Leidos Holdings, Inc. (NYSE:LDOS) reported third-quarter results that topped Wall Street forecasts, prompting the defense and IT services group to raise its full-year earnings guidance despite ongoing uncertainty related to the U.S. government shutdown. Shares rose 1.82% in pre-market trading following the announcement.
The company posted adjusted earnings of $3.05 per share, well above analyst expectations of $2.71, while revenue climbed 7% year-over-year to a record $4.5 billion, exceeding the consensus forecast of $4.28 billion. Organic revenue growth reached 6%.
“Leidos continues to deliver exceptional results through the strength of our portfolio of mission-critical work as well as the innovation, agility, and discipline of our talented workforce,” said Tom Bell, Chief Executive Officer. “Despite the government shutdown, we are raising our 2025 earnings and margin guidance and holding firm on our 2025 revenue and cash guidance.”
Net income came in at $369 million, up 2% from the prior year, while the net income margin slipped slightly to 8.3% from 8.6%. Adjusted EBITDA grew 3% to $616 million, representing a 13.8% margin.
Leidos reported $5.9 billion in new bookings during the quarter, achieving a book-to-bill ratio of 1.3. The company’s total backlog rose 5% year-over-year to $47.7 billion, while funded backlog jumped 27% sequentially to $9.1 billion.
For fiscal year 2025, Leidos raised its earnings guidance to $11.45–$11.75 per share from a previous range of $11.15–$11.45, while keeping its revenue forecast unchanged at $17.00–$17.25 billion. The company also lifted its adjusted EBITDA margin outlook to the “high 13%” range from “mid-13%.”
Notable contract wins in the quarter included a $2.2 billion seven-year intelligence community contract, a $760 million NASA subcontract for astronaut health services, and a $540 million counter-terrorism software contract spanning seven years.
Leidos generated $711 million in operating cash flow and $680 million in free cash flow during the period, returning $153 million to shareholders through dividends and share repurchases.