Leidos and Sky Solutions form joint venture to modernize federal health

RESTON, Va. - Leidos (NYSE:LDOS), a prominent $24 billion market cap professional services company with annual revenues of approximately $17 billion, and Sky Solutions have established a new joint venture called Purple Sky, LLC, focused on helping federal health agencies improve service delivery through digital transformation, according to a press release statement issued Wednesday.

The newly formed entity will concentrate on delivering advanced digital services to federal agencies, with emphasis on technology upgrades, data access improvements, and strengthened mission outcomes in health, human services, and benefits delivery sectors. According to InvestingPro data, Leidos has demonstrated strong financial execution with over $1.4 billion in net income over the last twelve months, positioning it well for this expansion.

Purple Sky will combine Leidos’ experience in deploying large-scale technology solutions with Sky Solutions’ expertise in low-code/no-code platform development. The joint venture will leverage both companies’ capabilities in cloud computing, artificial intelligence, and cybersecurity.

"Our goal is to help government agencies modernize with confidence by combining innovation with the security, scale and reliability the federal mission demands," said Milad Bahrami, senior vice president of Health Solutions at Leidos.

Anil Boinapalli, CEO of Sky Solutions, stated that the partnership aims to solve real-world problems for federal agencies and the communities they serve.

Federal agencies can access Purple Sky’s solutions through the General Services Administration multiple award schedule, facilitating implementation of modern technologies including AI, cloud systems, and automated processes.

The joint venture operates under the Small Business Administration’s Mentor-Protégé program, with Purple Sky designated as a certified SBA 8(a) small business.

Leidos, headquartered in Reston, Virginia, reported annual revenues of approximately $16.7 billion for the fiscal year ended January 3, 2025, and employs 47,000 people globally. The company’s stock has shown impressive momentum with a 38% return over the past six months, and InvestingPro analysis suggests the stock is currently trading slightly below its Fair Value. For deeper insights into Leidos’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

In other recent news, Leidos has reported several noteworthy developments. The company secured a $105.5 million contract with the U.S. Department of Defense to provide research support services for the Naval Health Research Center. This contract involves various investigative studies, highlighting Leidos’ ongoing role in defense research. UBS has raised its price target for Leidos to $184 from $168, maintaining a Neutral rating, driven by strong margin performance and a positive outlook on revenue visibility for the second half of the year. Additionally, Leidos introduced the Sea Dagger, a new Commando Insertion Craft concept for the Royal Navy, as part of the UK Commando Force program. The craft is designed for high-speed operations and modular mission capabilities.

Moreover, Leidos has formed a strategic partnership with Second Front Systems to enhance the software delivery process for federal agencies. This partnership will focus on operating the Game Warden platform, which is intended to streamline secure software deployment. Despite these positive developments, UBS noted a significant decline in Leidos’ second-quarter funded Health & Civil backlog, but the firm remains optimistic about the company’s future. These updates reflect Leidos’ strategic initiatives and its adaptability in a dynamic market environment.

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