DEF: Leidos Holdings Achieves Record Revenue and Sets Ambitious Growth Strategy for 2030

Leidos Holdings reports strong fiscal year 2024 performance, exceeding financial goals and unveiling its NorthStar 2030 growth strategy.

Summary

• Leidos Holdings, Inc. achieved record revenues of $16.7 billion in fiscal year 2024, a 7.9% increase.
• The company exceeded its three-year financial goals set in 2021 and experienced its best growth year since 2020.
• Leidos reported a book-to-bill ratio of 1.4 and backlog growth of 18% to $43.6 billion.
• The company is implementing its new NorthStar 2030 growth strategy, focusing on specific growth pillars.
• In fiscal 2024, Leidos increased adjusted EBITDA margin by 210 basis points to a record 12.9%, enabling a 19% increase in operating cash flow.
• The Board of Directors approved an amendment to the certificate of incorporation to limit liability of officers as permitted by law.
• The company returned a total of $906 million to stockholders through increased quarterly dividends and share repurchases.

Sentiment

Score: 9

Explanation: The document expresses a highly positive outlook due to strong financial results, strategic initiatives, and confidence in future growth.

Positives

• Strong financial performance in fiscal year 2024 with record revenue and increased profitability.
• Successful implementation of strategic initiatives leading to backlog growth.
• Commitment to returning value to stockholders through dividends and share repurchases.
• Proactive engagement with stockholders and stakeholders on key issues.
• Focus on employee growth and development through enhanced benefits and upskilling initiatives.
• Introduction of NorthStar 2030 strategy to drive future growth and efficiency.

Future Outlook

Leidos expects 2025 to be another exciting year as it implements its new NorthStar 2030 growth strategy.

Management Comments

• Leidos exists to make our customer outcomes smarter and more efficient.
• The new U.S. administration's emphasis on driving efficiency across government operations only increases our confidence in our new strategy.
• With our NorthStar 2030 strategy to guide us, I am confident that our past success is just prologue to an awesome future ahead.

Industry Context

Leidos is positioned as a leading government technology services provider, leveraging innovation to meet national security challenges and drive government efficiencies.

Comparison to Industry Standards

• The document benchmarks Leidos' executive compensation against a peer group of companies including AECOM, Booz Allen Hamilton, CACI International, CGI, Cognizant Technology Solutions, Fluor Corporation, Huntington Ingalls Industries, Jacobs Solutions, KBR, Kyndryl, L3Harris Technologies, Northrop Grumman Corporation, SAIC, and Textron.
• The company targets total direct compensation for its NEOs at approximately the median among companies with which it competes for executive talent.
• Leidos' performance share program measures relative total shareholder return (TSR) against this peer group.

Management Changes

Corporate Governance

Related Party Transactions

• Matthew Fasano, brother of Gerard A. Fasano, is a program manager at Leidos and received compensation of approximately $250,000 in 2024.
• Paul Schmanske, brother-in-law of M. Victoria Schmanske, is an infrastructure lead at Leidos and received compensation of approximately $210,000 in 2024.

Stakeholder Impact

• Stockholders benefit from increased dividends and share repurchases.
• Employees benefit from enhanced benefits and upskilling initiatives.
• Customers benefit from smarter and more efficient solutions.
• The company is committed to maintaining strong relationships with supplier partners.

Next Steps

• Stockholders are invited to review the Proxy Statement and vote in line with the Board's recommendations.
• The company will share developments with stockholders at its Investor Day.
• The Board will continue proactive engagement with stockholders.

Key Dates