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ESTON, Va. - Leidos Holdings, Inc. (NYSE:LDOS) reported strong third-quarter results that exceeded analyst expectations, with the defense and IT services provider raising its full-year earnings guidance despite ongoing government shutdown concerns.
The company’s shares rose 1.82% in pre-market trading following the announcement.
The company posted adjusted earnings of $3.05 per share, significantly beating the analyst consensus of $2.71. Revenue reached a record $4.5 billion, up 7% YoY and ahead of the $4.28 billion consensus estimate. Organic revenue growth was 6%.
"Leidos continues to deliver exceptional results through the strength of our portfolio of mission-critical work as well as the innovation, agility, and discipline of our talented workforce," said Leidos Chief Executive Officer Tom Bell. "Despite the government shutdown, we are raising our 2025 earnings and margin guidance and holding firm on our 2025 revenue and cash guidance."
The company’s net income for the quarter was $369 million, up 2% YoY, while net income margin decreased slightly to 8.3% from 8.6% in the same period last year. Adjusted EBITDA increased 3% to $616 million, with a margin of 13.8%.
Leidos secured $5.9 billion in new bookings during the quarter, representing a book-to-bill ratio of 1.3. Total backlog reached $47.7 billion, up 5% YoY, with funded backlog increasing 27% sequentially to $9.1 billion.
For fiscal year 2025, Leidos raised its earnings guidance to $11.45-$11.75 per share from the previous $11.15-$11.45, while maintaining its revenue forecast of $17.00-$17.25 billion. The company also increased its adjusted EBITDA margin guidance to "high 13%" from "mid 13%."
Notable contract wins included a $2.2 billion seven-year intelligence community contract, a $760 million NASA subcontract for astronaut health services, and a $540 million seven-year contract for counter-terrorism software support.
The company generated $711 million in operating cash flow and $680 million in free cash flow during the quarter, while returning $153 million to shareholders through share repurchases and dividends.
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