Leidos (LDOS) Q4 2025 earnings summary

Executive summary

• FY2025 revenue reached $17.2B, up 3.1% YoY, with non-GAAP diluted EPS up 17% to $11.99 and free cash flow up 26% to $1.63B; Q4 book-to-bill ratio was 1.3.

• Major contract wins included a $2.2B Air Force radar contract, $455M Air Force cloud program, and positions on $151B SHIELD and $25B Microelectronics IDIQs.

• Strategic acquisitions (Kudu Dynamics, ENTRUST Solutions) and divestitures (Varec) realigned the business for growth in cyber and energy.

• Organization realigned into four reporting segments and leadership changes implemented to support growth strategy.

• Increased CapEx planned for 2026 to $350M to support production capacity and innovation.

Financial highlights

• FY2025 revenue: $17.2B, up 3.1% YoY; Q4 revenue: $4.2B, down 3.6% YoY due to calendar/shutdown effects.

• Adjusted EBITDA margin: 14.1% for the year (up 120 bps YoY), 13.2% in Q4 (up 160 bps YoY).

• Non-GAAP diluted EPS: $11.99 for the year (up 17% YoY), $2.76 in Q4.

• Free cash flow: $1.63B for the year (104% conversion), $452M in Q4 (127% of non-GAAP net income).

• Share repurchases totaled $944M for the year; dividends paid were $1.63 per share.

Outlook and guidance

• FY2026 revenue guidance: $17.5B–$17.9B (up to 4% growth); adjusted EBITDA margin expected in the mid-13% range.

• Non-GAAP diluted EPS guidance: $12.05–$12.45; operating cash flow expected at $1.75B.

• Revenue growth expected to accelerate in the second half of FY2026; guidance excludes impact of ENTRUST acquisition.

• CapEx to triple to $350M in 2026, impacting free cash flow.