| Imagery Source: Leidos Holdings, Inc. |
| Information Source: Leidos Holdings, Inc |
- Revenues of $4.2 billion, up 7% year-over-year
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- Net income of $365 million or $2.77 per diluted share
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- Adjusted EBITDA (non-GAAP) of $601 million (14.2% margin)
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- Non-GAAP Diluted Earnings per Share of $2.97, up 30% year-over-year
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- Cash Flows from Operations of $58 million; Free Cash Flow (non-GAAP) of $36 million
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| Leidos Holdings, Inc. (NYSE: LDOS) today reported financial results for the first quarter of fiscal year 2025, highlighted by robust earnings and revenue growth. |
| "Our robust first quarter results build on the momentum from 2024, demonstrating the team's ability to execute in a dynamic environment that demands agility and innovation," said Leidos Chief Executive Officer Tom Bell. "The five growth pillars defined by our NorthStar 2030 Strategy are well aligned to the priorities of the new Administration, and we will continue to focus on making customer outcomes smarter and more efficient. We are moving out with pace and conviction on our strategy through differentiated investments in technologies, including bolstering our full-spectrum cyber capabilities through a pending acquisition. As evidenced by our $500 million accelerated share repurchase, we remain confident in our positioning and the opportunities ahead." |
| Revenues for the quarter were $4.25 billion, up 7% compared to the first quarter of 2024. Revenues grew year-over-year due to increased demand across all customer segments, with three of the four reporting segments growing 7% or more. |
| For the first quarter, net income was $365 million, or $2.77 per diluted share. Net income and diluted EPS were up 29% and 34% year-over-year, respectively. The net income margin of 8.6% increased from 7.1% in the first quarter of 2024. |
| Adjusted EBITDA was $601 million for the first quarter, up 23% year-over-year. Adjusted EBITDA margin of 14.2% increased from 12.3% in the first quarter of 2024. Non-GAAP net income was $391 million for the first quarter, up 25% year-over-year, and non-GAAP diluted EPS for the quarter was $2.97, up 30% year-over-year. The primary drivers of increased profitability were increased volumes on managed health services programs and improved program execution and cost control across the company. |
| CASH FLOW SUMMARY |
| In the first quarter, Leidos generated $58 million of net cash provided by operating activities and used $22 million and $110 million in investing and financing activities, respectively. Net cash provided by operating activities was driven by strong EBITDA and collections performance. Days Sales Outstanding (DSO) for the quarter was 62, in line with the prior year period. Effective for the first quarter of fiscal 2025, Leidos retroactively changed its policy to exclude outstanding payments from "Cash and cash equivalents" on the condensed consolidated balance sheets. This change did not have a material impact on cash provided by operating activities in the quarter. |
| Investing activities consisted primarily of $22 million in property, equipment and software payments, which resulted in quarterly free cash flow of $36 million. During the quarter, Leidos issued and sold $500 million of senior unsecured notes maturing in March 2032 and $500 million of senior unsecured notes maturing in March 2035. The annual interest rates for the senior unsecured obligations are 5.40% and 5.50%, respectively. The proceeds from the notes were used to retire the $500 million of senior unsecured notes due May 2025 and repurchase $500 million of outstanding shares of common stock in connection with an Accelerated Share Repurchase agreement. |
| During the quarter, Leidos entered into a definitive agreement to acquire a company that develops offensive and defensive cyber platforms and other solutions for the U.S. Government for the preliminary purchase price of $300 million, subject to working capital and other customary adjustments. The transaction is expected to be completed in the second quarter of 2025, subject to the satisfaction or waiver of customary closing conditions. |
| As of April 4, 2025, Leidos had $842 million in cash and cash equivalents and $5.1 billion of debt. On May 2, 2025, the Leidos Board of Directors declared a cash dividend of $0.40 per share. The dividend will be payable on June 30, 2025, to stockholders of record at the close of business on June 16, 2025. |
| NEW BUSINESS AWARDS |
| Effective for the first quarter of fiscal 2025, Leidos changed its backlog policy to include estimated future revenue on task orders expected to be awarded under sole source indefinite delivery/indefinite quantity (IDIQ) contracts. Under the new policy, backlog at the end of the quarter was $46.3 billion, of which $7.3 billion was funded. Net bookings totalled $2.1 billion in the quarter, representing a book-to-bill ratio of 0.5. The impact of the new policy on the book-to-bill ratio in the quarter is immaterial. |
| Included in the quarterly bookings were several notable awards: |
- Defence Threat Reduction Agency (DTRA) Integrated Information Technology Support Services. Leidos was awarded a new five-year task order with a ceiling value of $205 million to modernise and operate enterprise IT services for DTRA. Under the contract, Leidos will leverage experienced personnel, proven processes, and targeted innovation to enable DTRA to improve user experience, enhance Zero Trust cybersecurity compliance, increase operational efficiency, and support mission execution to deter, prevent, and prevail against the global threat landscape.
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- Defense Technical Information Center (DTIC) Signature Training Systems Development, Security, and Operations. The Naval Surface Warfare Centre Carderock Division awarded Leidos a five-year $150 million task order to provide engineering and software development capabilities to support Navy Signature Training Systems. The systems support Submarine, Surface Ship, and Integrated Undersea Surveillance shore-based and deployed simulation and training systems for acoustic and visual signature detection and recognition capabilities. The Leidos-led team provides systems engineering, development, integration, test and fielding of new and enhanced capabilities to fleet training locations and vessels.
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- Project Night Owl Managed Service Provider. The U.S. Air Force awarded Leidos a $148 million firm-fixed-price contract for managed services support for Project Night Owl, a critical national security system. Leidos will be responsible for managing and maintaining the system by delivering network, application, infrastructure and security support services.
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- DTIC Naval Information Warfare Centre (NIWC) Pacific Support. NIWC Pacific awarded Leidos a five-year $116 million task order to support two complementary projects. On the Blue Swordfish Project, Leidos will integrate specialised maritime payloads, including sensor packages, energy, and communications capabilities, onto Uncrewed Surface and Subsea Autonomous Vehicles. On the Maritime Test Bed Project, Leidos will provide shore-based and undersea naval infrastructure to support reliable, repeatable undersea testing of new and emerging capabilities for Navy program systems, prototypes, and industry or academic capabilities.
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- Department of the Interior Office of Wildland Fires Medical Qualification Determination Services. Leidos won a highly competitive $40 million single-award IDIQ to provide medical exams to wildland firefighters, expanding its managed health services to the Federal government. Leidos will provide comprehensive occupational medical exams, independent medical qualification determination, scheduling support and data and records management for all arduous duty wildland firefighters. The program also covers Bureau of Land Management law enforcement officers and communications tower climbers, and National Park Service law enforcement officers. Leidos will deploy its mobile medical clinics to service rural and remote locations across the country.
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| For the full document, click the link below |
| Leidos Holdings, Inc |
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