Financial Data and Key Metrics Changes - The company reported a top-line growth of 7% for the quarter, with revenue reaching $4.47 billion, and a year-to-date revenue growth of 5% [3][18] - Adjusted EBITDA margin was reported at 13.8%, with adjusted EBITDA of $616 million, reflecting a 3% year-over-year increase [19] - Non-GAAP diluted EPS grew by 4% to $3.05, supported by a lower share count [19] Business Line Data and Key Metrics Changes - National security and digital revenues increased by 8% year-over-year, driven by recent contract awards and increased volumes for defense IT and mission support [20] - Health and civil revenues grew by 6% year-over-year, with a record non-GAAP operating income margin of 25.7% [21] - Defense systems segment grew by 11% year-over-year, marking its seventh consecutive period of high single to low double-digit growth [22] Market Data and Key Metrics Changes - The company experienced a 27% sequential increase in funded backlog, indicating strong customer demand [15] - The energy infrastructure business has grown significantly, now representing over $600 million in annual revenues, driven by robust investments in U.S. energy infrastructure [9] Company Strategy and Development Direction - The North Star 2030 strategy is guiding the company's actions, focusing on five growth pillars: space and maritime, energy infrastructure, digital modernization and cyber, mission software, and managed health services [7][6] - The company is committed to investing in innovation and technology to meet customer needs, particularly in defense tech and energy infrastructure [5][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the current government shutdown, noting that most programs have not been impacted [3][18] - The company raised its guidance for 2025, reaffirming revenue guidance of $17 billion to $17.25 billion and increasing adjusted EBITDA margin guidance [24][17] Other Important Information - The company repurchased $100 million worth of shares and accelerated the payoff of $450 million on its term loan [16] - A dividend increase of 7.5% was announced, reflecting confidence in the company's earnings and cash generation potential [16] Q&A Session Summary Question: How does the company view M&A in the current environment? - The company is focused on shareholder-friendly capital deployment and will consider inorganic growth as part of its strategy, particularly in defined growth areas [27] Question: What are the growth prospects for the defense systems segment? - The defense systems business is expected to deliver significant value through various franchise programs, with a focus on air and base defense systems and hypersonic missiles [28] Question: How is the company managing the impact of the government shutdown? - The company has shown resilience, with the FedSiv portfolio performing well despite the shutdown, and expects to continue executing effectively [30] Question: What is the outlook for the health and civil segment? - The health and civil segment is expected to sustain strong performance, driven by ongoing investments in technology and innovation [31] Question: What are the expectations for bid submissions next year? - The company anticipates a significant increase in bid submissions next year, with a robust pipeline of $69 billion in near-term opportunities [35] Question: How is the international business performing? - The international business, particularly in Australia and the U.K., is seen as a growth area, with a focus on aligning with the North Star 2030 strategy [54][55]

Group 1 - The article does not provide any specific content or key points related to a company or industry [1]

Core Insights - Leidos reported quarterly earnings of $3.05 per share, exceeding the Zacks Consensus Estimate of $2.61 per share, and showing an increase from $2.93 per share a year ago, resulting in an earnings surprise of +16.86% [1] - The company achieved revenues of $4.47 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 4.76% and up from $4.19 billion year-over-year [2] - Leidos shares have increased approximately 34% year-to-date, outperforming the S&P 500's gain of 16.5% [3] Earnings Outlook - The future performance of Leidos stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [4][6] - The current consensus EPS estimate for the upcoming quarter is $2.62 on revenues of $4.39 billion, and for the current fiscal year, it is $11.41 on revenues of $17.15 billion [7] Industry Context - The Computers - IT Services industry, to which Leidos belongs, is currently ranked in the top 28% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - The correlation between near-term stock movements and earnings estimate revisions suggests that tracking these revisions can provide insights into stock performance [5]

Leidos Q3 FY25 Earnings Conference Call NOVEMBER 4, 2025 FORWARD-LOOKING STATEMENTS Certain statements in this release contain or are based on "forward- looking" information within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by words such as "expects," "intends," "plans," "anticipates," "believes," "estimates," "guidance" and similar words or phrases. Forward-looking statements in this release include, among others, estimate ...

