Shares of Leonardo DRS, Inc. (DRS) surged 5.05% in pre-market trading on Wednesday following the release of its impressive third-quarter 2025 financial results, announcement of a CEO transition, and upward revision of its full-year guidance.

The defense technology company reported a 18% year-over-year increase in revenue to $960 million, surpassing the analyst consensus estimate of $924.8 million. Adjusted earnings per share (EPS) came in at $0.29, beating expectations of $0.28 and marking a 21% increase from the same period last year. The strong performance was driven by robust demand across various segments, including counter UAS systems, electric power and propulsion, naval network computing, and advanced infrared sensing programs.

In addition to the stellar financial results, Leonardo DRS announced a significant leadership change. William J. Lynn will retire as Chairman and CEO, effective January 1, 2026. John Baylouny, the current Chief Operating Officer, will succeed Lynn as President and CEO, while Frances Fragos Townsend has been elected as the new Board Chair. This transition appears to have been well-received by investors, contributing to the stock's pre-market rally.

Further boosting investor confidence, the company revised its full-year 2025 guidance upward. Leonardo DRS now expects revenue in the range of $3.55 billion to $3.6 billion, up from the previous guidance of $3.53 billion to $3.6 billion. The company maintained its adjusted EBITDA guidance at $437 million to $453 million while lowering its expected tax rate to 18% from 19%.

The combination of strong quarterly results, smooth leadership transition, and improved outlook has clearly resonated with investors, driving the significant pre-market stock price increase. As the market opens, all eyes will be on Leonardo DRS to see if this momentum can be sustained throughout the trading session.