LDOS
Leidos Holdings, INC
NYSE
8-K: Leidos Holdings Exceeds Expectations in Q1 2024, Raises Full-Year Guidance
Sentiment:
Quarterly Report
30 April 2024 6:05 AM
Leidos reported a strong first quarter for fiscal year 2024, with revenue up 7% year-over-year and significant increases in net income and adjusted EBITDA, leading to raised full-year guidance.
Better than expected
Leidos exceeded expectations with a 7% increase in revenue, a 73% increase in net income, and a 42% increase in adjusted EBITDA.
The company raised its full-year guidance for revenue, adjusted EBITDA margin, non-GAAP diluted EPS, and operating cash flow, indicating better-than-expected performance and outlook.
Summary
- Leidos Holdings, Inc. announced its financial results for the first quarter of fiscal year 2024, which ended on March 29, 2024.
- The company reported revenues of $3.98 billion, a 7% increase compared to the same quarter last year.
- Net income for the quarter was $283 million, or $2.07 per diluted share, representing a 73% and 77% year-over-year increase, respectively.
- Adjusted EBITDA reached $490 million, a 42% increase year-over-year, with a record margin of 12.3%.
- Non-GAAP diluted earnings per share were $2.29, up 56% year-over-year.
- Cash flow from operations was $63 million, and free cash flow was $46 million.
- Net bookings for the quarter totaled $3.7 billion, resulting in a book-to-bill ratio of 0.9 for the quarter and 1.1 for the trailing twelve months.
- Leidos has updated its fiscal year 2024 guidance, raising revenue expectations to $16.0 $16.4 billion, adjusted EBITDA margin to mid-to-high 11%, non-GAAP diluted EPS to $8.40 $8.80, and operating cash flow to approximately $1.3 billion.
Sentiment
Score: 9
Explanation: The document conveys a very positive sentiment due to strong financial results, increased guidance, and positive management commentary. The company is clearly performing well and is optimistic about the future.
Positives
- The company experienced strong revenue growth across all customer segments, particularly in managed health services.
- Profitability significantly improved due to increased volumes on fixed-rate managed health services and better cost control.
- Leidos demonstrated strong cash flow generation and returned significant capital to shareholders.
- The company's backlog remains robust, providing a solid foundation for future revenue.
- The raised full-year guidance indicates management's confidence in continued strong performance.
- The company's book-to-bill ratio for the trailing twelve months is a healthy 1.1.
Negatives
- The book-to-bill ratio for the quarter was 0.9, indicating that new bookings did not fully replace the revenue recognized during the quarter.
- Defense Systems segment operating income margin decreased due to program mix shifts.
Risks
- The company's performance is subject to developments in U.S. government defense and non-defense budgets, including potential budget reductions and delays.
- Uncertainties in tax due to new tax legislation or other regulatory developments could impact financial results.
- Rising inflationary pressures and fluctuations in interest rates may affect costs and profitability.
- Delays in the U.S. government contract procurement process or the award of contracts could impact revenue.
- The company faces risks related to cybersecurity, data security, and other security threats.
- The company's ability to attract and retain skilled employees is crucial for its success.
- The company's ability to accurately estimate costs on fixed-price contracts is important for profitability.
Future Outlook
Leidos has raised its full-year fiscal 2024 guidance, expecting revenues between $16.0 and $16.4 billion, adjusted EBITDA margin in the mid-to-high 11% range, non-GAAP diluted EPS between $8.40 and $8.80, and approximately $1.3 billion in operating cash flow.
Management Comments
- Thomas Bell, Leidos Chief Executive Officer, stated that the strong start to the year demonstrates the team's ability to deliver for its employees, customers, and shareholders.
- He also mentioned that with greater visibility around customer funding and performance ahead of plan, they are raising guidance on all metrics ahead of their typical pace.
- Bell emphasized that 2024 will showcase their commitment to profitable growth.
- He noted that their focus remains on operational execution while developing a robust strategy, investing in disruptive technology-driven solutions, and unlocking maximum value through their capability-based organization.
