Leidos (LDOS) investor relations material

Executive summary

• Q2 2025 revenue reached $4.25B, up 2.9–4.8% year-over-year, with net income up 21% to $393M and record profitability; adjusted EBITDA margin hit 15.2% and operating cash flow rose 28%.

• Raised full-year 2025 guidance, citing strong alignment with administration priorities, robust contract wins, and the One Big Beautiful Bill funding.

• Completed Kudu Dynamics acquisition for $291M, adding AI-enabled cyber capabilities and $149M in backlog.

• Book-to-bill ratio was 0.9 in Q2, with a major intelligence contract post-quarter that would have raised it to 1.3; backlog reached $46.2B.

• Continued focus on capital deployment, including $500M accelerated share repurchase, debt paydown, and further M&A.

Financial highlights

• Q2 revenues were $4.25B, up 2.9–3% year-over-year; adjusted EBITDA was $647M, up 16%, with a 15.2% margin.

• Non-GAAP diluted EPS grew 22% to $3.21; net income margin increased to 9.2%.

• Operating cash flow was $486M in Q2 and $544M for six months; free cash flow $457M, with 110% conversion.

• Q2 included $25M insurance reimbursement and $8M tax refund as one-time items.

• Cash and cash equivalents at quarter-end were $930M; total debt $5.1B.

Outlook and guidance

• 2025 revenue guidance raised to $17.00–$17.25B; adjusted EBITDA margin now expected in the mid-13% range.

• Non-GAAP diluted EPS guidance increased to $11.15–$11.45.

• Operating cash flow guidance raised to $1.65B, reflecting improved EBITDA and tax changes.

• 87% of revenue derived from U.S. government contracts; international sales accounted for 8%.

• New U.S. tax legislation (OBBBA) expected to reduce 2025 tax payments by $150M.