RESTON, Va., Feb. 11, 2025 /PRNewswire/ — Leidos Holdings, Inc. (NYSE: LDOS) today reported financial results for the fourth quarter and fiscal year 2024, highlighted by double-digit earnings growth, accelerating revenue growth, and excellent business development results. In addition, Leidos established guidance for 2025 that forecasts continued growth in revenues, non-GAAP diluted earnings per share, and cash flows provided by operating activities.
“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. In addition, our 2024 performance propelled us beyond the three-year targets established at our 2021 Investor Day.”
“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.
SUMMARY OF OPERATING RESULTS
(in millions, except margin and per share data)
Three Months Ended
Year Ended
January 3, 2025
December 29, 2023
January 3, 2025
December 29, 2023
Revenues
$ 4,365
$ 3,980
$ 16,662
$ 15,438
Net income
$ 282
$ 230
$ 1,251
$ 208
Net income margin
6.5 %
5.8 %
7.5 %
1.3 %
Diluted earnings per share (EPS)
$ 2.12
$ 1.66
$ 9.22
$ 1.44
Non-GAAP Measures*:
Adjusted EBITDA
$ 508
$ 452
$ 2,153
$ 1,669
Adjusted EBITDA margin
11.6 %
11.4 %
12.9 %
10.8 %
Non-GAAP diluted EPS
$ 2.37
$ 1.99
$ 10.21
$ 7.30
*
Non-GAAP financial measures should be considered in addition to, but not as a substitute for, the information provided in accordance with GAAP. Management believes that these non-GAAP measures provide another measure of Leidos’ results of operations and financial condition, including its ability to comply with financial covenants in our debt agreements. See Non-GAAP Financial Measures at the end of this press release for more information and a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures.
Revenues were $4.37 billion for the quarter and $16.66 billion for the year, up 10% and 8% over the comparable 2023 periods, respectively. For the quarter and the year, revenues grew year-over-year due to strong demand across all customer segments, especially for managed health services.
For the quarter, net income was $282 million, or $2.12 per diluted share, up 23% and 28%, respectively, compared to the fourth quarter of fiscal year 2023. Net income margin was 6.5%, up 70 basis points year-over-year. Adjusted EBITDA was $508 million (11.6% margin), up 12% over the fourth quarter of 2023. Non-GAAP net income was $316 million, which generated non-GAAP diluted EPS of $2.37. Non-GAAP net income was up 14%, and non-GAAP diluted EPS was up 19% compared to the fourth quarter of fiscal year 2023.
For the year, net income was $1,251 million, or $9.22 per diluted share. Net income and diluted EPS were up 501% and 540%, respectively, compared to fiscal year 2023. Net income margin for the year increased to 7.5% from 1.3% in fiscal year 2023, which included pre-tax impairment and restructuring charges associated with the Security Enterprise Solutions (SES) reporting unit. Adjusted EBITDA was $2.15 billion (12.9% margin), up 29% over fiscal year 2023. Non-GAAP net income was $1.39 billion, which generated non-GAAP diluted EPS of $10.21. Non-GAAP net income was up 36%, and non-GAAP diluted EPS was up 40% compared to fiscal year 2023.
The primary drivers of increased earnings for the quarter and the year were increased volumes on managed health services programs and improved program execution and cost control across the company.
CASH FLOW SUMMARY
In the fourth quarter, Leidos generated $299 million of net cash provided by operating activities and used $86 million in investing activities and $440 million in financing activities. Net cash provided by operating activities benefited from strong EBITDA performance, collections, and working capital management. Days Sales Outstanding (DSO) for the quarter was 59, unchanged from the from the third quarter of 2024.
Investing activities consisted exclusively of property, equipment and software payments, which resulted in quarterly free cash flow of $213 million. Financing activities were driven by $459 million returned to shareholders, including $406 million in share repurchases and $53 million as part of a regular quarterly cash dividend program.
For the year, net cash provided by operating activities was $1.39 billion and free cash flow was $1.24 billion. For the year Leidos used $142 million in investing activities and $1,084 million in financing activities. As of January 3, 2025, the Company had $943 million in cash and cash equivalents and $4.7 billion in debt.
On February 7, 2025, the Leidos Board of Directors declared that Leidos will pay a cash dividend of $0.40 per share on March 28, 2025, to stockholders of record at the close of business on March 14, 2025.
NEW BUSINESS AWARDS
Net bookings totaled $7.6 billion in the fourth quarter and $23.4 billion for fiscal year 2024, representing book-to-bill ratios of 1.7 and 1.4, respectively. As a result, backlog at the end of fiscal year 2024 was $43.6 billion, of which $8.4 billion was funded. Included in the quarterly bookings were several notable awards:
FORWARD GUIDANCE
Leidos is initiating fiscal year 2025 guidance as specified in the table below.
