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Leidos Reports Robust Q2 Earnings and Raises Full-Year Guidance

Leidos Holdings, Inc. (NYSE: LDOS) released its financial results for the second quarter of fiscal year 2025, showcasing impressive growth and the company's responsiveness to evolving market demands. This quarter's figures reveal a revenue of $4.25 billion, reflecting a 3% organic increase year-over-year, a notable surge attributed to heightened demand across various customer segments, particularly within its Defense Systems division.

Strong Financial Performance

The financial snapshot for the second quarter includes:

• - Net income: $393 million, which translates to $3.01 per diluted share, a significant increase from the previous year's $324 million or $2.37 per diluted share.
• - The net income margin rose to 9.2%, a jump from 7.8% in Q2 2024.
• - Adjusted EBITDA reached $647 million, marking a 16% increase year-on-year and an adjusted EBITDA margin of 15.2%.

CEO Tom Bell highlighted that these impressive results not only underscore the company's robust portfolio but also reflect the alignment of their NorthStar 2030 strategy with upcoming Administration priorities. With double-digit earnings per share growth and efficient cash flow generation, Leidos is on a strong path to enhance shareholder value.

Cash Flow Dynamics

In the second quarter, Leidos generated $486 million from operations, with a free cash flow of $457 million. Significant investing activities included the acquisition of Kudu Dynamics for $291 million, signaling a strategic move to expand AI-enabled cybersecurity capabilities for defense and homeland security clients.

As of July 4, 2025, the company held $930 million in cash and equivalents against $5.1 billion of debt, reaffirming a solid financial standing amid ongoing commitments. The Board also declared a quarterly cash dividend of $0.40 per share, payable on September 30, 2025.

New Business Contracts

Leidos has secured $3.9 billion in new bookings this quarter, leading to a total backlog of $46.2 billion. Significant awards include:

• - A $1.3 billion contract for the Intelligence Community and a $390 million recompete.
• - A $350 million contract to support electronic warfare for the U.S. Air Force.
• - A $128 million task order from the FBI for biometric services.
• - An $87 million IT modernization contract for NATO, focusing on enhancing cybersecurity and operational efficiency.

Updated Financial Guidance

Given the strong performance in the first half of the year and clearer macroeconomic signals, Leidos has upgraded its fiscal year 2025 guidance. Revised estimates project revenues between $17.00 billion and $17.25 billion, an adjusted EBITDA margin in the mid-13% range, and a non-GAAP diluted EPS forecast of $11.15 to $11.45.

Conclusion

As a leader in technology and innovation, Leidos continues to position itself effectively in the government and commercial sectors. Their latest financial results reaffirm a commitment to delivering value while adapting to the complex dynamics of global defense and security requirements. The company's focus on strategic acquisitions, active capital deployment, and sustained growth initiatives are likely to drive long-term success and shareholder returns in the coming years.