Leidos(US:LDOS)2025-11-04 16:11Financial Performance - Revenues for the three months ended October 3, 2025, were $4,469 million, a 6.7% increase from $4,190 million for the same period in 2024[8] - Operating income for the three months ended October 3, 2025, was $535 million, compared to $516 million for the same period in 2024, reflecting a 3.7% increase[8] - Net income attributable to Leidos common stockholders for the three months ended October 3, 2025, was $367 million, up from $364 million in the same period of 2024, representing a 0.8% increase[8] - Earnings per share (EPS) for the three months ended October 3, 2025, were $2.87 (basic) and $2.82 (diluted), compared to $2.72 and $2.68, respectively, for the same period in 2024[8] - Total revenue for the three months ended October 3, 2025, was $4.449 billion, compared to $4.169 billion for the three months ended September 27, 2024, reflecting an increase of 6.7%[41] - Total revenues for the three months ended October 3, 2025, were $4,469 million, an increase from $4,190 million in the same period last year, representing a growth of 6.7%[81] - For the nine months ended October 3, 2025, total revenues reached $12,967 million, up from $12,297 million in the prior year, marking a year-over-year increase of 5.4%[82] - Total revenue for the nine months ended October 3, 2025, was $12,910 million, an increase from $12,227 million for the same period in 2024, representing a growth of 5.6%[43] Expenses and Costs - The company reported a total cost of revenues of $3,648 million for the three months ended October 3, 2025, compared to $3,428 million for the same period in 2024, indicating a 6.4% increase[8] - Selling, general and administrative expenses for the three months ended October 3, 2025, were $286 million, an increase of 15.8% from $247 million in the same period of 2024[8] - The company incurred acquisition, integration, and restructuring costs of $4 million for the three months ended October 3, 2025, compared to $3 million in the same period of 2024[8] - Interest expense for the three months ended October 3, 2025, was $51 million, compared to $46 million for the same period in 2024, reflecting an increase of 10.9%[8] - Direct labor costs for the three months ended October 3, 2025, amounted to $968 million, compared to $921 million for the same period last year, reflecting an increase of 5.1%[81] - The Corporate expense for the three months ended October 3, 2025, was $59 million, compared to $36 million in the same period last year, indicating a significant rise of 63.9%[82] Income and Cash Flow - Net income for the nine months ended October 3, 2025, was $1,127 million, an increase from $969 million for the same period in 2024, representing a growth of approximately 16.3%[16] - Cash flows from operating activities provided $1,255 million, compared to $1,141 million in the prior year, indicating an increase of about 10%[16] - The company reported a net increase in cash, cash equivalents, and restricted cash of $106 million for the nine months ended October 3, 2025[16] Assets and Liabilities - Total cash and cash equivalents at the end of the period was $974 million, down from $1,097 million at the end of September 27, 2024[16] - Contract assets increased to $949 million as of October 3, 2025, compared to $842 million at the beginning of the year, primarily due to revenue recognized on certain contracts[47] - Contract liabilities increased to $396 million as of October 3, 2025, from $333 million at January 3, 2025, mainly due to advanced payments from customers[47] - The company reported restricted cash balances of $123 million as of October 3, 2025[38] - The balance of stockholders' equity at September 27, 2024, was $4,667 million, reflecting a decrease from $4,710 million at the end of the previous fiscal year[16] Investments and Acquisitions - The company utilized $292 million for the acquisition of a business, net of cash acquired, during the nine months ended October 3, 2025[16] - The acquisition of Kudu Dynamics was completed for a total consideration of $293 million, with $26 million and $38 million of revenues recognized from this acquisition in the three and nine months ended October 3, 2025, respectively[49][50] Tax and Compliance - The effective tax rate for the three months ended October 3, 2025, was 23.8%, an increase from 23.0% for the same period in 2024[78] - The company was in compliance with all financial covenants as of October 3, 2025, maintaining a ratio of adjusted consolidated total debt to consolidated EBITDA of not more than 3.75 to 1.00[71] - The company is currently cooperating with investigations by the Department of Justice and the SEC regarding international operations, which may have potential implications for its financial position[89] Future Outlook - As of October 3, 2025, the company had $17 billion of remaining performance obligations (RPO), expecting to recognize approximately 64% over the next 12 months and 82% over the next 24 months[40] - Estimated annual amortization expense for fiscal year 2026 is projected to be $111 million[55] Other - The company completed the divestiture of an immaterial business on October 31, 2025, which was not aligned with its long-term strategy[93] - Active indirect cost audits by the Defense Contract Audit Agency remain open for fiscal 2023 and subsequent years, which may impact future profitability[88]