Q4 2025 Leidos Holdings Inc Earnings Call Transcript
Key Points
- Leidos Holdings Inc (LDOS) recorded 2025 revenue toward the top of their guidance, with earnings and cash ending the year above expectations.
- The company achieved a 17% growth in non-GAAP diluted earnings per share and a 26% increase in free cash flow.
- Net bookings for the fourth quarter were $5.6 billion, resulting in a book-to-bill ratio of 1.3 times, matching the previous quarter.
- Leidos Holdings Inc (LDOS) secured significant contracts, including a $2.2 billion contract with the Air Force for passive radar systems and a $455 million Air Force Cloud One program.
- The company is actively investing in growth pillars, with plans to triple capital expenditure investments to $350 million in 2026 to expand production capacity and upgrade facilities.
- Q4 revenue decreased by 3.6% year-over-year, impacted by an extra week in Q4 2024 and a six-week government shutdown in 2025.
- The managed health services business faced moderate headwinds in the quarter, affecting overall performance.
- The company anticipates modestly lower revenue and margin in the Health segment due to additional vendor competition and transitions in key programs.
- Leidos Holdings Inc (LDOS) faces potential challenges in maintaining profitability in recompete contracts, such as the VA medical exam recompete.
- The guidance for 2026 includes a mid-13s adjusted EBITDA margin, normalizing some of the one-time benefits from 2025, indicating potential pressure on margins.
Greetings. Welcome to Leidos fourth-quarter fiscal year 2025 earnings call. (Operator Instructions) Please be advised that today's conference is being recorded.
I would now like to hand the conference over to your first speaker, Stuart Davis from Investor Relations. Stuart, you may begin.
Thank you, operator, and good morning, everyone. I'd like to welcome you to our fourth quarter and fiscal year 2025 earnings conference call. Joining me today are Tom Bell, our CEO; and Chris Cage, our CFO. Today's call is being webcast on the Investor Relations portion of our website where you'll also find the earnings release and supplemental financial presentation slides that we're using today.
Turning to slide 2 of the presentation. Today's discussion contains forward-looking statements based on the environment as we currently see it and as such, does include risks and uncertainties. Please refer to our press release for more information on the specific risk factors that could cause actual results to
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