry, our products, and the businesses we operate.

and the businesses we operate.

If we fail to comply with such rules, regulations or other requirements we may be subject to civil and/or criminal penalties and/or administrative sanctions ” in this Annual Report.

We (including our subcontractors and others with whom we do business) are also subject to, and expected to perform in compliance with, a vast array of federal, state, local and international laws,

regulations and requirements related to our industry, our products and the businesses we operate.

We (including our subcontractors and others with whom we do business) are also subject to, and expected to perform in compliance with, a vast array of federal, state, local and international laws, regulations and requirements related to our industry, our products and the businesses we operate.

These laws and regulations include, but are not limited to, the Anti-Kickback Act, the Arms Export Control Act, including the ITAR, the Communications Act, the Defense Federal Acquisition Regulation Supplement, the Export Control Reform Act, including the EAR (which includes anti-boycott provisions), the False Claims Act, the Federal Acquisition Regulation, the FCPA, the Lobbying Disclosure Act, the Procurement Integrity Act, the Truthful Cost or Pricing Data Act, the Foreign Trade Regulations, the Foreign Investment Risk Review Modernization Act, the International Emergency Economic Powers Act, the Trading with the Enemy Act, and Executive Orders and regulations, administered by the U.S.

Department of the Treasury, Office of Foreign Assets Control, as well as rules and regulations administered by the U.S.

Department of the Treasury, DoW, Office of Foreign Assets Control, as well as rules and regulations administered by the U.S.

Customs and Border Protection and the Bureau of Alcohol, Tobacco, Firearms and Explosives.

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Governance Structure

defense contractor with high level personnel and facility security clearances, DRS, our immediate majority stockholder US Holding, LLC and our indirect majority stockholder Leonardo S.p.A.

have entered into a proxy agreement with the DoD to mitigate against the potential for undue foreign ownership control and influence (“FOCI”) on the performance of classified programs by implementing various limitations on US Holding’s and Leonardo S.p.A.’s rights as the direct foreign majority stockholder of DRS, respectively.

defense contractor with high level personnel and facility security clearances, DRS, our immediate majority stockholder, US Holding, and our indirect majority stockholder, Leonardo S.p.A,.

have entered into an amended and restated proxy agreement with the DoW to mitigate against the potential for undue foreign ownership control and influence (“FOCI”) on the performance of classified programs by implementing various limitations on US Holding’s and Leonardo S.p.A.’s rights as the direct foreign majority stockholder of DRS, respectively.

Specifically, US Holding has authorized certain cleared U.S.

persons to operate as its proxies and exercise the key prerogatives of stock ownership.

We are currently operating under an interim proxy agreement while we seek to enter into a new proxy agreement with the DoD.

The proxy agreement requires that DRS have the financial and operational ability to operate as an independent entity under an independent Board, subject to certain limited, enumerated consent rights of the majority stockholder (including material mergers and acquisitions and incurrence of debt).

See Part I Item 1A, “ Risk Factors—Risks Relating to Our Ownership and Status under the Proxy Agreement — We operate under a proxy agreement with the DoD that regulates significant areas of our governance.

If we fail to comply with the proxy agreement our classified U.S.

The amended and restated proxy agreement requires that DRS have the financial and operational ability to operate as an independent entity under an independent Board of Directors (“Board”), subject to certain limited, enumerated consent rights of the majority stockholder (including material mergers and acquisitions and incurrence of debt).

See Part I Item 1A, “ Risk Factors—Risks Relating to Our Ownership and Status under the Amended and Restated Proxy Agreement — We operate under an amended and restated proxy agreement with the DoW that regulates significant areas of our governance.

If we fail to comply with the amended and restated proxy agreement our classified U.S.

government contracts could be terminated, which could have a material adverse impact on our business, financial condition and results of operations ” in this Annual Report.

At all times subject to the proxy agreement, on November 28, 2022, the Company entered into a registration rights agreement (the “Registration Rights Agreement”) as well as a cooperation agreement (the “Cooperation Agreement”) with Leonardo S.p.A and US Holding.

At all times subject to the amended and restated proxy agreement, on November 28, 2022, the Company entered into a registration rights agreement (the “Registration Rights Agreement”) and on June 18, 2025, a cooperation agreement (the “Cooperation Agreement”) with Leonardo S.p.A and US Holding.

The Registration Rights Agreement, among other things, provides Leonardo S.p.A.

and its affiliated entities with customary demand, shelf and piggy-back registration rights to facilitate a public offering of the Company Common Stock held by US

and its affiliated entities with customary demand, shelf and piggy-back registration rights to facilitate a public offering of the Company Common Stock held by US Holding.

Under the Cooperation Agreement, among other things, (a) Leonardo S.p.A.

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Organized into five business Sectors, Leonardo S.p.A.

has a significant industrial presence in Italy, the United Kingdom, Germany, Poland, Switzerland and the USA, where it operates through subsidiaries, joint ventures and partnerships, including GIE ATR, MBDA, Telespazio, Thales Alenia Space, and Hensoldt AG.

has a significant industrial presence in Italy, the United Kingdom, Germany, Poland, Switzerland and the USA, where it operates through subsidiaries, joint ventures and associates, including GIE ATR, MBDA, Telespazio, Thales Alenia Space, and Hensoldt AG.

Leonardo S.p.A.

competes internationally by leveraging its areas of technological and product leadership (Helicopters, Defense Electronics & Security, Aircraft, Aerostructures and Space).

competes internationally by leveraging its areas of technological and product leadership (Helicopters, Defense Electronics & Security, Cyber & Security Solutions, Aeronautics and Space).

Listed on the Milan Stock Exchange (under the trading symbol “LDO”), in 2024 Leonardo S.p.A.

recorded preliminary consolidated revenues of €17.8 billion and invested €2.5 billion in R&D.

recorded consolidated revenues of €17.8 billion and invested €2.5 billion in R&D.

The group has been part of the Dow Jones Sustainability Index (“DJSI”) since 2010 and was again named as sustainability global leader in the Aerospace & Defense sector of DJSI in 2024.

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Our website is https://www.leonardodrs.com.

We make available on our website, free of charge, the regular and periodic reports that we file with or furnish to the SEC, as well as amendments to those reports, as soon as reasonably practicable after such reports are filed with or furnished to the SEC.

We make available on our website, free of charge, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K that we file with or furnish to the SEC, as well as amendments to those reports, as soon as reasonably practicable after such reports are filed with or furnished to the SEC.

We are not including the information contained in our website as part of, or incorporating it by reference into, this Annual Report.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business