Leidos Holdings Inc. (NYSE:LDOS) reported fourth-quarter earnings ahead of expectations on Tuesday, although revenue came in below Wall Street estimates, sending the stock down 1.59% in pre-market trading.
The national security and digital solutions contractor delivered adjusted earnings per share of $2.76, beating the $2.60 consensus and marking a 16% increase year over year. Quarterly revenue totaled $4.21 billion, short of the $4.31 billion analysts had forecast and 4% lower than the same period a year earlier. The company attributed the decline largely to an extra work week in the fourth quarter of fiscal 2024 and a six-week government shutdown during the fourth quarter of 2025.
For full-year fiscal 2025, Leidos generated revenue of $17.17 billion, up 3% from the prior year, while adjusted earnings per share climbed 17% to $11.99.
“Our performance this quarter and throughout the year underscores the incredible resilience of our team and the power of our strategy in action,” said Leidos Chief Executive Officer Tom Bell. “In a dynamic market environment, we delivered solid top-line growth, outstanding earnings power, and robust cash generation, which provide a strong foundation for future investment.”
Net bookings reached $5.6 billion in the fourth quarter, translating into a book-to-bill ratio of 1.3 and signaling healthy demand. Among the key awards was a five-year, $2.2 billion U.S. Air Force contract for air defense systems.
Operating income rose to $473 million for the quarter, with the operating margin expanding to 11.2% from 9.6% a year earlier. Operating cash flow totaled $495 million, marking the strongest fourth-quarter cash performance in the company’s history.
Looking ahead to fiscal 2026, Leidos expects revenue in the range of $17.5 billion to $17.9 billion, compared with analyst estimates of $17.89 billion. Adjusted earnings per share are projected between $12.05 and $12.45, broadly in line with the $12.29 consensus forecast.
Subsequent to the quarter’s close, Leidos announced an agreement to acquire power engineering firm Entrust for $2.4 billion, a transaction aimed at expanding its footprint in the utilities sector.