Industry Context
Leidos' strong performance reflects the continued demand for technology and services in the government and health sectors. The company's focus on innovation and operational execution positions it well to capitalize on these trends. The increased guidance suggests confidence in the company's ability to maintain its growth trajectory in a competitive market.
Comparison to Industry Standards
- Leidos' 7% revenue growth is solid compared to other large government contractors, many of whom are seeing mid-single-digit growth.
- The 42% increase in adjusted EBITDA and the 12.3% margin are particularly impressive, suggesting strong operational efficiency and cost control compared to peers like General Dynamics and Lockheed Martin.
- The 77% increase in diluted EPS significantly outperforms many of its competitors, indicating strong profitability.
- The book-to-bill ratio of 0.9 for the quarter is slightly below 1, which is a common benchmark for maintaining backlog, but the trailing twelve-month ratio of 1.1 is healthy.
- The raised guidance across all metrics is a positive sign, indicating that Leidos is outperforming its initial expectations and is confident in its future performance, which is not always the case with other companies in the sector.
Stakeholder Impact
- Shareholders will benefit from the strong financial performance, increased guidance, and return of capital through share repurchases and dividends.
- Employees will benefit from the company's success and commitment to growth.
- Customers will benefit from the company's focus on delivering innovative solutions.
- Suppliers and creditors will benefit from the company's strong financial position.
Next Steps
- Leidos management will discuss operations and financial results in an earnings conference call on April 30, 2024.
- The company will continue to focus on operational execution, developing a robust strategy, investing in disruptive technology-driven solutions, and unlocking maximum value through its capability-based organization.
Key Dates
- March 29, 2024: End of the first fiscal quarter for Leidos.
- April 26, 2024: Leidos Board of Directors declared a cash dividend of $0.38 per share.
- April 30, 2024: Date of the earnings release and conference call.
- June 14, 2024: Record date for the declared cash dividend.
- June 28, 2024: Payment date for the declared cash dividend.
- April 30, 2025: Archived version of the webcast will be available until this date.
Keywords
Leidos, Financial Results, Earnings, Revenue, EBITDA, EPS, Bookings, Backlog, Guidance, Defense, Health, Technology, Government Contracts
LDOS
Leidos Holdings, INC
NYSE
Sector: TBD
Filings with Classifications
Better than expected
6 May 2025 11:55 AM
Quarterly Report
- Revenue increased by 6.8% year-over-year.
- Operating income increased by 27.7% year-over-year.
- Diluted EPS increased from $2.07 to $2.77.
Better than expected
5 May 2025 10:44 PM
Earnings Release
- The company's revenue, net income, and adjusted EBITDA all exceeded expectations, demonstrating strong growth and profitability.
- The company's non-GAAP diluted EPS grew by 30% to $2.97, exceeding expectations.
- The company reaffirmed its full-year revenue guidance of $16.90 $17.30 billion, exceeding expectations.
Better than expected
17 March 2025 5:01 PM
Proxy Statement
- The company achieved record revenues and exceeded its three-year financial goals.
- Adjusted EBITDA margin increased significantly.
- The company's backlog grew substantially.
Capital raise
25 February 2025 4:23 PM
Debt Management Announcement
- Leidos issued $500 million aggregate principal amount of 5.400% senior notes due 2032.
- Leidos issued $500 million aggregate principal amount of 5.500% senior notes due 2035.
- The proceeds from these issuances were used to fund the repurchase and discharge of the 2025 Notes.
Capital raise
20 February 2025 4:15 PM
Debt Issuance
- Leidos, Inc. issued $500 million aggregate principal amount of 5.400% senior notes due 2032 and $500 million aggregate principal amount of 5.500% senior notes due 2035.
- The Notes Offering was made pursuant to the Issuers automatic shelf registration statement on Form S-3 (File No. 333-269820).
