Leidos (LDOS) Q4 2023 earnings summary

Executive summary

• FY23 revenue was $15.438B, up 7.2%; adjusted EBITDA rose 12% to $1.67B, with a 10.8% margin, and non-GAAP diluted EPS increased to $7.30.

• Q4 revenue reached $3.980B, up 7.7%; Q4 adjusted EBITDA margin was 11.4%, and non-GAAP diluted EPS was $1.99.

• All 2023 financial guidance metrics were exceeded; improved program execution, cost controls and cash generation supported the year-end results.

Financial highlights

• FY23 GAAP net income was $208M and diluted EPS was $1.44; non-GAAP net income was $1.02B and diluted EPS was $7.30.

• Q4 GAAP net income was $230M and diluted EPS was $1.66; non-GAAP net income was $276M and diluted EPS was $1.99.

• FY23 organic revenue grew 7% to $15.343B; reported revenue was $15.438B.

• FY23 pre-tax impairment and restructuring charges totaled $699M, primarily related to the SES reporting unit.

Outlook and guidance

• FY24 revenue guidance is $15.7B–$16.1B; adjusted EBITDA margin is guided to the mid-to-high 10% range, and non-GAAP diluted EPS to $7.50–$7.90.

• FY24 operating cash flow guidance is ~$1.1B, including $60M of estimated cash taxes tied to R&D cost capitalization and amortization.

• Budget uncertainty was factored conservatively into guidance; financial performance was cited as consistent with 2021 Investor Day targets.