Leidos Holdings Beats Q3 Earnings Estimates, Raises '25 View

Leidos Holdings, Inc.’s LDOS third-quarter 2025 adjusted earnings of $3.05 per share beat the Zacks Consensus Estimate of $2.61 by 16.9%. The bottom line also improved 4.1% from $2.93 registered in the prior-year quarter.

LDOS reported GAAP earnings of $2.82 per share, implying an improvement from the prior-year quarter’s level of $2.68.

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 $4.47 billion beat the Zacks Consensus Estimate of $4.27 billion by 4.8%. The top line also improved 6.7% 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 $47.66 billion, up from $45.51 billion at the end of the first quarter of 2025. Of this amount, $9.06 billion was funded.

Operational Statistics of LDOS

The cost of revenues increased 6.4% year over year to $3.65 billion.

LDOS reported an adjusted operating income of $535 million compared with $516 million in the year-ago quarter.

Interest expenses totaled $51 million, which increased from the year-ago figure of $46 million.

Leidos’ Segmental Performance

National Security and Digital: Net revenues in this segment improved 8% year over year to $2.02 billion. The increase can be attributed to recent contract awards, increased volumes on the Defense IT and Intelligence Community mission support program and a modest contribution from Kudu Dynamics.

Adjusted operating income improved to $191 million from the year-ago level of $187 million. Adjusted operating margin was 10%, which decreased from the prior-year figure.

Health & Civil: The segment recorded revenues of $1.30 billion, up 6.2% year over year.

Adjusted operating income totaled $328 million compared with $287 million in the year-ago quarter. The adjusted operating margin was 25.7%, which increased year over year.

Commercial & International: Revenues in this segment amounted to $571 million, down 1.2% year over year. This segment recorded an adjusted operating income of $38 million compared with $41 million in the year-ago quarter. The adjusted operating margin was 6.7%, down year over year.

Defense Systems: Revenues in this segment amounted to $582 million, up 11.5% year over year. This segment recorded an adjusted operating income of $37 million in line with the year-ago period. The adjusted operating margin was 6.4%, down year over year.

LDOS’ Financials

Cash and cash equivalents totaled $974 million as of Oct. 3, 2025, compared with $849 million as of Jan. 3, 2025.

As of Oct. 3, 2025, the long-term debt, net of the current portion, amounted to $4.63 billion compared with $4.05 billion as of Jan. 3, 2025.

Net cash flow from operating activities totaled $711 million at the end of the third quarter of 2025 compared with $647 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 $11.45-$11.75 per share, higher than its earlier projection of $10.15-$10.45. The Zacks Consensus Estimate for earnings is pegged at $11.41 per share, which lies below the company’s new guidance.

LDOS still expects 2025 revenues to be in the band of $17.00-$17.25 billion. The Zacks Consensus Estimate for revenues is pegged at $17.15 billion, above the midpoint of the company’s newly guided range.

It still expects to generate cash flow from operating activities of approximately $1.65 billion.

LDOS’ Zacks Rank

Leidos Holdings currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Defense Releases

Textron Inc. TXT reported third-quarter 2025 adjusted earnings of $1.55 per share, which beat the Zacks Consensus Estimate of $1.47 by 5.4%. The bottom line also rose 10.7% from $1.40 in the year-ago quarter.

The company reported total revenues of $3.6 billion, which missed the Zacks Consensus Estimate of $3.71 billion by 2.8%. Moreover, revenues increased 4.9% from the year-ago quarter’s level of $3.43 billion.

RTX Corporation’s RTX third-quarter 2025 adjusted earnings per share of $1.70 beat the Zacks Consensus Estimate of $1.42 by 19.7%. The bottom line also improved 17.2% from the year-ago quarter’s level of $1.45.

RTX’s third-quarter sales totaled $22.48 billion, which surpassed the Zacks Consensus Estimate of $21.48 billion by 4.6%. The top line also surged a solid 11.9% from $20.09 billion recorded for the third quarter of 2024.

Northrop Grumman Corporation NOC reported third-quarter 2025 adjusted earnings of $7.67 per share, which beat the Zacks Consensus Estimate of $6.49 by 18.2%. The bottom line also increased 9.6% from $7 registered in the prior-year quarter.

NOC’s total sales of $10.42 billion in the third quarter missed the Zacks Consensus Estimate of $10.72 billion by 2.8%. However, the top line rose 4.3% from $10 billion reported in the year-ago quarter.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research