Core Insights - Leidos Holdings, Inc. reported strong financial results for Q3 2025, with revenue growth of 7% year-over-year, reaching $4.47 billion, driven by increased customer demand in national security and defense sectors [3][9][24] - The company raised its fiscal year 2025 earnings and margin guidance, reflecting confidence in future performance despite challenges such as the government shutdown [2][10] - Net income for the quarter was $369 million, or $2.82 per diluted share, marking increases of 2% and 5% year-over-year, respectively [4][9] Financial Performance - Revenues for Q3 2025 were $4.47 billion, up from $4.19 billion in Q3 2024, with a year-over-year growth attributed to innovative products and solutions [3][9] - Net income was $369 million, with a net income margin of 8.3%, slightly down from 8.6% in the previous year [4][9] - Adjusted EBITDA was $616 million, reflecting a 3% increase year-over-year, with an adjusted EBITDA margin of 13.8%, down from 14.2% [5][9] Cash Flow and Dividends - Leidos generated $711 million in net cash from operating activities, with free cash flow of $680 million for the quarter [6][9] - The company declared a cash dividend of $0.43 per share, a 7.5% increase from the previous quarter [8] New Business Awards and Backlog - Net bookings totaled $5.9 billion in the quarter, resulting in a backlog of $47.7 billion, with a funded backlog increase of 27% sequentially [10][32] - Significant contract awards included a $2.2 billion contract in the intelligence community and a $760 million subcontract with NASA [15][10] Segment Performance - National Security & Digital revenues increased by 8% to $2.02 billion, driven by contract awards and increased volumes [24] - Health & Civil revenues rose by 6% to $1.30 billion, with an operating income margin improvement to 25.2% [25] - Defense Systems revenues grew by 11% to $582 million, although operating income margin decreased to 6.4% due to a higher mix of materials [27]

Financial Performance - Revenues for Q3 2025 were $4.47 billion, a 7% increase year-over-year, driven by increased customer demand for national security and defense solutions[6] - Net income for the quarter was $369 million, or $2.82 per diluted share, representing a 2% increase in net income and a 5% increase in diluted EPS year-over-year[6] - Adjusted EBITDA was $616 million, up 3% year-over-year, with an adjusted EBITDA margin of 13.8%, down from 14.2% in Q3 2024[7] - Revenues for the third quarter of 2025 were $4.469 billion, an increase of 6.7% compared to $4.190 billion in the same quarter of 2024[25] - Operating income for the third quarter of 2025 was $535 million, up from $516 million in the prior year, reflecting a margin of 12.0%[28] - Net income attributable to Leidos common stockholders for the third quarter of 2025 was $367 million, compared to $364 million in the same quarter of 2024[25] - The organic revenues for the three months ended October 3, 2025, increased by 6.0% year-over-year, totaling $4,443 million compared to $4,190 million in the prior year[45] - The total operating income for the three months ended October 3, 2025, was reported at $575 million, after accounting for acquisition and restructuring costs[46] - For the nine months ended October 3, 2025, Leidos reported an operating income of $1,636 million, which adjusted for acquisition, integration, and restructuring costs, resulted in a non-GAAP operating income of $1,745 million[50] Segment Performance - National Security & Digital segment revenues increased by 8% to $2.015 billion, driven by contract awards and increased volumes[29] - Health & Civil segment revenues rose by 6% to $1.301 billion, with an operating income margin of 25.2%, up from 23.4% in the prior year[30] - Defense Systems segment revenues increased by 11% to $582 million, with an operating income margin of 6.4%, down from 7.1% in the prior year[32] - The National Security & Digital segment reported revenues of $2,015 million for the three months ended October 3, 2025, reflecting an 8.0% increase from $1,865 million in the same period last year[45] - The Health & Civil segment's revenues increased by 6.2% to $1,301 million for the three months ended October 3, 2025, compared to $1,225 million in the prior year[45] - The Defense Systems segment reported a significant revenue increase of 11.5%, reaching $582 million for the three months ended October 3, 2025[45] Cash Flow and Dividends - Cash flows from operations were $711 million, with non-GAAP free cash flow of $680 million for the quarter[9] - The company declared a cash dividend of $0.43 per share, a 7.5% increase over the prior quarter's dividend[11] - The company declared cash dividends of $0.40 per share for the third quarter of 2025, up from $0.38 in the same quarter of 2024[25] - Cash and cash equivalents at the end of the third quarter of 2025 were $974 million, a decrease from $1.097 billion at the end of the prior quarter[27] Backlog and Contracts - Net bookings totaled $5.9 billion in the quarter, resulting in a backlog of $47.7 billion, a 5% increase year-over-year[13] - As of October 3, 2025, the total backlog for Leidos Holdings, Inc. is estimated at $47,656 million, comprising $9,064 million funded and $38,592 million unfunded[36] - The funded backlog for contracts with the U.S. government is valued at $3,203 million, while the unfunded backlog is $23,246 million[36] - Notable new contracts included a $2.2 billion award for classified mission support and a $760 million subcontract with NASA[13] Assets and Liabilities - Total assets as of October 3, 2025, were $13.542 billion, compared to $13.010 billion as of January 3, 2025[26] - Total liabilities as of October 3, 2025, were $8.588 billion, slightly up from $8.550 billion as of January 3, 2025[26] Non-GAAP Measures - The net income attributable to Leidos common stockholders for the same period was $1,121 million, increasing to $1,203 million after adjustments[50] - Diluted EPS attributable to Leidos common stockholders rose from $8.62 to $9.25 after accounting for non-GAAP adjustments[50] - Adjusted EBITDA for the nine months ended October 3, 2025, was $1,850 million, with an adjusted EBITDA margin of 14.3%[50] - The National Security & Digital segment reported a non-GAAP operating income of $201 million for the three months ended October 3, 2025, with a margin of 10.0%[52] - The Health & Civil segment achieved a non-GAAP operating income of $334 million for the same period, with a margin of 25.7%[52] - Total non-GAAP operating income for the nine months ended September 27, 2024, was $1,542 million, with an operating margin of 12.5%[53]

