Leidos Holdings Inc Earnings Overview
Leidos Holdings Inc., a leading provider of mission-focused technology and engineering solutions for defense, intelligence, and civil markets, has reported a notable performance for the third quarter of fiscal year 2025. Highlighted by strong earnings and revenue growth, the company has maintained robust financial momentum, even amidst external challenges such as a government shutdown. Leidos' strategic alignment with national priorities and its commitment to delivering innovative solutions have contributed to its sustained success.
Leidos Holdings Inc Results
Leidos Holdings Inc. released its financial results, showcasing impressive year-over-year growth. Below is a summary table highlighting key metrics:
| Financial Metric | Q3 2025 | Q3 2024 | Year-over-Year Change (%) |
|---|---|---|---|
| Revenues (in billions) | $4.47 | $4.18 | +7% |
| Net Income (in millions) | $369 | $362 | +2% |
| Diluted EPS | $2.82 | $2.69 | +5% |
| Adjusted EBITDA (in millions) | $616 | $598 | +3% |
| Non-GAAP Diluted EPS | $3.05 | $2.93 | +4% |
| Cash Flows from Operations (in millions) | $711 | N/A | N/A |
Although Leidos' net income margin dipped slightly from 8.6% to 8.3%, the company demonstrated resilient financial performance through prudent cost management and significant contract awards.
Revenue Breakdown
Leidos operates through various segments, each contributing uniquely to the company's overall revenue performance. The following table presents a breakdown of the company's major revenue segments:
| Segment | Q3 2025 Revenue (in millions) | Q3 2024 Revenue (in millions) | Year-over-Year Change (%) |
|---|---|---|---|
| National Security & Digital | $2,020 | $1,870 | +8% |
| Health & Civil | $1,300 | $1,226 | +6% |
| Commercial & International | $571 | $576 | -1% |
| Defense Systems | $582 | $524 | +11% |
In-Depth Segment Analysis
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National Security & Digital : This segment experienced a significant 8% growth, largely driven by new contract awards and heightened demand for defense IT and Intelligence Community mission support. Despite the growth, the operating income margin slightly decreased to 9.5% from 10.0% the previous year.
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Health & Civil : With a 6% revenue increase, this segment benefited from sustained high volumes and favorable timing of incentive awards within its managed health services. The operating income margin jumped to 25.2% from 23.4%, showcasing enhanced profitability.
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Commercial & International : This segment faced a mild revenue decline, attributed mainly to adjustments in product mix within its security products business, though partially offset by ongoing demand for energy infrastructure services.
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Defense Systems : Experiencing the highest growth of 11%, this segment's success was fueled by increased volumes in integrated air defense systems and radar surveillance systems. However, the operating income margin fell from 7.1% to 6.4%, due to a higher proportion of material costs during production phases.
Key Developments
During the quarter, Leidos secured several significant contracts, expanding its backlog to an impressive $47.7 billion—a 5% increase from the previous year. Notably, the company received a $2.2 billion Department of Defense contract for classified mission support and a $760 million NASA contract to enhance astronaut health and performance for future space missions.
Additionally, Leidos continued its active engagement in international projects, such as modernizing Kazakhstan's air traffic control system through a long-term agreement that underscores the company’s capability in delivering technology solutions on a global scale.
Comments from Company Officers
In an optimistic statement, Tom Bell, the CEO of Leidos, expressed pride in the company's ability to deliver strong results amidst challenging conditions. He highlighted the alignment with governmental priorities and assured investors of the company's robust future prospects, noting that Leidos raised its 2025 earnings and margin guidance while maintaining revenue and cash guidance despite macroeconomic uncertainties.
Dividends and Share Repurchases
Leidos demonstrated its commitment to returning value to shareholders by repurchasing $102 million worth of shares during the quarter and declaring a cash dividend of $0.43 per share—a 7.5% increase over the previous quarter. The company's strategic approach to maintaining a balanced capital allocation reinforces confidence in its shareholder-oriented policies.
Leidos Holdings Inc Stock Forecast
Based on the company's strong financial performance, strategic expansions, and robust backlog growth, Leidos' stock is poised for favorable outcomes. Analysts project a high estimate of $1.50 per share, reflecting continued growth in defense and national security segments. Conversely, a low estimate could stand at $1.20 per share, in the event of unforeseen macroeconomic challenges. With a market capitalization of approximately $19.9 billion, Leidos remains well-positioned within its industry landscape.
In conclusion, Leidos Holdings Inc. exemplifies resilience and strategic growth in a challenging fiscal environment. Its alignment with key national priorities and focus on innovation underpin its stable financial performance and promising future outlook.
