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Leidos Holdings, Inc.’s LDOS first-quarter 2025 adjusted earnings of $2.97 per share beat the Zacks Consensus Estimate of $2.47 by 20.2%. The bottom line also increased 29.7% from $2.29 registered in the prior-year quarter. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
LDOS reported GAAP earnings of $2.77 per share, implying an improvement from the prior-year quarter’s level of $2.07.
The year-over-year upside in the bottom line can be attributed to revenue growth and improved profitability when compared with the first quarter of 2024.
LDOS’ Total Revenues
Total revenues of $4.25 billion beat the Zacks Consensus Estimate of $4.08 billion by 4%. The top line also improved 6.8% year over year, driven by increased demand across all customer segments.
Leidos Holdings, Inc. Price, Consensus and EPS Surprise
Leidos Holdings, Inc. price-consensus-eps-surprise-chart | Leidos Holdings, Inc. Quote
LDOS’ Backlog
The company recorded a total backlog of $46.30 billion, up from $43.56 billion at the end of the fourth quarter of 2024. Of this amount, $7.33 billion was funded.
Operational Statistics of LDOS
The cost of revenues increased 4.5% year over year to $3.49 billion.
LDOS reported an adjusted operating income of $565 million compared with $456 million in the year-ago quarter.
The adjusted operating margin was 13.3% compared with 11.5% in the prior-year period.
Interest expenses totaled $49 million, which came in line with the year-ago figure.
Leidos’ Segmental Performance
National Security and Digital: Net revenues in this segment improved 4.7% year over year to $1.88 billion. The increase can be attributed to contract wins and increased volumes on Sentinel and certain Information Technology and Intelligence programs.
This segment’s adjusted operating income declined to $190 million from the year-ago level of $181 million. The segment’s adjusted operating margin was 10.1%, which came in line with the prior-year figure.
Health & Civil: The segment recorded revenues of $1.29 billion, up 7.7% year over year. This improvement can be attributed to increased volumes and case complexity within the managed health services business, as well as net write-ups on certain programs.
This unit’s adjusted operating income totaled $305 million compared with $228 million in the year-ago quarter. The segment’s adjusted operating margin was 23.6%, up 460 basis points (bps) year over year.
Commercial & International: Revenues in this segment amounted to $568 million, up 11.6% year over year. The upside was driven by increased deliveries of security products and higher volumes from certain programs in the United Kingdom.
This segment recorded an adjusted operating income of $48 million compared with $42 million in the year-ago quarter. The adjusted operating margin was 8.5%, up 20 bps year over year.
Defense Systems: Revenues in this segment amounted to $508 million, up 7.2% year over year. The upside was driven by increased volumes in space sensing and hypersonics programs.
This segment recorded an adjusted operating income of $46 million compared with $38 million in the year-ago period. The adjusted operating margin was 9.1%, up 110 bps year over year.