Measure
FY25 Guidance
Revenues (billions)
$16.9 – $17.3
Adjusted EBITDA Margin
Mid-High 12%
Non-GAAP Diluted EPS
$10.35 – $10.75
Cash Flows Provided by Operating Activities (billions)
Approximately $1.45
For information regarding adjusted EBITDA margin and non-GAAP diluted EPS, see the related explanations and reconciliations to GAAP measures included elsewhere in this release.
Leidos does not provide a reconciliation of forward-looking adjusted EBITDA margins or non-GAAP diluted EPS to net income margin or diluted EPS, due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation. Because certain deductions for non-GAAP exclusions used to calculate projected net income may vary significantly based on actual events, Leidos is not able to forecast on a GAAP basis with reasonable certainty all deductions needed in order to provide a GAAP calculation of projected net income margin, diluted EPS or net income attributable to Leidos shareholders at this time. The amounts of these deductions may be material and, therefore, could result in projected net income margin, net income attributable to Leidos shareholders and diluted EPS being materially less than projected adjusted EBITDA margins and non-GAAP diluted EPS.
CONFERENCE CALL INFORMATION
Leidos management will discuss operations and financial results in an earnings conference call beginning at 8 A.M. eastern time on February 11, 2025. A live audio broadcast of the conference call along with a supplemental presentation will be available to the public through links on the Leidos Investor Relations website (http://ir.leidos.com). An archived version of the webcast will be available on the Leidos Investor Relations website until February 11, 2026.
ABOUT LEIDOS
Leidos is an industry and technology leader serving government and commercial customers with smarter, more efficient digital and mission innovations. Headquartered in Reston, Virginia, with 48,000 global employees, Leidos reported annual revenues of approximately $16.7 billion for the fiscal year ended January 3, 2025. For more information, visit www.leidos.com.
FORWARD-LOOKING STATEMENTS
Certain statements in this release contain or are based on “forward-looking” information within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by words such as “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “guidance” and similar words or phrases. Forward-looking statements in this release include, among others, estimates of our future growth, strategy and financial and operating performance, including future revenues, adjusted EBITDA margins, diluted EPS (including on a non-GAAP basis) and cash flows provided by operating activities, as well as statements about our business contingency plans, government budgets and the ongoing Continuing Resolution, uncertainties in tax due to new tax legislation or other regulatory developments, strategy, planned investments, sustainability goals and our future dividends, share repurchases, capital expenditures, debt repayments, acquisitions, dispositions and cash flow conversion. These statements reflect our belief and assumptions as to future events that may not prove to be accurate.
Actual performance and results may differ materially from those results anticipated by our guidance and other forward-looking statements made in this release depending on a variety of factors, including, but not limited to: developments in the U.S. government defense and non-defense budgets, including budget reductions, sequestration, implementation of spending limits or changes in budgetary priorities, delays in the U.S. government budget process or a government shutdown, or the U.S. government’s failure to raise the debt ceiling, which increases the possibility of a default by the U.S. government on its debt obligations, related credit-rating downgrades, or an economic recession; uncertainties in tax due to new tax legislation or other regulatory developments; deterioration of economic conditions or weakening in credit or capital markets; uncertainty in the consequences of current and future geopolitical events; inflationary pressures and fluctuations in interest rates; delays in the U.S. government contract procurement process or the award of contracts and delays or loss of contracts as a result of competitor protests; changes in U.S. government procurement rules, regulations and practices, including its organizational conflict of interest rules; changes in global trade policies, tariffs and other measures that could restrict international trade; increased preference by the U.S. government for minority-owned, small and small disadvantaged businesses; fluctuations in foreign currency exchange rates; our compliance with various U.S. government and other government procurement rules and regulations; governmental reviews, audits and investigations of our company; our ability to effectively compete and win contracts with the U.S. government and other customers; our ability to respond rapidly to emerging technology trends, including the use of artificial intelligence; our reliance on information technology spending by hospitals/healthcare organizations; our reliance on infrastructure investments by industrial and natural resources organizations; energy efficiency and alternative energy sourcing investments; investments by U.S. government and commercial organizations in environmental impact and remediation projects; the effects an epidemic, pandemic or similar outbreak may have on our business, financial position, results of operations and/or cash flows; our ability to attract, train and retain skilled employees, including our management