Leidos (LDOS) Q4 2024 earnings summary

Executive summary

• Delivered 2024 results above the high end of prior guidance, exceeding three-year performance targets set in 2021, with record revenues of $16.66B and strong business development results.

• Achieved organic revenue growth CAGR of 6.6%, adjusted EBITDA margin of 12.9%, and 100% free cash flow conversion over three years.

• Launched North Star 2030 growth strategy, focusing on high-demand, high-profitability pillars aligned with government efficiency and modernization priorities.

• Positioned to benefit from new administration's focus on IT modernization, warfighting capabilities, and privatization.

• Backlog reached $43.6B, up 18% year-over-year, with a record Q4 book-to-bill of 1.7x and full-year book-to-bill of 1.4x.

Financial highlights

• FY24 revenue reached $16.66B, up 7.9% from FY23; Q4 revenue was $4.37B, up 9.7% year-over-year.

• Adjusted EBITDA for FY24 was $2.15B (12.9% margin, up 210 bps); Q4 adjusted EBITDA was $508M (11.6% margin).

• Non-GAAP diluted EPS for FY24 was $10.21, up 40% year-over-year; Q4 EPS was $2.37, up 19% year-over-year.

• Free cash flow for the year was $1.24B, with operating cash flow at $1.4B.

• Returned $1.11B to shareholders in FY24 via share repurchases and dividends, exceeding initial commitment.

Outlook and guidance

• FY25 revenue guidance: $16.9B–$17.3B, up to 4% growth over 2024.

• FY25 adjusted EBITDA margin expected in the mid- to high-12% range.

• FY25 non-GAAP diluted EPS guidance: $10.35–$10.75; operating cash flow expected at ~$1.45B.

• Capital expenditures targeted at $230M (1.3% of revenues); share repurchase activity to remain consistent.

• Guidance reflects ongoing continuing resolution and pivot away from low-margin work.