Leonardo DRS Inc. and Australian heavy‑engineering firm Hofmann Engineering Pty Ltd announced a strategic partnership on November 4, 2025 to jointly pursue advanced maritime propulsion opportunities. The collaboration focuses on electric‑drive, hybrid‑electric, and steam‑turbine technologies for surface ships and submarines, positioning the two companies to accelerate U.S. Navy production and strengthen supply‑chain resilience under the AUKUS alliance.
The partnership is a key component of Leonardo DRS’s broader strategy to deepen its presence in the Indo‑Pacific. By combining DRS’s proven electric‑drive expertise—used in the U.S. Navy’s Columbia‑class ballistic‑missile submarines and the Republic of Korea Navy’s frigates—with Hofmann’s precision manufacturing and large‑scale fabrication capabilities, the alliance is expected to reduce lead times, lower production costs, and provide a domestic Australian base for future U.S. Navy contracts. The move also signals a commitment to the AUKUS security pact, which seeks to build industrial capacity and supply‑chain resilience among Australia, the United Kingdom, and the United States.
Leonardo DRS’s recent financial performance underscores the significance of the partnership. In Q3 2025, the company reported revenue of $960 million, up 18% year‑over‑year, and an adjusted EPS of $0.29, beating analyst consensus of $0.28 by $0.01. The revenue growth was driven by strong demand in the Advanced Sensing and Computing segment, while the Integrated Mission Systems segment maintained steady margins through disciplined cost management. Management raised its full‑year 2025 revenue guidance to $3.55‑$3.60 billion and adjusted EPS to $1.07‑$1.12, reflecting confidence in sustained demand for electric‑propulsion solutions and the expected upside from the new partnership.
Hofmann Engineering brings a portfolio of heavy‑engineering assets that complement DRS’s technology focus. The firm operates a 200‑acre fabrication complex in Adelaide, capable of producing 30‑tonne components and complex assemblies for aerospace and defense. Hofmann’s experience includes the construction of propulsion systems for the Royal Australian Navy’s Hunter‑class destroyers and the Australian Defence Force’s new submarine program, giving it a proven track record in naval propulsion manufacturing. The partnership will leverage Hofmann’s capacity to scale production of electric‑drive modules, allowing DRS to meet the U.S. Navy’s projected 2026–2028 production schedule for Columbia‑class submarines and allied surface‑ship upgrades.
The memorandum of understanding outlines a five‑year term, with an initial commitment of $200 million in joint development and procurement activities. The agreement specifies that both parties will jointly pursue U.S. Navy and allied contracts, with a shared revenue‑sharing model that allocates 60% of net profits to DRS and 40% to Hofmann. The first joint project is slated to begin in Q1 2026, targeting the U.S. Navy’s 2027 submarine propulsion upgrade program. The MOU also includes provisions for technology transfer, joint research and development, and a shared supply‑chain network to mitigate component shortages.
Jon Miller, Senior Vice President of Leonardo DRS, emphasized that the partnership “expands our ability to deliver advanced electric‑propulsion systems across allied fleets and strengthens the supply chain for U.S. ship production.” Karl Hofmann, Director of Operations at Hofmann Engineering, noted that the MOU “reinforces Australia’s sovereign capability and strengthens the AUKUS bond.” Together, the collaboration positions both companies to capture a growing share of the global maritime propulsion market, driven by the shift toward more efficient, stealthy, and sustainable naval platforms.
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