Leidos has raised its fiscal 2025 (FY25) earnings and margin guidance after registering a 7% increase in revenue for the third quarter (Q3), reaching a “record” $4.47bn.
This rise was largely driven by increased demand for innovative products and solutions for national security and defence missions.
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The company’s revenue in the second quarter was $4.25bn, a 3% growth from the prior year quarter.
During the third quarter ended 3 October 2025, Leidos’ Defence Systems segment revenues rose by 11% to $582m, mainly due to higher volumes in integrated air defence systems. This includes the Indirect Fires Protection Capability Increment 2 system and radar surveillance systems.
The operating income margin of this segment was 6.4% in Q3 FY25, down from 7.1% in the previous year quarter. The non-GAAP margin was 8.9%, compared to 10.2% in Q3 FY24, due to a higher mix of materials in early production phases.
The company cited the increased material mix typical of early production phases across several programmes as the reason for the decline in profitability.
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By GlobalDataIn the National Security & Digital segment, revenue grew 8% to $2.02bn, fuelled by new contracts, higher volumes in Defence IT and Intelligence Community support, and a $26m boost from acquiring Kudu Dynamics.
The segment’s operating income margin dropped slightly to 9.5% in Q3 FY25 from 10.0% in the same period a year ago.
As of 3 October 2025, Leidos’ backlog was valued at $47.7bn, with $9.1bn funded and $38.6bn unfunded.
The National Security & Digital segment had a backlog of $26.4bn, while the Defence Systems segment contributed $5.35bn.
Leidos CEO Tom Bell said: “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.”
Leidos has increased its adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) margin expectation to the high 13% range, up from the mid 13% range previously.
Additionally, the non-GAAP diluted earnings per share (EPS) guidance is updated to a range of $11.45 to $11.75, compared to the prior range of $11.15 to $11.45.
The company maintained its revenue projections between $17.00bn and $17.25bn.
“Despite the government shutdown, we are raising our 2025 earnings and margin guidance and holding firm on our 2025 revenue and cash guidance. Moreover, we are optimistic about our future given our alignment with the priorities of the administration and confidence that our customers will move out aggressively in search of smarter and more efficient outcomes for the nation,” Tom Bell added.