team, and to obtain security clearances for our employees; our ability to accurately estimate costs, including cost increases due to inflation, associated with our firm-fixed-price contracts and other contracts; resolution of legal and other disputes with our customers and others or legal or regulatory compliance issues; cybersecurity, data security or other security threats, system failures or other disruptions of our business; our compliance with international, federal, state and local laws and regulations regarding privacy, data security, protection, storage, retention, transfer, disposal and other processing, technology protection and personal information; the damage and disruption to our business resulting from natural disasters and the effects of climate change; our ability to effectively acquire businesses and make investments; our ability to maintain relationships with prime contractors, subcontractors and joint venture partners; our ability to manage performance and other risks related to customer contracts; the failure of our inspection or detection systems to detect threats; the adequacy of our insurance programs, customer indemnifications or other liability protections designed to protect us from significant product or other liability claims, including cybersecurity attacks; our ability to manage risks associated with our international business; our ability to comply with the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act of 2010 and similar worldwide anti-corruption and anti-bribery laws and regulations; our ability to protect our intellectual property and other proprietary rights by third parties of infringement, misappropriation or other violations by us of their intellectual property rights; our ability to prevail in litigation brought by third parties of infringement, misappropriation or other violations by us of their intellectual property rights; our ability to declare or increase future dividends based on our earnings, financial condition, capital requirements and other factors, including compliance with applicable law and our agreements; our ability to grow our commercial health and infrastructure businesses, which could be negatively affected by budgetary constraints faced by hospitals and by developers of energy and infrastructure projects; our ability to successfully integrate acquired businesses; and our ability to execute our business plan and long-term management initiatives effectively and to overcome these and other known and unknown risks that we face.
These are only some of the factors that may affect the forward-looking statements contained in this release. For further information concerning risks and uncertainties associated with our business, please refer to the filings we make from time to time with the U.S. Securities and Exchange Commission (“SEC”), including the “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Legal Proceedings” sections of our latest Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, all of which may be viewed or obtained through the Investor Relations section of our website at www.leidos.com.
All information in this release is as of February 11, 2025. Leidos expressly disclaims any duty to update the guidance or any other forward-looking statement provided in this release to reflect subsequent events, actual results or changes in Leidos’ expectations. Leidos also disclaims any duty to comment upon or correct information that may be contained in reports published by investment analysts or others.
CONTACTS:
Investor Relations:
Media Relations:
Stuart Davis
Victor Melara
571.526.6124
703.431.4612
LEIDOS HOLDINGS, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended
Year Ended
(in millions, except per share data)
January 3,
2025
December 29,
2023
January 3,
2025
December 29,
2023
Revenues
$ 4,365
$ 3,980
$ 16,662
$ 15,438
Cost of revenues
3,672
3,385
13,864
13,194
Selling, general and administrative expenses
279
233
983
942
Acquisition, integration and restructuring costs
2
10
16
24
Goodwill impairment charges
—
(3)
—
596
Asset impairment charges
5
3
11
91
Equity earnings of non-consolidated subsidiaries
(14)
(9)
(39)
(30)
Operating income
421
361
1,827
621
Non-operating expense:
Interest expense, net
(47)
(49)
(193)
(212)
Other income (expense), net
1
(2)
5
(6)
Income before income taxes
375
310
1,639
403
Income tax expense
(93)
(80)
(388)
(195)
Net income
282
230
1,251
208
Less: net (loss) income attributable to non-controlling
interest
(2)
1
(3)
9
Net income attributable to Leidos common stockholders
$ 284
$ 229
$ 1,254
$ 199
Earnings per share:
Basic
$ 2.14
$ 1.67
$ 9.36
$ 1.45
Diluted
2.12
1.66
9.22
1.44
Weighted average number of common shares outstanding:
Basic
133
137
134
137
Diluted
134
138
136
138
Cash dividends declared per share
$ 0.40
$ 0.38
$ 1.54
$ 1.46
LEIDOS HOLDINGS, INC.
UNAUDITED CONSOLIDATED BALANCE SHEETS
(in millions, except share and per share data)
January 3,
2025
December 29,
2023
Assets
Cash and cash equivalents
$ 943
$ 777
Receivables, net
2,645
2,429
Inventory, net
315
310
Other current assets
525
489
Total current assets
4,428
4,005
Property, plant and equipment, net
991
961
Intangible assets, net
517
667
Goodwill
6,084
6,112
Operating lease right-of-use assets, net
560
512
Other long-term assets
524
438
Total assets
$ 13,104
$ 12,695
Liabilities and Equity
Accounts payable and accrued liabilities
$ 2,225
$ 2,277
Accrued payroll and employee benefits
811
695
Current portion of long-term debt
618
18
Total current liabilities
3,654
2,990
Long-term debt, net of current portion
4,052
4,664
Operating lease liabilities
621
516
Other long-term liabilities
