Leidos Reports Q4 Earnings Beat Expectations Amid Revenue Decline
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 4 days ago
0mins
Should l Buy LDOS?
Source: seekingalpha
Leidos Holdings Inc. shares fell 4.04% as the stock hit a 20-day low amid broader market weakness, with the Nasdaq-100 down 0.90% and the S&P 500 down 0.53%.
The company reported a Q4 non-GAAP EPS of $2.76, exceeding expectations by $0.15, despite a revenue decline of 4% year-over-year to $4.2 billion, primarily due to external challenges such as a government shutdown. Leidos achieved strong order growth with net bookings of $5.6 billion in Q4, indicating robust demand across various sectors. The company also provided FY26 guidance, projecting revenues between $17.5 billion and $17.9 billion, reflecting confidence in sustained growth.
Despite the revenue decline, the earnings beat showcases effective cost management and strong market demand, positioning Leidos favorably for future growth as it continues to navigate challenges in the defense sector.
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Analyst Views on LDOS
Wall Street analysts forecast LDOS stock price to rise
11 Analyst Rating
7 Buy
4 Hold
0 Sell
Moderate Buy
Current: 176.300
Low
178.00
Averages
219.70
High
235.00
Current: 176.300
Low
178.00
Averages
219.70
High
235.00
About LDOS
Leidos Holdings, Inc. is a holding company, which operates through its wholly owned subsidiary, Leidos, Inc. (Leidos). The Company’s segments include National Security & Digital, Health & Civil, Commercial & International and Defense Systems. Its National Security & Digital business provides technologically advanced services, solutions and products, as well as mission software capabilities for defense and intelligence customers in the areas of cyber, logistics, security operations and decision analytics. Its Health & Civil business provides services and solutions to federal and commercial customers in the areas of public health, care coordination, life and environmental sciences and transportation. Its Commercial & International business delivers a portfolio of products, services, and solutions aimed at securing national assets, modernizing energy and critical infrastructure, and enhancing mission outcomes. The Company serves government and commercial customers.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Leidos to Release Q4 Earnings with Positive Expectations
- Earnings Release Announcement: Leidos Holdings is set to release its fourth-quarter earnings on February 17, with analysts projecting earnings per share of $2.61, an increase from $2.37 in the same period last year, indicating sustained improvement in profitability.
- Revenue Expectations: Analysts estimate that Leidos will report quarterly revenue of $4.31 billion, slightly down from $4.37 billion last year, yet still reflecting the company's stable performance in the market.
- Dividend Declaration: On February 13, Leidos announced a quarterly cash dividend of $0.43 per share, demonstrating the company's commitment to shareholder returns and bolstering investor confidence.
- Stock Performance: Leidos shares gained 2.8% to close at $176.30 last Friday, reflecting market optimism regarding the upcoming earnings report and the company's growth potential.
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Leidos Reports 2025 Financial Results: Revenue Growth and Profitability Improvement
- Revenue and Profit Growth: Leidos reported fiscal year 2025 revenues of $17.17 billion, a 3% increase year-over-year, with Q4 revenues at $4.21 billion, down 4% due to government shutdown impacts, yet net income rose to $1.46 billion, reflecting a 17% increase, showcasing enhanced profitability.
- Strong Cash Flow Performance: The company generated $495 million in net cash from operating activities in Q4, the highest in its history, while free cash flow for the year grew by 26% to $1.63 billion, achieving a cash flow conversion rate of 104%, providing robust funding for future investments.
- Strategic Acquisition Plans: Leidos is set to acquire power design firm Entrust for $2.4 billion, which will broaden its utility client base and enhance innovation capabilities in power delivery, with the transaction expected to close in the first half of fiscal 2026.
- Positive Future Outlook: For fiscal year 2026, Leidos projects revenues between $17.5 billion and $17.9 billion, with non-GAAP diluted EPS expected to range from $12.05 to $12.45, indicating strong growth potential in national security and digital modernization sectors.
See More
Leidos Q4 Earnings Beat Expectations Despite Revenue Decline
- Earnings Beat: Leidos reported a Q4 non-GAAP EPS of $2.76, exceeding expectations by $0.15, indicating strong profitability despite a revenue decline, which reflects effective cost management.
- Revenue Decline Factors: Q4 revenue was $4.2 billion, down 4% year-over-year, primarily due to an extra work week in FY2024 and a six-week government shutdown in FY2025, highlighting external challenges impacting performance.
- Strong Order Growth: The company achieved net bookings of $5.6 billion in Q4 with a book-to-bill ratio of 1.3, and $17.5 billion for the year with a ratio of 1.0, demonstrating robust demand across customer segments, particularly in integrated air defense and cybersecurity.
- FY26 Guidance: Leidos has set FY2026 revenue guidance between $17.5 billion and $17.9 billion, with non-GAAP diluted EPS projected between $12.05 and $12.45, reflecting confidence in sustained growth driven by strong market demand.