- The Issuer intends to use the net proceeds from the Notes Offering for general corporate purposes, including to: (i) repurchase for cash (the Tender Offer ) any and all of its outstanding 3.625% notes due 2025 (the 2025 Notes ) tendered in the Tender Offer; (ii) repay any 2025 Notes, in accordance with the satisfaction and discharge terms of an indenture, dated as of May 12, 2020, among the Issuer, Leidos, as guarantor, and the Trustee (the May 2020 Indenture ), that remain outstanding following the Tender Offer; (iii) repay a portion of the outstanding balance on its senior unsecured term loan facility; (iv) repurchase outstanding shares of its common stock; (v) fund potential acquisitions; and (vi) pay related fees and expenses.
Capital raise
13 February 2025 8:50 AM
Tender Offer Announcement
- Leidos intends to fund the tender offer and the repayment of any remaining notes through an offering of new senior notes.
- The completion of the tender offer is contingent upon the successful completion of this new offering.
Better than expected
11 February 2025 1:19 PM
Annual Results
- The company's operating income significantly increased due to lower impairment charges and a net increase in volumes on certain programs.
- Net income attributable to Leidos common stockholders was substantially higher compared to the previous fiscal year.
Delay expected
11 February 2025 1:19 PM
Annual Results
- The Commercial & International segment experienced write-downs on certain programs within our UK operations for which cost and schedule were rebaselined.
Better than expected
10 February 2025 8:29 PM
Earnings Release
- The company's revenue, EPS, and backlog all exceeded expectations, indicating strong performance across key financial metrics.
Better than expected
29 October 2024 10:42 AM
Quarterly Report
- The company's net income and revenue significantly improved compared to the same period last year, indicating better than expected results.
- The Health & Civil segment's performance was particularly strong, exceeding expectations.
Delay expected
29 October 2024 10:42 AM
Quarterly Report
- The document mentions delays in airline travel infrastructure projects impacting the Security Enterprise Solutions (SES) reporting unit.
Better than expected
28 October 2024 7:23 PM
Quarterly Report
- The company's net income and adjusted EBITDA significantly exceeded expectations, driven by improved operating performance and increased demand.
- The company raised its full-year guidance for revenue, adjusted EBITDA margin, and non-GAAP diluted EPS, indicating a positive outlook.
- The company's non-GAAP diluted EPS of $2.93 was a 44% increase year-over-year, significantly exceeding expectations.
Better than expected
30 July 2024 11:45 AM
Quarterly Report
- The company's revenue, operating income, and net income all significantly exceeded the prior year's results, indicating better than expected performance.
- The Health & Civil segment's exceptional growth and profitability drove the overall positive results, surpassing expectations.
- The company's diluted EPS of $2.37 for the quarter and $4.42 for the six months were substantially higher than the prior year, indicating better than expected profitability.
Delay expected
30 July 2024 11:45 AM
Quarterly Report
- The company experienced write-downs on programs within its UK operations due to cost increases and schedule delays.
Better than expected
29 July 2024 5:55 PM
Quarterly Report
- The company's revenue, net income, adjusted EBITDA, and non-GAAP diluted EPS all exceeded prior year results and expectations.
- The company increased its full-year guidance for adjusted EBITDA margin and non-GAAP diluted EPS.
Better than expected
30 April 2024 11:02 AM
Quarterly Report
- The company's net income, revenue, and operating income all significantly exceeded the prior year's results.
- The Health & Civil segment's performance was particularly strong, driving overall growth.
- The company's earnings per share also showed a substantial increase.
Better than expected
30 April 2024 6:05 AM
Quarterly Report
- Leidos exceeded expectations with a 7% increase in revenue, a 73% increase in net income, and a 42% increase in adjusted EBITDA.
- The company raised its full-year guidance for revenue, adjusted EBITDA margin, non-GAAP diluted EPS, and operating cash flow, indicating better-than-expected performance and outlook.
Better than expected
13 February 2024 6:08 AM
Quarterly Report
- Leidos exceeded its own financial guidance for the fourth quarter and fiscal year 2023, indicating better than expected results.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.