Financial Data and Key Metrics Changes - The company reported Q2 revenues of $4.25 billion, up 3% year-over-year, and adjusted EBITDA of $647 million, up 16% year-over-year, with an EBITDA margin of 15.2%, the highest ever by 100 basis points [27][28][37] - Non-GAAP diluted EPS grew 22% to $3.21, surpassing the previous record of $2.97 [28] - Operating cash flow was $486 million, with free cash flow of $457 million, resulting in a free cash flow conversion of 110% [34] Business Line Data and Key Metrics Changes - National Security and Digital revenues increased by 3% year-over-year, with a non-GAAP operating income margin of 10.4% [30] - Health and Civil revenues increased by 1% year-over-year, with a non-GAAP operating income margin of 24.9% [32] - Defense Systems revenue saw the highest growth at 10% year-over-year, with non-GAAP operating margins of 9.8% [33] Market Data and Key Metrics Changes - The company noted a robust pipeline of opportunities amounting to $70 billion, with approximately 75% being new work rather than recompete [102] - The administration's funding priorities are expected to drive significant opportunities in areas such as FAA modernization and border security [61][62] Company Strategy and Development Direction - The company is executing its North Star 2030 strategy, focusing on five growth pillars: space and maritime, energy infrastructure, digital modernization and cyber, mission software, and managed health services [8][22] - The company is actively seeking constructive acquisitions that align with its growth pillars and enhance shareholder value [22][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the improving customer decision environment and the expected increase in awards in the second half of the year [20][21] - The company raised its full-year guidance for 2025, reflecting confidence in funding trajectories and ongoing contract reviews [36][37] Other Important Information - The company completed the Kudu Dynamics acquisition, adding $400 million in pipeline opportunities and enhancing its competitive position [22][34] - The company is focused on leveraging AI and automation to drive down costs and improve operational efficiency [29][16] Q&A Session Summary Question: Impact of GSA initiative on financials - Management views the GSA's increased role in procurement positively, as it aligns with the company's capabilities and focus on mission systems [41][42][46] Question: Opportunities for organic investment in maritime space - Management highlighted strong demand signals and ongoing investments in unmanned autonomous vehicles, particularly in the Indo-Pacific region [55][56] Question: Scale of opportunities in scanning business - Management identified billions in addressable funding related to FAA modernization and border security, emphasizing the company's readiness to capture these opportunities [61][62] Question: Competitive landscape and recent large awards - Management acknowledged the competitive landscape but emphasized their unique capabilities in deploying AI and mission systems, viewing it as an opportunity rather than a threat [82][84] Question: Update on Dynetics acquisition and growth - Management expressed confidence in the Dynetics acquisition, noting improved performance and growth potential in defense capabilities [90][92]

Company Performance - Leidos reported quarterly earnings of $3.21 per share, exceeding the Zacks Consensus Estimate of $2.63 per share, and showing an increase from $2.63 per share a year ago, resulting in an earnings surprise of +22.05% [1] - The company achieved revenues of $4.25 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.52% and up from $4.13 billion year-over-year [2] - Over the last four quarters, Leidos has consistently surpassed consensus EPS estimates and revenue estimates [2] Stock Performance - Leidos shares have increased approximately 11.7% since the beginning of the year, outperforming the S&P 500's gain of 7.6% [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating expectations for it to outperform the market in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $2.63 on revenues of $4.28 billion, and for the current fiscal year, it is $10.81 on revenues of $17.14 billion [7] - The outlook for the Computers - IT Services industry, where Leidos operates, is currently in the bottom 39% of Zacks industries, which may impact stock performance [8]

Financial Performance - Revenue increased by 2.9% from $4,132 million in Q2 FY24 to $4,253 million in Q2 FY25[14] - Adjusted EBITDA margin improved by 170 bps from 13.5% in Q2 FY24 to 15.2% in Q2 FY25[14] - Non-GAAP diluted EPS increased by 22.1% from $2.63 in Q2 FY24 to $3.21 in Q2 FY25[14] - Non-GAAP free cash flow was $457 million, driven by strong EBITDA generation and resulting in a free cash flow conversion of 110%[17] Segment Performance - National Security & Digital segment revenue increased by 3.3% from $1,813 million to $1,872 million[16] - Health & Civil segment revenue increased by 0.7% from $1,263 million to $1,272 million[16] - Commercial & International segment revenue increased by 0.9% from $561 million to $566 million[16] - Defense Systems segment revenue increased by 9.7% from $495 million to $543 million[16] - Commercial & International Non-GAAP OI % increased by 780 bps from 0.7% to 8.5%[16] Guidance - Revenue guidance is $17.00 - $17.25 billion[18] - Adjusted EBITDA margin guidance is mid 13%[18] - Non-GAAP Diluted EPS guidance is $11.15 - $11.45[18] - Cash Flows Provided by Operating Activities guidance is approximately $1.65 billion[18]

