Leidos Holdings Beats on Q2 Earnings, Raises '25 View

Leidos Holdings, Inc.’s (LDOS) second-quarter 2025 adjusted earnings of $3.21 per share beat the Zacks Consensus Estimate of $2.63 by 22.1%. The bottom line also improved 22.1% from $2.63 registered in the prior-year quarter.

LDOS reported GAAP earnings of $3.01 per share, implying an improvement from the prior-year quarter’s level of $2.37.

The year-over-year upside in the bottom line can be attributed to revenue growth and higher operating income than the prior-year level.

LDOS’ Total Revenues

Total revenues of $4.25 billion beat the Zacks Consensus Estimate of $4.23 billion by 0.5%. The top line also improved 2.9% year over year, driven by increased demand across all customer segments, especially Defense Systems, thanks to strong demand for innovative military products.

Leidos Holdings, Inc. Price, Consensus and EPS Surprise

Leidos Holdings, Inc. price-consensus-eps-surprise-chart | Leidos Holdings, Inc. Quote

LDOS’ Backlog

The company recorded a total backlog of $46.21 billion, down from $46.30 billion at the end of the first quarter of 2025. Of this amount, $7.12 billion was funded.

Operational Statistics of LDOS

The cost of revenues increased 1.3% year over year to $3.47 billion.

LDOS reported an adjusted operating income of $605 million compared with $524 million in the year-ago quarter.

The adjusted operating margin was 14.2% compared with 12.7% in the prior-year period.

Interest expenses totaled $55 million, which improved 7.8% from the year-ago figure.

Leidos’ Segmental Performance

National Security and Digital: Net revenues in this segment improved 3.3% year over year to $1.87 billion. The increase can be attributed to recent contract awards, increased volumes on the Sentinel program and a modest contribution from Kudu Dynamics.

Adjusted operating income improved to $195 million from the year-ago level of $188 million. Adjusted operating margin was 10.4%, which came in line with the prior-year figure.

Health & Civil: The segment recorded revenues of $1.27 billion, up 0.7% year over year.

Adjusted operating income totaled $317 million compared with $314 million in the year-ago quarter. The adjusted operating margin was 24.9%, which remained flat year over year.

Commercial & International: Revenues in this segment amounted to $566 million, up 0.9% year over year. The upside was driven by continued demand for security product solutions and strong performance on certain programs in the United Kingdom.

This segment recorded an adjusted operating income of $48 million compared with $4 million in the year-ago quarter. The adjusted operating margin was 8.5%, up 780 basis points (bps) year over year.

Defense Systems: Revenues in this segment amounted to $543 million, up 9.7% year over year. The upside was driven by increased volumes in space sensing and integrated air defense, including the Indirect Fires Protection Capability Increment 2 system.

This segment recorded an adjusted operating income of $53 million compared with $51 million in the year-ago period. The adjusted operating margin was 9.8%, down 50 bps year over year.

LDOS’ Financials

Cash and cash equivalents totaled $930 million as of July 4, 2025, compared with $849 million as of Jan. 3, 2025.

As of July 4, 2025, the long-term debt, net of the current portion, amounted to $4.99 billion compared with $4.05 billion as of Jan. 3, 2025.

Net cash flow from operating activities totaled $544 million at the end of the second quarter of 2025 compared with $494 million recorded a year ago.

LDOS’ 2025 Guidance

Leidos Holdings has raised its 2025 guidance. It currently expects to generate adjusted earnings in the range of $11.15-$11.45 per share, higher than its earlier projection of $10.35-$10.75. The Zacks Consensus Estimate for earnings is pegged at $10.81 per share, which lies below the company’s new guidance.

LDOS now expects 2025 revenues to be in the band of $17.00-$17.25 billion compared with the prior guidance of $16.90-$17.30 billion. The Zacks Consensus Estimate for revenues is pegged at $17.14 billion, just above the midpoint of the company’s newly guided range.

It currently expects to generate cash flow from operating activities of approximately $1.65 billion compared with its prior guidance of $1.45 billion.

LDOS’ Zacks Rank

Leidos Holdings currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Defense Releases

The Boeing Company (BA) incurred an adjusted loss of $1.24 per share in the second quarter of 2025, narrower than the Zacks Consensus Estimate of a loss of $1.54. The bottom line improved from the year-ago quarter’s reported loss of $2.90 per share.

Revenues amounted to $22.75 billion, which outpaced the Zacks Consensus Estimate of $21.86 billion by 4.1%. The top line also surged 34.9% from the year-ago quarter’s reported figure of $16.87 billion.

RTX Corporation’s (RTX) second-quarter 2025 adjusted earnings per share of $1.56 beat the Zacks Consensus Estimate of $1.45 by 7.6%. The bottom line also improved 10.6% from the year-ago quarter’s level of $1.41.

RTX’s second-quarter sales totaled $21.58 billion, which surpassed the Zacks Consensus Estimate of $20.53 billion by 5.1%. The top line also surged a solid 9.4% from $19.72 billion recorded for the second quarter of 2024.

Lockheed Martin Corporation (LMT) reported second-quarter 2025 adjusted earnings of $7.29 per share, which beat the Zacks Consensus Estimate of $6.49 by 12.3%. The bottom line increased 2.5% from the year-ago quarter's reported figure of $7.11.

Net sales were $18.16 billion, which missed the Zacks Consensus Estimate of $18.56 billion by 2.2%. The top line, however, inched up 0.2% from $18.12 billion reported in the year-ago quarter.

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