v3.26.1
Segment Information
 3 Months Ended
Mar. 31, 2026
Segment Reporting [Abstract]  
Segment Information Segment Information
Operating segments represent components of an enterprise for which separate financial information is available that is regularly reviewed by the CODM in determining how to allocate resources and assess performance. The Company’s operating and reportable segments consist of ASC and IMS. All other operations, which consists primarily of DRS corporate headquarters and certain non-operating subsidiaries of the Company, are grouped in Corporate & Eliminations.
The CODM primarily uses operating earnings to manage the Company and allocate resources. Operating earnings is used to facilitate a comparison of the ordinary, ongoing and customary course of our operations on a consistent basis from period to period and provide an additional understanding of factors and trends affecting our business segments.
Certain information related to our segments for the periods ended March 31, 2026 and 2025 is presented in the following tables. Consistent accounting policies have been applied by all segments within the Company, within all reporting periods. Intersegment sales are generally transferred at cost to the buying segment, and the sourcing segment does not recognize a profit. Such intercompany operating earnings is eliminated in consolidation, so that the Company’s total revenues and operating earnings reflect only those transactions with external customers.
Revenues, expenses, and operating earnings by segment and the reconciliation to earnings before taxes for the periods ended March 31, 2026 and 2025 consists of the following:
Three Months Ended March 31,
(Dollars in millions)20262025
Revenues
ASC$559 $511 
IMS295 291 
Corporate & Eliminations(8)(3)
Total revenues$846 $799 
Cost of revenues
ASC$420 $392 
IMS222 229 
Corporate & Eliminations(8)(3)
Total cost of revenues$634 $618 
General and administrative
ASC$70 $66 
IMS29 23 
Corporate & Eliminations— — 
Total general and administrative$99 $89 
Company-funded independent research and development
ASC$24 $23 
IMS7 5 
Corporate & Eliminations— — 
Total company-funded independent research and development$31 $28 
Amortization of acquired intangible assets
ASC$5 $5 
IMS— — 
Corporate & Eliminations— — 
Total amortization of acquired intangible assets$5 $5 
Operating earnings
ASC$40 $25 
IMS37 34 
Corporate & Eliminations— — 
Total operating earnings$77 $59 
Interest expense, net— (1)
Earnings before taxes$77 $58 
Total intersegment revenues by segment for the periods ended March 31, 2026 and 2025 consists of the following:
Three Months Ended March 31,
(Dollars in millions)20262025
ASC$7 $3 
IMS1 — 
Total intersegment revenues $8 $3 
Depreciation by segment for the periods ended March 31, 2026 and 2025 consists of the following:
Three Months Ended March 31,
(Dollars in millions)20262025
ASC$13 $12 
IMS6 6 
Total depreciation $19 $18 
Total assets by segment as of March 31, 2026 and December 31, 2025, consists of the following:
(Dollars in millions)March 31, 2026December 31, 2025
ASC$2,520 $2,451 
IMS1,252 1,300 
Corporate & Eliminations439 735 
Total assets $4,211 $4,486