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]

Core Insights - Leidos reported $4.25 billion in revenue for Q2 2025, a year-over-year increase of 2.9%, with an EPS of $3.21 compared to $2.63 a year ago, resulting in a surprise of +0.52% over the Zacks Consensus Estimate [1] - The EPS surprise was +22.05% compared to the consensus estimate of $2.63 [1] Revenue Breakdown - Health & Civil revenues were $1.27 billion, slightly below the average estimate of $1.28 billion, reflecting a year-over-year change of +0.7% [4] - National Security and Digital revenues reached $1.87 billion, exceeding the average estimate of $1.86 billion, with a year-over-year increase of +3.3% [4] - Commercial & International revenues were $566 million, below the average estimate of $584.26 million, showing a year-over-year change of +0.9% [4] - Defense Systems revenues amounted to $543 million, surpassing the average estimate of $514.06 million, with a year-over-year increase of +9.7% [4] Operating Income Analysis - Defense Systems operating income was $41 million, exceeding the average estimate of $33.31 million [4] - Non-GAAP operating income for Defense Systems was $53 million, compared to the average estimate of $45.61 million [4] - National Security & Digital operating income was $188 million, closely matching the average estimate of $188.13 million [4] - Non-GAAP operating income for Health & Civil was $317 million, significantly above the average estimate of $270.25 million [4] - Non-GAAP operating income for National Security and Digital was $195 million, exceeding the average estimate of $185.47 million [4] - Non-GAAP operating income for Commercial & International was $48 million, slightly above the average estimate of $47.82 million [4] - Health & Civil operating income was $311 million, above the average estimate of $289.99 million [4] - Commercial & International operating income was $40 million, exceeding the average estimate of $34.83 million [4] Stock Performance - Leidos shares have returned -2.1% over the past month, while the Zacks S&P 500 composite has changed by +1% [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential outperformance in the near term [3]