Leidos Reports Strong Q4 & FY2025 Results, Issues Positive FY2026 Guidance, and Details New Segment Structure

summarizeSummary

Leidos announced strong Q4 and full-year 2025 financial results with significant earnings and cash flow growth, issued positive FY2026 guidance, and implemented a new four-segment reporting structure.

check_boxKey Events

• Strong Q4 and FY2025 Financial Performance

  Leidos reported Q4 2025 diluted EPS of $2.53 (up 19% YoY) and non-GAAP diluted EPS of $2.76 (up 16% YoY). For the full year 2025, diluted EPS was $11.14 (up 21% YoY) and non-GAAP diluted EPS was $11.99 (up 17% YoY). Cash flows from operations were $495 million for Q4, marking the highest Q4 performance in company history.

• Positive FY2026 Financial Guidance

  The company initiated fiscal year 2026 guidance, projecting revenues between $17.5 billion and $17.9 billion, a mid-13% Adjusted EBITDA Margin, non-GAAP diluted EPS of $12.05 to $12.45, and approximately $1.75 billion in cash flows from operating activities.

• Significant New Business Awards and Backlog

  Net bookings totaled $5.6 billion in Q4 2025, resulting in a book-to-bill ratio of 1.3 for the quarter. For the full year, net bookings were $17.5 billion, with a book-to-bill ratio of 1.0. Total backlog at year-end was $49.0 billion, including $9.7 billion in funded backlog.

• Implementation of New Operating and Reporting Structure

  Effective January 3, 2026, Leidos implemented a new operating and reporting structure, reorganizing into four reportable segments: Intelligence & Digital, Health, Homeland, and Defense. Recast unaudited financial information for these new segments was provided.

auto_awesomeAnalysis

Leidos Holdings, Inc. reported robust financial results for the fourth quarter and full fiscal year 2025, demonstrating strong profitability and cash generation despite a slight revenue decline in Q4 attributed to an extra work week in the prior year and a government shutdown. The company's diluted EPS and non-GAAP diluted EPS saw double-digit growth for both the quarter and the full year. Management provided optimistic guidance for fiscal year 2026, forecasting continued growth in revenues and non-GAAP diluted EPS, alongside strong operating cash flows. Additionally, Leidos detailed a new four-segment operating and reporting structure, which will provide greater clarity on its diverse business lines. The filing also reiterated the previously announced $2.4 billion acquisition of ENTRUST Solutions Group, expected to close in the first half of fiscal 2026, which will broaden its utility client base.