LDOS
Leidos Holdings, INC
NYSE
8-K: Leidos Reports Strong Q1 2025 Results, Reaffirms Full-Year Guidance
Sentiment:
Earnings Release
5 May 2025 10:44 PM
Leidos Holdings, Inc. announced robust first quarter results for fiscal year 2025, featuring significant revenue and earnings growth and reaffirming full-year guidance.
Better than expected
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.
Summary
- Leidos reported revenues of $4.25 billion for Q1 2025, a 7% increase compared to Q1 2024.
- Net income reached $365 million, or $2.77 per diluted share, up 29% and 34% year-over-year, respectively.
- Adjusted EBITDA was $601 million with a margin of 14.2%, a 23% increase year-over-year.
- Non-GAAP diluted EPS was $2.97, a 30% increase year-over-year.
- The company generated $58 million in cash flows from operations and $36 million in free cash flow.
- Leidos reaffirmed its FY25 guidance, projecting revenues between $16.90 and $17.30 billion, an adjusted EBITDA margin in the mid-to-high 12% range, and non-GAAP diluted EPS between $10.35 and $10.75.
- Backlog at the end of the quarter was $46.3 billion, of which $7.3 billion was funded.
- Net bookings totaled $2.1 billion in the quarter, representing a book-to-bill ratio of 0.5.
- The company issued $1 billion in senior unsecured notes and used the proceeds to retire existing debt and repurchase shares.
Sentiment
Score: 8
Explanation: The document presents a positive outlook with strong financial results, reaffirmation of guidance, and strategic acquisitions. The management's confidence and commitment to shareholder value further contribute to the positive sentiment.
Positives
- Strong revenue growth of 7% year-over-year indicates increasing demand for Leidos' services.
- Significant increases in net income, adjusted EBITDA, and non-GAAP diluted EPS demonstrate improved profitability and operational efficiency.
- Reaffirmation of full-year guidance suggests management's confidence in the company's continued performance.
- The $500 million accelerated share repurchase program reflects a commitment to returning value to shareholders.
- Strategic acquisition of a cyber platform company enhances Leidos' capabilities and market position.
- The increase in Health & Civil operating income margin for the quarter was 23.2%, compared to 18.5% in the prior year quarter.
Negatives
- The book-to-bill ratio of 0.5 indicates that new bookings were less than revenue for the quarter.
- Cash flows from operations were relatively low at $58 million, despite strong EBITDA.
- The company has a significant amount of debt, with $5.1 billion outstanding as of April 4, 2025.
Risks
- The forward-looking statements are subject to various risks and uncertainties, including government budget changes, economic conditions, and cybersecurity threats.
- Delays in government contract procurement processes could impact future revenue and profitability.
- The company's ability to attract and retain skilled employees is crucial for its success.
- The company's backlog estimates are subject to change and may be affected by several factors, including modifications of contracts, non-exercise of options and foreign currency movements.
Future Outlook
Leidos reaffirmed its fiscal year 2025 guidance, projecting revenues between $16.90 and $17.30 billion, an adjusted EBITDA margin in the mid-to-high 12% range, and non-GAAP diluted EPS between $10.35 and $10.75, and approximately $1.45 billion in cash flows provided by operating activities.
Management Comments
- Leidos Chief Executive Officer Tom Bell stated that the company's Q1 results build on the momentum from 2024 and demonstrate the team's ability to execute in a dynamic environment.
- Tom Bell noted that the company's NorthStar 2030 Strategy aligns well with the priorities of the new Administration.
- Tom Bell expressed confidence in the company's positioning and opportunities ahead, as evidenced by the $500 million accelerated share repurchase.
Industry Context
Leidos' strong Q1 results reflect the continued demand for technology and services in the government and commercial sectors, particularly in areas such as cybersecurity, IT modernization, and healthcare. The company's focus on aligning with government priorities and investing in differentiated technologies positions it well for future growth.
Comparison to Industry Standards
- Leidos' revenue growth of 7% is comparable to other large government contractors such as General Dynamics and Booz Allen Hamilton, which have also seen growth in their government services segments.
- The adjusted EBITDA margin of 14.2% is competitive with industry peers, indicating efficient operations and cost management.
- The company's strategic acquisition of a cyber platform company aligns with the industry trend of consolidating capabilities in high-demand areas such as cybersecurity and digital transformation.
- Leidos' backlog of $46.3 billion demonstrates a strong pipeline of future revenue, similar to the large backlogs reported by other major players in the government contracting space.
Stakeholder Impact
- Shareholders will benefit from the increased profitability, share repurchase program, and dividend payments.
- Employees may experience growth opportunities due to the company's expansion and strategic initiatives.
- Customers will benefit from Leidos' enhanced capabilities and focus on delivering smarter and more efficient solutions.
- Suppliers may see increased business opportunities as Leidos continues to grow and expand its operations.
Next Steps
- Complete the acquisition of the cyber platform company in the second quarter of 2025.
- Continue executing the NorthStar 2030 Strategy.
- Pay the cash dividend of $0.40 per share on June 30, 2025.
- Management will discuss operations and financial results in an earnings conference call beginning at 8:00 a.m. eastern on May 6, 2025.
Key Dates
- January 3, 2025: Fiscal year ended; annual revenues reported at approximately $16.7 billion
- April 4, 2025: End of the first fiscal quarter of 2025
- May 2, 2025: Board of Directors declared a cash dividend of $0.40 per share
- May 6, 2025: Earnings conference call to discuss operations and financial results
- June 16, 2025: Stockholders of record date for the cash dividend
- June 30, 2025: Payment date for the cash dividend of $0.40 per share
- May 6, 2026: Archived version of the webcast will be available on the Leidos Investor Relations website until this date
Keywords
Leidos, financial results, earnings, revenue, EBITDA, EPS, guidance, backlog, cybersecurity, 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.
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.
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
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.
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.