Core Insights - Leidos has entered into a definitive agreement to sell its wholly owned subsidiary, Varec, as part of its portfolio optimization efforts under the NorthStar 2030 strategy [1][2] - The transaction aims to enhance the missions of both Leidos and Varec while maximizing long-term value, reflecting a strategic focus on growth pillars [2] - The deal is expected to close in the fourth quarter of 2025, pending customary closing conditions [3] Company Overview - Leidos is a leader in the industry and technology sector, serving government and commercial customers with innovative digital and mission solutions [4] - The company is headquartered in Reston, Virginia, and employs approximately 47,000 people globally [4] - For the fiscal year ending January 3, 2025, Leidos reported annual revenues of approximately $16.7 billion [4]

Core Insights - VAST Data Federal has announced a strategic partnership with Leidos to create a scalable model for cyber defense, leveraging AI technologies to enhance security operations for U.S. public sector agencies [1][3] - The collaboration aims to address the overwhelming volume of security events generated by global enterprises and federal agencies, which currently amount to trillions, by utilizing advanced AI and data processing capabilities [2][6] Company Overview - VAST Data Federal is a subsidiary of VAST Data, focused on delivering AI Operating Systems to defense, intelligence, and civilian agencies in the U.S. public sector [5][7] - The VAST AI Operating System integrates foundational data and compute services, enabling agencies to deploy intelligent systems and automate complex workflows [5][8] Technology and Solutions - The partnership will utilize NVIDIA AI Enterprise software, NVIDIA Morpheus, and BlueField Data Processing Units (DPUs) to enhance real-time inspection and inference capabilities [2][4] - Key features of the solution include immediate visibility across hot and historical data, agentic triage and response, and accelerated data analytics for cyber investigations [6] Operational Benefits - The collaboration aims to reduce alert fatigue and improve response times by automating security processes and enabling policy-driven actions [2][3] - The solution is designed to lower operational costs by eliminating data storage constraints and allowing for the retention of more telemetry data [6]

Core Viewpoint - The market anticipates a year-over-year decline in Leidos' earnings despite an increase in revenues for the quarter ending September 2025, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - Leidos is expected to report earnings of $2.61 per share, reflecting a year-over-year decrease of 10.9%, while revenues are projected to be $4.27 billion, an increase of 1.8% from the previous year [3]. Estimate Revisions - The consensus EPS estimate has been revised 0.26% higher in the last 30 days, indicating a slight positive reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that the Most Accurate Estimate for Leidos is lower than the consensus estimate, resulting in an Earnings ESP of -2.30%, suggesting a bearish outlook from analysts [12]. Historical Performance - Leidos has consistently beaten consensus EPS estimates in the past four quarters, with a notable surprise of +22.05% in the last reported quarter [13][14]. Investment Considerations - Despite the historical performance, the current combination of a negative Earnings ESP and a Zacks Rank of 3 makes it challenging to predict an earnings beat for Leidos [12][17].

Core Insights - Leidos Holdings Inc. is recognized as one of the top defense stocks in Goldman Sachs' portfolio, benefiting from diversified revenue exposure across various end-markets and steady demand for systems solutions, IT, cyber, and logistics support from defense and civil agencies [1] Company Developments - On October 8, Leidos announced an expansion of its partnership with Kazaeronavigatsia to modernize Kazakhstan's air traffic control infrastructure, involving work at four control centers and 21 towers, positioning the company to benefit from projected growth in air traffic volume in Kazakhstan [2] - Truist Securities analyst Tobey Sommer raised the price target for Leidos to $195 from $188, maintaining a Buy rating ahead of the company's Q3 results scheduled for November 4 [3] Market Outlook - Analysts note potential near-term volatility for government services companies due to weaker book-to-bill ratios, a government shutdown, and delays in federal budget resolutions, but these factors may present buying opportunities for long-term investors [4] - Order growth and new contract awards are expected to increase in the first half of 2026, with stronger organic growth anticipated between late 2026 and early 2027, despite short-term political uncertainties [5] Company Profile - Leidos Holdings Inc. operates as a U.S. government technology and defense contractor, focusing on digital modernization, cybersecurity, logistics, and defense and mission systems for federal agencies, military, and intelligence clients [6]