10-K: Leidos Holdings Reports Strong Fiscal 2024 Results, Revenue Climbs 8%

• Leidos Holdings, Inc. reported an 8% increase in revenue for fiscal year 2024, reaching $16.662 billion compared to $15.438 billion in fiscal year 2023.
• The company's operating income significantly increased to $1.827 billion, a $1.206 billion increase compared to fiscal 2023.
• This increase is primarily attributed to lower impairment charges and a net increase in volumes on certain programs.
• Net income attributable to Leidos common stockholders was $1.254 billion, a substantial increase from $199 million in the previous fiscal year.
• The company operates in four reportable segments: National Security & Digital, Health & Civil, Commercial & International, and Defense Systems.
• The National Security & Digital segment saw a 2% revenue increase, while the Health & Civil segment experienced an 18% revenue growth.
• The Commercial & International segment's revenue increased by 6%, and the Defense Systems segment also saw an 8% revenue increase.
• The company's total backlog as of January 3, 2025, was $43.6 billion, including $8.4 billion in funded backlog.
• Leidos is focused on achieving annual revenue growth, improving back-office infrastructure, and deploying cash resources to enhance shareholder value.
• The company's effective tax rate was 23.7% in fiscal 2024, influenced by federal research tax credits and lower state income taxes.

Score: 8

Explanation: The document presents a positive outlook with strong financial results, revenue growth, and a healthy backlog. While there are some risks and challenges, the overall tone is optimistic.

• Significant increase in operating income and net income attributable to Leidos common stockholders.
• Strong revenue growth across multiple business segments, particularly in Health & Civil.
• Healthy backlog indicating potential for future revenue.
• Effective tax rate favorably impacted by research tax credits and lower state income taxes.
• Commitment to research and development, with $150 million invested in fiscal 2024.
• High percentage of employees with STEM degrees and security clearances.

• The Commercial & International segment experienced write-downs on certain programs within our UK operations for which cost and schedule were rebaselined.
• Corporate operating loss increased due to higher research and development activities and general and administrative costs.
• The company is subject to ongoing governmental reviews and investigations, which could lead to penalties or sanctions.
• The company faces risks associated with cybersecurity breaches and other information security incidents.

• Dependence on U.S. government contracts makes the company vulnerable to budget cuts and changes in spending priorities.
• Intense competition in the industry could impact the company's ability to obtain contracts.
• Global supply chain issues and inflationary pressures could raise costs and reduce customer buying power.
• Failure to comply with complex procurement rules and regulations could result in penalties and loss of contracts.
• Cybersecurity breaches and other information security incidents could negatively impact the business.
• The company faces risks associated with its international business, including compliance with foreign laws and regulations.
• The company has classified contracts with the U.S. government, which may limit investor insight into portions of the business.

The company anticipates being able to meet its liquidity needs for the next 12 months through cash generated from operations, available cash balances, borrowings from its commercial paper program, and sales of accounts receivable and borrowings from its revolving credit facility, if needed.

The company operates in a competitive industry with pressures associated with U.S. government spending and requires a high level of cost management focus to remain competitive.

• The document mentions several competitors including Accenture Federal Systems, BAE Systems, Booz Allen Hamilton Inc., CACI International Inc., General Dynamics Corporation, Lockheed Martin Corporation, Northrop Grumman Corporation, Raytheon Technologies Corporation and SAIC.
• These companies span across sectors that include systems development and integration, engineering and technical services divisions of large defense contractors, diversified U.S. and international IT providers and contractors focused solely on technical services, supply chain management, other logistics services and major systems operations and maintenance, homeland security and health solutions.
• Leidos competes on various factors, including technical expertise, qualified personnel, ability to deliver innovative solutions, program execution, understanding of customer missions, company size and scale, and past performance credentials.

• The company's performance and strategic initiatives are aimed at enhancing shareholder value.
• The company is committed to protecting its and their confidential and sensitive information, including personal information, and mitigating cybersecurity risks that impact our systems and networks.
• The company is committed to promoting hiring practices that are designed and executed to recruit, hire, train and retain best-in-class talent, including building a deep and broad pipeline of candidates.

• The company intends to continue paying dividends on a quarterly basis, although the declaration of any future dividends will be determined by the Board of Directors.
• The company will continue to evaluate the impact of the Pillar Two legislation as additional legislation gets enacted.
• The company will continue to monitor developments in climate change-related laws, regulations and policies for their potential effect on us.

• The Company voluntarily self-reported this investigation to the Department of Justice and the Securities and Exchange Commission and cooperated with both agencies.
• In December 2024, the Company received notification from the U.S. Department of Justice that it had closed its inquiry.
• In August 2022, the Company received a Federal Grand Jury Subpoena in connection with a criminal investigation being conducted by the U.S. Department of Justice Antitrust Division.

• 1969: Leidos was founded by physicist Dr. Robert Beyster.
• August 1, 2024: The EUs Artificial Intelligence Act (the AI Act) entered into force.
• January 3, 2025: End of fiscal year 2024.
• February 4, 2025: Number of shares issued and outstanding of the registrants class of common stock.
• February 11, 2025: Date of report.
• March 14, 2025: Continuing resolution provides government funding through this date.