LDOS
Leidos Holdings, INC
NYSE
10-Q: Leidos Holdings Reports Strong Q1 2025 Results, Revenue Up 6.8%
Sentiment:
Quarterly Report
6 May 2025 11:55 AM
Leidos Holdings, Inc. announces a 6.8% increase in revenue for the first quarter of 2025, driven by growth across all segments.
Better than expected
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.
Summary
- Leidos Holdings, Inc. reported a 6.8% increase in revenue for the first quarter of 2025, reaching $4.245 billion compared to $3.975 billion in the same period last year.
- Operating income increased by 27.7% to $530 million, with an operating margin of 12.5%.
- Net income attributable to Leidos common stockholders was $363 million, or $2.77 diluted EPS, compared to $284 million, or $2.07 diluted EPS, in the prior year.
- The company recorded net bookings of $2.1 billion and total backlog of $46.3 billion as of April 4, 2025.
- Leidos issued $1 billion in senior notes in February 2025, using the proceeds to retire existing debt and repurchase shares.
- The company is currently operating under a continuing resolution from the federal government that runs through September 30, 2025.
- Leidos changed its backlog policy to include estimated future revenue on task orders expected to be awarded under sole source IDIQ contracts.
Sentiment
Score: 8
Explanation: The document presents a positive outlook with strong financial results, strategic acquisitions, and debt management. While there are some risks and challenges, the overall tone is optimistic.
Positives
- Strong revenue growth of 6.8% indicates healthy demand for Leidos' services.
- Significant increase in operating income and margin demonstrates improved profitability.
- Substantial backlog provides revenue visibility for future periods.
- Strategic debt management and share repurchase activities enhance shareholder value.
- The company's acquisition of a cyber company will expand its capabilities and market presence.
- The company's change in accounting policy enhances the usefulness of financial reporting and enhances comparability to align with industry practice.
Negatives
- Net cash provided by operating activities decreased $55 million during the three months ended April 4, 2025, when compared to the prior year quarter.
- The effective tax rate increased to 23.6% compared to 23.1% for the three months ended March 29, 2024.
- Non-operating expense, net increased to $52 million as compared to $47 million for the three months ended March 29, 2024, primarily driven by unfavorable exchange rate movements.
Risks
- Reliance on U.S. government contracts makes Leidos vulnerable to changes in government spending and budget priorities.
- International operations expose the company to regulatory, foreign currency exchange rate, and geopolitical risks.
- Ongoing government investigations and reviews could lead to adverse findings and material impacts on the business.
- The company is subject to reviews, investigations, claims, lawsuits, other uncertainties and future obligations related to our business.
Future Outlook
Leidos 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, if needed, sales of accounts receivable and borrowings from its revolving credit facility.
Industry Context
Leidos' performance reflects the ongoing demand for technology and mission-critical solutions in the government and commercial sectors. The company's focus on digital modernization, cybersecurity, and integrated systems aligns with key industry trends and government priorities.
Comparison to Industry Standards
- Leidos competes with companies such as Booz Allen Hamilton, CACI International, and General Dynamics in the government services market.
- The company's revenue growth and operating margin are comparable to industry peers, reflecting its competitive position.
- Leidos' backlog provides a strong foundation for future revenue generation, similar to other large government contractors.
Stakeholder Impact
- Shareholders will benefit from increased profitability and strategic capital allocation.
- Employees will have opportunities for growth and development within a growing company.
- Customers will benefit from enhanced capabilities and innovative solutions.
- Suppliers and partners will have opportunities to collaborate with a leading technology provider.
Next Steps
- Complete the acquisition of the full spectrum cyber company in the second quarter of 2025.
- Continue to execute on backlog and drive revenue growth.
- Manage debt and capital allocation to enhance shareholder value.
- Monitor and respond to changes in government spending and regulations.
Legal Proceedings
- The Company voluntarily self-reported to the Department of Justice and the Securities and Exchange Commission an investigation related to activities by its employees, third party representatives and subcontractors, raising concerns related to a portion of our business that conducts international operations, and has 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.
Key Dates
- December 2023: The FASB issued ASU 2023-09, to enhance the transparency and usefulness of income tax disclosures.
- December 29, 2023: Balance sheet date for comparison in the statements of equity.
- March 29, 2024: End of the comparative quarter in the prior year.
- November 2024: The FASB issued ASU 2024-03, to enhance the transparency of certain expense disclosures.
- December 2024: The Company received notification from the U.S. Department of Justice that it had closed its inquiry.
- January 3, 2025: End of the previous fiscal year and balance sheet date for comparison.
- February 11, 2025: Date of filing the Annual Report on Form 10-K.
- February 20, 2025: Leidos issued $1 billion in senior notes and entered into an ASR agreement.
- March 10, 2025: Leidos entered into a definitive agreement to acquire a full spectrum cyber company.
- April 4, 2025: End of the reported quarter.
- April 29, 2025: Date of record for outstanding shares of common stock.
- May 6, 2025: Date of the report.
- September 30, 2025: Expiration date of the current continuing resolution from the federal government.
Keywords
Leidos, revenue, operating income, EPS, backlog, government contracts, cybersecurity, financial results, Q1 2025
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.
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
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.
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.