Core Insights - Leidos Holdings, Inc. reported strong financial results for Q2 FY2025, with significant growth in earnings and revenue, driven by a differentiated portfolio and alignment with government priorities [2][4][8] Financial Performance - Revenues for Q2 FY2025 reached $4.25 billion, a 3% increase from $4.13 billion in Q2 FY2024, attributed to heightened demand across all customer segments, particularly in Defense Systems [4][8] - Net income for the quarter was $393 million, or $3.01 per diluted share, reflecting year-over-year increases of 21% and 27%, respectively [4][8] - Adjusted EBITDA was $647 million, up 16% year-over-year, with an adjusted EBITDA margin of 15.2%, compared to 13.5% in the prior year [5][8] Cash Flow and Capital Management - The company generated $486 million in net cash from operating activities, with free cash flow of $457 million for the quarter [6][8] - Leidos made a strategic acquisition of Kudu Dynamics for $291 million, enhancing its capabilities in artificial intelligence-enabled cyber solutions [6][8] Business Awards and Backlog - Net bookings totaled $3.9 billion, resulting in a backlog of $46.2 billion, with $7.1 billion funded [8][9] - Significant contract awards included a $1.3 billion contract from the Intelligence Community and a $350 million subcontract for the U.S. Air Force [9][10] Forward Guidance - The company raised its fiscal year 2025 guidance, projecting revenues between $17.00 billion and $17.25 billion, and non-GAAP diluted EPS between $11.15 and $11.45 [11][8]

EXHIBIT 99.1 Leidos Posts Strong Second Quarter Results and Raises Full-Year Guidance RESTON, Va., August 5, 2025 – Leidos Holdings, Inc. (NYSE: LDOS) today reported financial results for the second quarter of fiscal year 2025, highlighted by robust earnings and revenue growth. "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," said Leidos Chief Executive Officer Tom Bell. "With re ...

Analysts on Wall Street project that Leidos (LDOS) will announce quarterly earnings of $2.63 per share in its forthcoming report, representing no change year over year. Revenues are projected to reach $4.23 billion, increasing 2.4% from the same quarter last year. The current level reflects a downward revision of 0.8% in the consensus EPS estimate for the quarter over the past 30 days. This demonstrates how the analysts covering the stock have collectively reappraised their initial projections over this per ...

Company Overview - Leidos (LDOS) is expected to report flat earnings of $2.63 per share for the quarter ended June 2025, with revenues projected at $4.23 billion, reflecting a 2.4% increase year-over-year [3][12] - The consensus EPS estimate has been revised down by 0.76% over the last 30 days, indicating a reassessment by analysts [4] Earnings Expectations - The earnings report is anticipated to be released on August 5, and the stock may rise if actual results exceed expectations, while a miss could lead to a decline [2] - Leidos has an Earnings ESP of +1.46%, suggesting a likelihood of beating the consensus EPS estimate, supported by a Zacks Rank of 2 (Buy) [12][10] Historical Performance - In the last reported quarter, Leidos exceeded the expected earnings of $2.47 per share by delivering $2.97, resulting in a surprise of +20.24% [13] - The company has consistently beaten consensus EPS estimates in the last four quarters [14] Industry Context - DXC Technology, another player in the IT services industry, is expected to report a decline in earnings per share to $0.64, a year-over-year decrease of -13.5%, with revenues projected at $3.07 billion, down 5.2% [18][19] - DXC Technology has an Earnings ESP of -3.13% and a Zacks Rank of 2 (Buy), making it challenging to predict a beat on the consensus EPS estimate [20]

Core Insights - Leidos has been awarded a $128 million task order by the FBI for agile software development and modernization of the Next Generation Identification (NGI) system, which serves as the bureau's biometric and criminal history repository [1][4] Company Overview - Leidos is a leader in industry and technology, serving both government and commercial customers with innovative digital and mission solutions. The company is headquartered in Reston, Virginia, and employs approximately 47,000 people globally. For the fiscal year ending January 3, 2025, Leidos reported annual revenues of about $16.7 billion [5] Project Details - The NGI system's repository enhances investigative capabilities for the FBI and other law enforcement and intelligence agencies. It is managed by the FBI's Criminal Justice Information Services (CJIS) division and is recognized as the world's largest electronic repository of biometric and criminal history information. Leidos has improved the system's accuracy for fingerprint identification to over 99.6 percent [2][3] - The task order includes a one-year base period of performance with four option years, and Leidos will enhance the system with mobile applications, biometric algorithms, automated testing, and integration of emerging technologies [4]

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside- audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 1.09% increase. Leidos is holding a Zacks Rank of #1 (Strong Buy) right now. Looking at its valuation, Leidos is holding a Forward P/E ratio of 15.02. Its industry sports an average Forward P/E of 19.78, so one might conclud ...

Group 1 - Leidos (LDOS) has shown strong year-to-date performance, returning approximately 13.2%, outperforming the average gain of 7.8% in the Computer and Technology sector [4] - The Zacks Rank for Leidos is currently 2 (Buy), indicating a favorable outlook based on earnings estimate revisions and improving earnings outlooks [3] - Leidos is part of the Computers - IT Services industry, which has seen an average loss of 9.9% this year, further highlighting Leidos' strong performance relative to its peers [6] Group 2 - Creative Realities, Inc. (CREX) has also outperformed the sector with a year-to-date increase of 38%, and its consensus EPS estimate has risen by 196.8% over the past three months [5] - The Computers - IT Services industry, which includes Leidos, is ranked 91 in the Zacks Industry Rank, while the Internet - Software industry, which includes Creative Realities, is ranked 67 and has gained 15.9% year to date [6] - Investors should continue to monitor both Leidos and Creative Realities, Inc. for potential sustained strong performance in the Computer and Technology sector [7]