Leidos(LDOS) - 2024 Q4 - Annual Results

Financial Performance - Revenues for Q4 2024 were $4.37 billion, up 10% year-over-year, and total revenues for the fiscal year were$ 16.66 billion, up 8% compared to 2023[8]. - Net income for Q4 2024 was $282 million, or$ 2.12 per diluted share, representing increases of 23% and 28% year-over-year, respectively[9]. - Non-GAAP diluted EPS for Q4 2024 was $2.37, up 19% year-over-year, while for the fiscal year, it was$ 10.21, up 40% compared to 2023[10]. - Adjusted EBITDA for Q4 2024 was $508 million with an 11.6% margin, and for the fiscal year, it was$ 2.15 billion with a 12.9% margin, reflecting a 29% increase year-over-year[10]. - The net income margin for the fiscal year increased to 7.5%, up from 1.3% in 2023, due to improved program execution and cost control[10]. - For the three months ended January 3, 2025, Leidos reported an operating income of $421 million, with non-GAAP results showing an adjusted operating income of$ 465 million[52]. - The net income attributable to Leidos common stockholders for the same period was $284 million, resulting in a diluted EPS of$ 2.12, which adjusted to $2.37[52]. - The EBITDA for the three months ended January 3, 2025, was reported at$ 501 million, with an EBITDA margin of 11.5%[52]. - For the year ended January 3, 2025, the operating income was $1,827 million, with non-GAAP results showing an adjusted operating income of$ 2,007 million[55]. - The net income attributable to Leidos common stockholders for the year was $1,254 million, leading to a diluted EPS of$ 9.22, adjusted to $10.21[55]. - The EBITDA for the year ended January 3, 2025, was$ 2,122 million, with an EBITDA margin of 12.7%[55]. Cash Flow and Shareholder Returns - Cash flows from operations for Q4 2024 were $299 million, and for the fiscal year, they totaled$ 1.39 billion[12]. - The company returned $459 million to shareholders in Q4 2024, including$ 406 million in share repurchases[13]. - Free cash flow for the year ended January 3, 2025, was $1,243 million, with a free cash flow conversion ratio of 90%[60]. - The company reported a net cash provided by operating activities of$ 1,392 million for the year ended January 3, 2025[60]. Backlog and Future Prospects - The company reported a backlog of $43.6 billion at the end of fiscal year 2024, up 18% year-over-year, with a book-to-bill ratio of 1.4[16]. - Notable new business awards included a$ 4.1 billion contract for the U.S. Army and a $2.6 billion contract with the TSA, contributing to strong future revenue prospects[16]. - Leidos has initiated guidance for FY 2025, forecasting revenues between$ 16.9 billion and $17.3 billion and non-GAAP diluted EPS between$ 10.35 and $10.75[18]. - Total backlog as of January 3, 2025, was$ 43.55 billion, with funded backlog at $8.41 billion and unfunded backlog at$ 35.15 billion[43]. - The estimated backlog for National Security & Digital was $21.97 billion, with$ 2.88 billion funded and $19.09 billion unfunded[43]. Segment Performance - National Security & Digital revenues were$ 1.89 billion for the quarter, up 5% year-over-year, and $7.37 billion for the year, up 2%[33]. - Health & Civil revenues increased to$ 1.33 billion for the quarter, a 16% rise, and $5.02 billion for the year, an 18% increase[35]. - Commercial & International revenues reached$ 604 million for the quarter, up 12%, and $2.25 billion for the year, up 6%[36]. - Defense Systems revenues were$ 539 million for the quarter, a 7% increase, and $2.03 billion for the year, an 8% rise[38]. - Health & Civil operating income margin improved to 21.0% for the quarter, compared to 14.2% in the prior year[35]. - National Security & Digital operating income margin for the quarter was 9.2%, down from 10.3% in the prior year[34]. - Commercial & International operating income margin for the year was 4.6%, a significant recovery from (26.3)% in the prior year[37]. - The National Security & Digital segment generated an operating income of$ 720 million, while the Health & Civil segment reported $1,095 million for the year ended January 3, 2025[58]. Assets and Liabilities - Total assets as of January 3, 2025, were$ 13,104 million, an increase from $12,695 million as of December 29, 2023[30]. - Total liabilities as of January 3, 2025, were$ 8,644 million, compared to $8,437 million as of December 29, 2023[30]. - The company’s long-term debt, net of current portion, decreased to$ 4,052 million as of January 3, 2025, from $4,664 million as of December 29, 2023[30]. - The company’s retained earnings increased to$ 3,410 million as of January 3, 2025, compared to $2,364 million as of December 29, 2023[30]. Impairments and Costs - The company reported a goodwill impairment charge of$ 596 million for the year ended December 29, 2023[29]. - The company incurred acquisition, integration, and restructuring costs amounting to $10 million for the three months ended December 29, 2023[54]. - Leidos incurred acquisition, integration, and restructuring costs of$ 36 million for the year ended December 29, 2023[59]. - The company reported a significant goodwill impairment charge of $570 million for the year ended December 29, 2023[60].