Leidos (LDOS) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue grew 7% year-over-year to $4.25 billion, with adjusted EBITDA margin at 14.2% and non-GAAP diluted EPS up 30%; net income rose 29% to $365 million.

• Reaffirmed full-year 2025 guidance, citing robust momentum, effective cost controls, and alignment with administration priorities.

• NorthStar 2030 strategy and continued technology investments focus on growth pillars: space/maritime, energy infrastructure, digital modernization/cyber, critical mission software, and managed health services.

• Accelerated $500M share repurchase completed and announced a $300M cyber acquisition to strengthen growth pillars.

• Growth driven by higher volumes and program wins across all segments, partially offset by contract completions.

Financial highlights

• Q1 revenue: $4.25B, up 7% organically year-over-year; adjusted EBITDA: $601M (14.2% margin), up 23% year-over-year.

• Non-GAAP net income: $391M; non-GAAP diluted EPS: $2.97, up 30% year-over-year.

• Net income (GAAP): $365M; operating income: $530M, up 27.7% year-over-year.

• Operating cash flow: $58M; free cash flow: $36M; DSO at 62 days.

• Backlog reached $46.3B, up from $41.7B, reflecting a policy change to include estimated future revenue on certain IDIQ contracts.

Outlook and guidance

• FY25 revenue guidance reaffirmed at $16.90–$17.30B; adjusted EBITDA margin mid-to-high 12%; non-GAAP EPS $10.35–$10.75; operating cash flow ~$1.45B.

• Guidance excludes pending cyber acquisition, expected to have immaterial impact in 2025.

• Bookings expected to be soft early in the year due to administration transition, with stronger impact in 2026.

• Management expects to meet liquidity needs through operating cash flow, available cash, and credit facilities over the next 12 months.

• No material impact is expected from new global minimum tax rules or international tariffs at this time.