Leidos (LDOS) Q2 2025 earnings summary

Executive summary

• Achieved Q2 revenue of $4.25 billion, up 2.9–3% year-over-year, with net income rising 21–21.4% to $391–$393 million and diluted EPS up 22–27% to $3.01–$3.21.

• Adjusted EBITDA reached $647 million, up 16% year-over-year, with a record 15.2% margin.

• Operating cash flow for the quarter was $486 million, with free cash flow at $457 million and conversion rates of 110–124%.

• Completed Kudu Dynamics acquisition for $291 million, adding AI-enabled cyber capabilities and $149 million in backlog.

• Raised full-year 2025 guidance across all metrics, reflecting confidence in market opportunities and execution of strategic initiatives.

Financial highlights

• Q2 revenues reached $4.25–$4.253 billion, up 2.9–3% year-over-year.

• Adjusted EBITDA was $647 million, margin at 15.2%, up 170 bps year-over-year.

• Non-GAAP diluted EPS grew 22–22.1% to $3.21; net income for Q2 was $391–$393 million.

• Operating cash flow for the quarter was $486 million; free cash flow was $457 million.

• Cash and cash equivalents at quarter-end were $930 million; total debt was $5.1 billion.

Outlook and guidance

• Full-year 2025 revenue guidance raised to $17.00–$17.25 billion.

• Adjusted EBITDA margin guidance increased to mid-13% range.

• Non-GAAP diluted EPS guidance raised to $11.15–$11.45.

• Operating cash flow guidance increased to approximately $1.65 billion.

• New U.S. tax legislation (OBBBA) expected to reduce 2025 tax payments by $150 million.