Leidos (LDOS) Q3 2025 earnings summary

Executive summary

• Achieved record Q3 2025 revenues of $4.47 billion, up 7% year-over-year, with 6% organic growth and strong performance across all segments, especially national security and defense.

• Adjusted EBITDA margin reached 13.8% ($616 million), and operating cash flow was $711 million.

• Net income attributable to common stockholders was $369 million ($2.82 per diluted share), up 2% year-over-year; non-GAAP diluted EPS was $3.05, up 4%.

• Raised 2025 guidance for the second time, reflecting robust results and portfolio alignment with customer priorities.

• Strategic focus on growth pillars: space and maritime, energy infrastructure, digital modernization, cyber, mission software, and managed health services, with accelerated investments in AI and innovation.

Financial highlights

• Q3 revenues were $4.47 billion, up 7% year-over-year; organic revenue growth was 6%.

• Adjusted EBITDA for the quarter was $616 million, margin 13.8%, up 3% year-over-year.

• Non-GAAP diluted EPS grew 4% to $3.05; net income margin was 8.3%.

• Free cash flow was $680 million, with a conversion ratio of 171%.

• Book-to-bill ratio was 1.3x, with net bookings of $5.9 billion and backlog at $47.7 billion, up 5% year-over-year.

Outlook and guidance

• Fiscal year 2025 revenue guidance maintained at $17.00–$17.25 billion.

• Adjusted EBITDA margin guidance raised to high 13% range; non-GAAP EPS guidance raised to $11.45–$11.75.

• Operating cash flow guidance maintained at ~$1.65 billion, with wider ranges to hedge against government uncertainty.

• Effective tax rate expected between 23.5%–24.0%.

• Management expects to meet liquidity needs through operating cash flow, available cash, and credit facilities.