Leidos Posts 10% Growth in Q4 2024 Revenue, $43.6B in Total Backlog

Leidos reported $4.4 billion in fiscal year 2024 fourth-quarter revenue, up 10 percent from the prior-year period, and saw its full-year revenue rise 8 percent year-over-year to $16.7 billion, driven by robust demand across all customer segments, particularly for managed health services. 

In an earnings release published Tuesday, the defense and IT services contractor said its net bookings totaled $7.6 billion in the last quarter and $23.4 billion for the entire year, reflecting book-to-bill ratios of 1.7 and 1.4, respectively.

At the end of FY 2024, the Reston, Virginia-based company reported a total backlog of $43.6 billion, with $8.4 billion of that funded.

Leidos recorded $282 million in Q4 net income and diluted earnings per share of $2.12. Net income for the year was $1.25 billion and diluted EPS for the year was $9.22, reflecting a 540 percent increase from the previous year.

Adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, for the quarter was $508 million, up 12 percent from the same quarter of 2023.

Cash flows from operations reached $299 million for the quarter and $1.4 billion for the year.

Quarterly & Full-Year Results of 4 Business Segments

The national security and digital business of Leidos reported $1.89 billion in fourth-quarter revenues and $7.37 billion in full-year revenues, up 5 percent and 2 percent, respectively, from the prior-year period. The company attributed the rise in revenue to higher volumes on digital modernization initiatives and increased activity on the Sentinel contract.

The company’s health and civil business segment posted 1.33 billion and $5.02 billion in quarterly and full-year revenues, respectively. The segment’s quarterly revenues rose 16 percent and full-year revenues climbed 18 percent due to increased volumes within the managed health services business and net write-ups on certain initiatives.

The defense systems segment recorded $539 million in Q4 revenues, reflecting a 7 percent increase from the prior-year period. Full-year revenues also increased 8 percent to $2.03 billion. The company associated the growth with increased scope and new business awards.

Leidos logged $604 million in Q4 revenues and $2.25 billion in full-year revenues for its commercial and international business, up 12 percent and 6 percent, respectively, from the same period the previous year. The segment’s revenue growth was driven by increased deliveries of security products and higher volumes within commercial energy, airborne solutions and Australian IT businesses.

CEO on NorthStar 2030, Government’s 3 Focus Areas

At an earnings call Tuesday, Leidos CEO Thomas Bell mentioned the company’s new growth strategy, called NorthStar 2030. He said the contractor plans to fully unveil the new strategy, which was developed in 2024, at its upcoming Investors Day.

According to Bell, the new strategy “keys on a specific group of growth pillars, where we know customer needs are growing, market profitability is robust and Leidos differentiation is evident and accelerating.”

The 2025 Wash100 awardee told analysts that the new administration and the Department of Government Efficiency have started introducing an agenda to transform government operations. He cited IT modernization, transformational warfighting capability and increased privatization as the U.S. government’s focus areas that “are right in our wheelhouse.”

Bell cited several examples of Leidos’ efforts in those areas. For IT modernization, he talked about the disability case processing system that the company developed for the Social Security Administration.

He said the system has improved the disability claim processing time by more than 90 percent, increased the accuracy of benefit calculations by 20 percent and reduced backlog by over 50 percent.

When it comes to critical warfighting capabilities, Bell said Leidos “developed an unmanned undersea multi-mission vessel in less than 18 months” and designed and deployed Archer, a small unmanned surface vehicle equipped with a modular mission bay, in less than nine months.

For the third focus area, the chief executive noted that Leidos partnered with the Department of Veterans Affairs to transform the delivery of healthcare to the country’s military retirees. He said the move has resulted in the establishment of “the largest, most flexible network of first-class medical and mobile clinics,” enabling the company to improve veteran throughput by over 300 percent and reduce by half the average exam timeline.

“And we’ve delivered all this efficiency while consistently exceeding VA targets for both timeliness and critically quality of care,” Bell added.

FY 2025 Guidance

For its fiscal 2025 guidance, Leidos said it expects to record revenues of $16.9 billion to $17.3 billion with adjusted EBITDA margin in the mid-to-high 12 percent range.

The contractor anticipates recording $10.35 to $10.75 in non-GAAP diluted earnings per share and expects operating cash flows of approximately $1.45 billion.