Leidos (LDOS) Q4 2025 earnings summary

Executive summary

• FY2025 revenues reached $17.2B, up 3.1% YoY, with non-GAAP EPS up 17% to $11.99 and free cash flow up 26% to $1.63B; Q4 book-to-bill ratio was 1.3, and strategic execution included major contract wins and organizational realignment.

• Investments increased in growth pillars, including CapEx for 2026, and strategic acquisitions such as Kudu Dynamics and the pending $2.4B Entrust deal.

• Organizational transformation included new leadership roles, a CTO, and an Enterprise Transformation Office to support the NorthStar 2030 strategy.

Financial highlights

• FY2025 revenue: $17.2B, up 3.1% YoY; Q4 revenue: $4.2B, down 3.6% YoY (impacted by shutdown and calendar effects).

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

• Non-GAAP diluted EPS: $11.99 for FY2025 (up 17% YoY); Q4 non-GAAP EPS: $2.76 (up 16%).

• Free cash flow: $1.63B for the year (104% conversion); operating cash flow: $1.75B for FY2025.

• Share repurchases: $944M for the year; dividends paid: $1.63 per share; year-end cash: $1.1B; debt: $4.6B.

Outlook and guidance

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

• Non-GAAP diluted EPS guidance: $12.05–$12.45; assumes $200M interest expense, 24% tax rate, 129M average shares.

• Operating cash flow guidance: $1.75B; free cash flow to decrease slightly due to CapEx rising to $350M.

• Guidance excludes impact from Entrust acquisition, to be updated post-close.