Leidos Holdings Earnings Call Transcripts
Fiscal Year 2026
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The conference highlighted robust growth in intelligence, digital, energy, and defense segments, with AI integration and federal IT adaptation as key themes. Defense and energy are set for double-digit growth, while health and homeland remain stable with long-term opportunities.
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Dynamic market conditions and increased government spending are driving growth across five redefined business sectors. Strategic investments in R&D, AI, and recent acquisitions are enhancing capabilities, with a focus on operational efficiency and customer value.
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The acquisition of ENTRUST strengthens the energy growth pillar, doubling scale and expanding capabilities in power and gas infrastructure. The $2.4B all-cash deal is expected to deliver significant synergies, accelerate growth, and enhance margins, with integration targeted by end of 2026.
Fiscal Year 2025
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FY2025 delivered strong results with revenue at the top of guidance, 17% EPS growth, and robust cash flow. FY2026 guidance calls for up to 4% revenue growth, mid-13% EBITDA margin, and continued investment in growth pillars, with momentum expected to accelerate in the second half.
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Strong performance and margin expansion were achieved despite a challenging government environment, with growth expected in defense, cyber, and energy infrastructure. Health remains robust, with key contract recompetes ahead, and AI-driven efficiencies are set to accelerate transformation through 2028.
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Q3 2025 saw 7% revenue growth, 13.8% adjusted EBITDA margin, and strong cash flow, prompting a second guidance raise for the year. All segments contributed to growth, with robust backlog and continued investment in innovation, AI, and strategic M&A, despite government shutdown risks.
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Q2 delivered record profitability, 4.8% YTD revenue growth, and a 28% increase in operating cash flow. Raised 2025 guidance across all metrics, driven by strong segment performance, strategic acquisitions, and robust market demand in defense, health, and digital modernization.
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Q1 delivered 7% organic revenue growth, 14.2% adjusted EBITDA margin, and 30% EPS growth. 2025 guidance is reaffirmed, with strong performance across all segments and strategic moves in cyber and share repurchases. Backlog and pipeline remain robust.
Fiscal Year 2024
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Delivered record 2024 results, exceeding guidance with strong revenue, margin, and cash flow growth. Major contract wins and a robust backlog support a positive 2025 outlook, with continued focus on high-margin growth pillars and shareholder returns.
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Management is proactively positioning for government efficiency trends, leveraging a robust strategic planning process and strong leadership to drive growth across Health, National Security, and other segments. Financial flexibility supports ongoing investment, with sustained high margins in Health and new contract wins expected to accelerate growth in 2025.
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Delivered record Q3 results with 7% revenue growth, 44% EPS growth, and a 14.2% adjusted EBITDA margin. Raised 2024 guidance across all metrics, driven by strong performance in Health and Civil and robust backlog. Continued share repurchases and dividend increases reflect confidence in future growth.
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Leadership realignment and strategic planning are driving strong growth, with 2024 outlook raised twice and margins at robust levels. Key business segments show momentum, especially in Health and Civil, Defense Systems, and National Security, while capital deployment remains disciplined and focused on shareholder returns.
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Record Q2 results with 7.7% revenue growth, 13.5% adjusted EBITDA margin, and 46% EPS increase year-over-year. Raised full-year guidance, with strong cash flow and robust backlog, while navigating temporary VA budget headwinds and investing in innovation.
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Strong growth in health and civil segments, driven by VA demand and innovation, is complemented by margin improvement efforts in national security, digital, and commercial businesses. Major contracts like DES and CHS-6 are expected to ramp up, supporting a robust pipeline and positive outlook for 2025.