Leidos reported $4.25 billion in fiscal year 2025 second-quarter revenue, up 3 percent from the prior-year period, and attributed the revenue growth to increased demand across all customer segments, particularly in defense systems due to strong demand for military technologies.
In an earnings release published Tuesday, the defense and IT services contractor said its Q2 net income was $393 million and its non-GAAP diluted earnings per share for the quarter was $3.21, reflecting a 22 percent year-over-year growth.
Leidos ended the quarter with a total backlog of $46.2 billion, with $7.1 billion of that funded. Net bookings totaled $3.9 billion during the quarter.
“Our second quarter results showcase the strength of our differentiated portfolio and the alignment of our NorthStar 2030 strategy with the priorities of the new Administration,” Leidos CEO Thomas Bell said in a statement. “With record margins, continued double-digit EPS growth, and strong cash conversion, we are delivering on our financial commitments, and we are strategically deploying capital to grow shareholder value.”
Leidos CEO on Kudu Dynamics Acquisition, NorthStar 2030 Strategy
At an earnings call Tuesday, Bell, a two-time Wash100 awardee, mentioned the company’s acquisition of Kudu Dynamics.
In May, Leidos acquired Kudu Dynamics in an all-cash transaction worth approximately $300 million as part of a push to rapidly scale artificial intelligence-enabled cyber capabilities for intelligence, defense and homeland security clients.
The chief executive told analysts that with the integration of Kudu into the business, Leidos has added about $400 million in pipeline opportunities.
“And we are convinced that with the combined Leidos-Kudu capabilities, we’ve now driven up probability of winning on another $2 billion of near term submits,” Bell noted.
“As we execute our NorthStar 2030 strategy, we will continue to be on the lookout for constructive acquisitions that support our growth pillars and offer a compelling return on capital. And at the same time, our confidence in future cash flows enables us to remain multifaceted in our capital deployment philosophy,” he added.
At the previous quarterly earnings call, the 2025 Wash100 Award recipient discussed the NorthStar 2030 strategy and its five pillars: space and maritime; energy infrastructure; digital modernization and cyber; highly customized critical mission software; and managed health services.
“Our determined ongoing engagement with customers continues to validate these NorthStar 2030 growth pillars. In fact, the significant multiyear funds provided by the One Big Beautiful bill speak directly to our NorthStar 2030 growth pillars and our core Leidos capabilities,” Bell told investors.
Q2 Fiscal Year 2025 Results of 4 Leidos Business Segments
Leidos’ national security and digital business recorded $1.87 billion in second-quarter revenues, up 3 percent from the year-ago quarter. The company attributed the revenue growth to recent contract awards, increased volumes on Sentinel and contributions from Kudu Dynamics.
The health and civil business segment’s Q2 revenues climbed 1 percent to $1.27 billion, driven by continued high volumes within the managed health services business. Health and civil operating income margin for the second quarter was 24.4 percent.
The company’s defense systems business saw its revenues rise 10 percent to $543 million, attributing the revenue growth to increased volumes in integrated air defense and space sensing programs.
The commercial and international business of Leidos posted $566 million in Q2 revenues, up 1 percent from the prior-year period. The company associated the growth with continued demand for security products and strong performance on certain programs in the U.K. The segment’s operating income margin was 7.1 percent during the quarter.
