LDOS
Leidos Holdings, INC
NYSE
8-K: Leidos Reports Strong Q4 and Fiscal Year 2024 Results, Revenue Up 10% in Q4
Sentiment:
Earnings Release
10 February 2025 8:29 PM
Leidos announced robust financial results for Q4 and fiscal year 2024, marked by double-digit earnings growth and strong business development.
Better than expected
The company's revenue, EPS, and backlog all exceeded expectations, indicating strong performance across key financial metrics.
Summary
- Leidos reported a 10% year-over-year increase in revenue for the fourth quarter, reaching $4.4 billion.
- Full-year revenue increased by 8% year-over-year to $16.7 billion.
- Diluted earnings per share (EPS) for the fourth quarter rose by 28% to $2.12, while full-year diluted EPS increased by 540% to $9.22.
- Non-GAAP diluted EPS for the fourth quarter was $2.37, a 19% increase, and for the full year, it was $10.21, a 40% increase.
- Cash flows from operations were $299 million for the fourth quarter and $1.4 billion for the year.
- The company's backlog reached $43.6 billion, up 18% year-over-year, with a book-to-bill ratio of 1.4 for 2024.
- Leidos is initiating fiscal year 2025 guidance with revenue projected between $16.9 billion and $17.3 billion.
- Adjusted EBITDA margin is expected to be in the mid-to-high 12% range for fiscal year 2025.
- Non-GAAP diluted EPS is projected to be between $10.35 and $10.75 for fiscal year 2025.
- Cash flows provided by operating activities are expected to be approximately $1.45 billion for fiscal year 2025.
Sentiment
Score: 9
Explanation: The document presents a highly positive outlook with strong financial results, increased backlog, and optimistic future guidance. The management's comments further reinforce this positive sentiment.
Positives
- Leidos experienced strong revenue growth across all customer segments, particularly in managed health services.
- The company demonstrated improved program execution and cost control.
- Leidos secured several notable new business awards, including contracts with the Veterans Benefits Administration, the U.S. Army, and the Transportation Security Administration.
- The company's backlog increased significantly, indicating future revenue potential.
- Leidos returned $459 million to shareholders in Q4 through share repurchases and dividends.
- The company's outlook for the future remains positive, with a clearly defined strategy and technology-enabled team.
Negatives
- National Security & Digital operating income margin for the quarter was 9.2%, compared to 10.3% in the prior year quarter.
- Defense Systems operating income margin for the quarter was 0.4%, compared to 3.6% in the prior year quarter.
- Commercial & International operating income margin for the quarter was 6.6%, compared to 7.2% in the prior year quarter.
- The decrease in segment profitability for the quarter and year in the Defense Systems segment is driven by a $21M write-down of an asset within the airborne surveillance business.
Risks
- The forward-looking statements are subject to various risks and uncertainties, including developments in government budgets, economic conditions, and geopolitical events.
- The company's performance may be affected by delays in contract procurement, changes in government regulations, and increased competition.
- Leidos faces risks related to cybersecurity, data security, and compliance with various laws and regulations.
- The company's ability to attract and retain skilled employees is crucial to its success.
- The company's ability to accurately estimate costs associated with firm-fixed-price contracts is essential.
Future Outlook
Leidos expects fiscal year 2025 revenue between $16.9 billion and $17.3 billion, adjusted EBITDA margin in the mid-to-high 12% range, non-GAAP diluted EPS between $10.35 and $10.75, and cash flows from operating activities of approximately $1.45 billion.
Management Comments
- '2024 was a fantastic year for Leidos, as we delivered robust results at or above the high end of our guidance range across all metrics,' said Leidos Chief Executive Officer Tom Bell.
- 'The fourth quarter was especially strong in revenue growth and business development, driven by our focus on the enduring, mission critical needs of our customers.'
- 'Our outlook for the future remains decidedly positive, as we have a clearly defined strategy and technology-enabled team that is poised to navigate this dynamic environment from a position of strength,' Bell said.
Industry Context
Leidos' strong performance reflects the continued demand for its services in government and commercial sectors, particularly in areas such as digital modernization, managed health services, and defense systems. The company's focus on technology and mission-critical needs positions it well in a competitive market.
Comparison to Industry Standards
- Leidos' revenue growth of 8% for the year compares favorably to other large government contractors such as General Dynamics and Booz Allen Hamilton, who have seen revenue growth in the mid-single digits.
- The company's adjusted EBITDA margin of 12.9% is also competitive within the industry, aligning with the margins of peers like Lockheed Martin and Northrop Grumman.
- Leidos' book-to-bill ratio of 1.4 indicates strong demand for its services and a healthy pipeline of future revenue, which is a positive sign compared to companies with lower ratios.
Stakeholder Impact
- Shareholders will benefit from increased earnings and dividends.
- Employees may experience increased job security and opportunities for advancement.
- Customers will benefit from Leidos' continued investment in technology and innovation.
- Suppliers may see increased demand for their products and services.
- Creditors can be reassured by Leidos' strong financial performance and cash flow.
Next Steps
- Leidos management will discuss operations and financial results in an earnings conference call on February 11, 2025.
- The company will pay a cash dividend of $0.40 per share on March 28, 2025, to stockholders of record on March 14, 2025.
Key Dates
- December 29, 2023: End of comparable period for prior fiscal year results.
- January 3, 2025: End of fiscal year 2024 and fourth quarter.
- February 7, 2025: Leidos Board of Directors declared a cash dividend of $0.40 per share.
- February 11, 2025: Date of the earnings conference call and press release announcement.
- March 14, 2025: Record date for the cash dividend.
- March 28, 2025: Payment date for the cash dividend.
- February 11, 2026: Archived version of the webcast will be available on the Leidos Investor Relations website until this date.
Keywords
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.
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.