Leidos Holdings, Inc. (NYSE: LDOS) reported robust financial results for the first quarter of fiscal year 2025, showcasing significant earnings and revenue growth that reinforce its strategic execution and market positioning.
Who: Leidos Holdings, Inc., a leader in industry and technology serving government and commercial sectors.
What: Strong financial performance in Q1 2025 including increased revenues, net income, and margins. The company also announced a strategic acquisition and ongoing share repurchases.
When: Quarter ended April 4, 2025.
Where: Headquartered in Reston, Virginia, operating globally with strong U.S. government contracts.
Revenues rose 7% year-over-year to \(4.25 billion from \)3.98 billion.
Net income surged 29% to \(365 million (\)2.77 diluted EPS), up from \(283 million (\)2.07 diluted EPS).
Net income margin increased to 8.6% from 7.1%.
Adjusted EBITDA grew 23% year-over-year to $601 million, representing a margin expansion to 14.2% from 12.3%.
Non-GAAP diluted EPS jumped 30% to $2.97.
Operating cash flow was \(58 million, with free cash flow at \)36 million.
National Security & Digital revenues increased 5% to $1.88 billion; operating margin steady at 9.9%.
Health & Civil led growth with 8% revenue increase to $1.29 billion; operating margin expanded notably from 18.5% to 23.2%, driven by increased volumes and case complexity in managed health services.
Commercial & International revenue climbed 12% to $568 million, with stable operating margin at 6.5%.
Defense Systems revenue rose 7% to $508 million; margin improved significantly from 4.4% to 6.7% supported by increased volume in space sensing and hypersonics.
Leidos announced a $300 million acquisition of a cyber platforms company, reinforcing its full-spectrum cybersecurity capabilities, expected to close by Q2 2025.
The company executed a $500 million accelerated share repurchase, reflecting confidence in its future growth.
Issued $1 billion in senior unsecured notes to retire near-term debt and fund share repurchases, with rates of 5.40% and 5.50% maturing in 2032 and 2035 respectively.
Declared a cash dividend of $0.40 per share, consistent with steady shareholder returns.
Backlog totaled $46.3 billion (including estimated future revenues from sole source contracts), an 11% increase year-over-year.
Funded backlog stands at $7.3 billion.
Net bookings for the quarter were $2.1 billion with a book-to-bill ratio of 0.5, reflecting backlog policy changes but maintaining operational momentum.
Revenues projected between \(16.90 billion and \)17.30 billion.
Adjusted EBITDA margin expected mid-to-high 12%.
Non-GAAP diluted EPS forecasted between \(10.35 and \)10.75.
Operating cash flow approximately $1.45 billion.
Leidos’ first quarter results reflect continued demand across defense, health, and commercial sectors, driven by technology investments and government priorities aligned with the NorthStar 2030 Strategy. The healthy margin expansion and EPS growth demonstrate operational efficiency and effective cost controls. The company’s strategic acquisition in cybersecurity aligns with recent earnings call themes emphasizing innovation and expanded cyber capabilities.
The company’s balance sheet remains strong with \(842 million in cash and \)5.1 billion in total debt, strategically managed through debt refinancing to lower near-term maturities and fund shareholder returns.
Full 8-K financial report from Leidos Holdings as of April 4, 2025 can be accessed here.
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This insightful analysis provides investors and industry watchers with a comprehensive understanding of Leidos’ current financial health, strategic direction, and future outlook amid evolving government and commercial technology demands.