See More
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Leidos to Release Q4 Earnings with Positive Expectations
- Earnings Release Announcement: Leidos Holdings is set to release its fourth-quarter earnings on February 17, with analysts projecting earnings per share of $2.61, an increase from $2.37 in the same period last year, indicating sustained improvement in profitability.
- Revenue Expectations: Analysts estimate that Leidos will report quarterly revenue of $4.31 billion, slightly down from $4.37 billion last year, yet still reflecting the company's stable performance in the market.
- Dividend Declaration: On February 13, Leidos announced a quarterly cash dividend of $0.43 per share, demonstrating the company's commitment to shareholder returns and bolstering investor confidence.
- Stock Performance: Leidos shares gained 2.8% to close at $176.30 last Friday, reflecting market optimism regarding the upcoming earnings report and the company's growth potential.
See More
Leidos Reports 2025 Financial Results: Revenue Growth and Profitability Improvement
- Revenue and Profit Growth: Leidos reported fiscal year 2025 revenues of $17.17 billion, a 3% increase year-over-year, with Q4 revenues at $4.21 billion, down 4% due to government shutdown impacts, yet net income rose to $1.46 billion, reflecting a 17% increase, showcasing enhanced profitability.
- Strong Cash Flow Performance: The company generated $495 million in net cash from operating activities in Q4, the highest in its history, while free cash flow for the year grew by 26% to $1.63 billion, achieving a cash flow conversion rate of 104%, providing robust funding for future investments.
- Strategic Acquisition Plans: Leidos is set to acquire power design firm Entrust for $2.4 billion, which will broaden its utility client base and enhance innovation capabilities in power delivery, with the transaction expected to close in the first half of fiscal 2026.
- Positive Future Outlook: For fiscal year 2026, Leidos projects revenues between $17.5 billion and $17.9 billion, with non-GAAP diluted EPS expected to range from $12.05 to $12.45, indicating strong growth potential in national security and digital modernization sectors.
See More
Leidos Q4 Earnings Beat Expectations Despite Revenue Decline
- Earnings Beat: Leidos reported a Q4 non-GAAP EPS of $2.76, exceeding expectations by $0.15, indicating strong profitability despite a revenue decline, which reflects effective cost management.
- Revenue Decline Factors: Q4 revenue was $4.2 billion, down 4% year-over-year, primarily due to an extra work week in FY2024 and a six-week government shutdown in FY2025, highlighting external challenges impacting performance.
- Strong Order Growth: The company achieved net bookings of $5.6 billion in Q4 with a book-to-bill ratio of 1.3, and $17.5 billion for the year with a ratio of 1.0, demonstrating robust demand across customer segments, particularly in integrated air defense and cybersecurity.
- FY26 Guidance: Leidos has set FY2026 revenue guidance between $17.5 billion and $17.9 billion, with non-GAAP diluted EPS projected between $12.05 and $12.45, reflecting confidence in sustained growth driven by strong market demand.
See More
Market Movers: Norwegian Cruise Line, Masimo, Paramount Skydance, Infosys, ZIM, and Others
- Market Overview: Stock futures experienced a decline on Tuesday.
- Investor Behavior: Investors are continuing to sell off tech stocks.
- Trend Continuation: The selloff in tech stocks is part of a recent trend.
- Market Sentiment: Overall investor sentiment appears to be negative.
See More
Key Companies to Monitor This Week: PCE, Walmart, Palo Alto, Analog Devices, Deere, and Others
- Market Performance: Equities experienced a decline last week, with all three major indexes falling by at least 1.2%.
- Economic Indicators: This downturn occurred despite a better-than-expected jobs report from the Bureau of Labor Statistics and a relatively stable inflation report.
See More
AI Turbulence Impacts Market Performance
- Increased Market Volatility: Last week, stocks in software, real estate, financial services, and logistics faced selling pressure due to concerns over AI-related disruptions, with the Nasdaq Composite falling 0.2% and a weekly loss of 2.1%, indicating market sensitivity to AI impacts.
- Consumer Spending Data Focus: This week's highlight will be the Personal Consumption Expenditures (PCE) report on Friday, which will provide insights into consumer spending in December and inflation trends, especially following last week's unexpected slowdown in the Consumer Price Index (CPI).
- Corporate Earnings in Spotlight: Walmart (WMT) is set to release its fourth-quarter earnings on Thursday, marking the first report under new CEO John Furner, making it a key indicator of consumer spending that the market is eagerly anticipating.
- Ongoing AI Impact: As AI tools' potential effects intensify across various sectors, software stocks like Salesforce (CRM) and ServiceNow (NOW) have seen significant declines, reflecting the market's heightened vigilance regarding AI disruptions, necessitating close monitoring of future industry developments.
See More
