Leidos saw its revenue increase 7 percent year-over-year to $4.2 billion during the third quarter of fiscal year 2024 and attributed the revenue growth to increased demand across all customer segments, particularly for managed health services.
In an earnings release published Tuesday, the defense and IT services contractor said it recorded $362 million in Q3 FY 2024 net income and diluted earnings per share of $2.68.
The Reston, Virginia-based company reported $8.1 billion in Q3 net bookings with a book-to-bill ratio of 1.9 and ended the quarter with a total backlog of $40.6 billion, with $9.1 billion of that funded.
Adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, for the quarter was $596 million, while cash flows from operations reached $656 million.
Q3 Results of 4 Defense Segments
The national security and digital business of Leidos reported $1.87 billion in third-quarter revenues, up 1 percent from the prior-year period. The company said revenue increased across several IT programs and that the rise in segment profitability was associated with volume and efficiencies on certain fixed price programs.
The company’s health and civil business segment saw its quarterly revenues rise 16 percent to $1.23 billion, driven by increased volumes within the managed health services business and net write-ups on certain initiatives.
The defense systems segment logged $522 million in Q3 revenues, reflecting a 13 percent increase from the same period the previous year. Leidos associated the double-digit growth with improved execution on fixed-price development programs.
Leidos reported $578 million in Q3 revenues for its commercial and international business, up 5 percent from the prior-year period.
CEO on BlackArrow Program, Cyber Contract Wins
During the earnings call Tuesday, Leidos CEO Thomas Bell discussed the company’s cooperative research and development agreement, or CRADA, for Black Arrow, a next-generation small cruise missile system.
âRecently, Black Arrow completed multiple tests at customer ranges and will undertake even more advanced flight tests this fall. We believe that Black Arrow will help meet the DoD’s critical need for affordable standoff strike systems that can be quickly produced and fielded in volume,â Bell noted.
The 2024 Wash100 awardee told analysts that Leidos won over $700 million in new and takeaway wins in full-spectrum cyber. He stated that the contract wins reflect the company’s capability in the market and success from its investments in platforms within the digital modernization sector.
In response to an analyst’s question about the contract wins, the chief executive called cyber âone of the golden bolts” the company has been investing in as a core competency.
âAnd so not only are we very proud of the team that’s leveraging our cyber chops for cyber wins, especially for our very, very important in the intelligence community customer,â Bell said.
âBut we’re also very proud of the fact that our cyber capabilities and our zero trust gravitas is frequently commented on by customers as a reason we win in other markets also. So we’re very proud of the return on investment we’re getting in our cyber security business and as an underlying capability of everything Leidos does,” he added.
FY 2024 Guidance
Leidos raised its forward guidance across all metrics for FY 2024, expecting to record revenues between $16.35 billion and $16.45 billion.
The contractor also increased its adjusted EBITDA guidance from approximately 12 percent to the high 12 percent range and updated its non-GAAP diluted earnings per share guidance to $9.80 to $10, up from the prior guidance of $8.60 to $9.
