Leidos’ Q2 2025 revenue up 3% driven by demand in defence
Leidos reported a 3% increase in second quarterly 2025 revenues, reaching $4.25bn compared to the same period in the previous year.
The growth is attributed to a rise in demand from all customer segments, with the defence systems sector experiencing significant interest for advanced military products.
The defence systems segment of Leidos has recorded a 10% revenue rise in Q2 FY25, reaching $543m.
The surge in revenue is largely attributed to heightened activity in space sensing and integrated air defence systems, particularly with the Indirect Fires Protection Capability Increment 2 system.
The segment’s operating income also saw an impressive increase of 20%, rising from $34m to $41m year-over-year.
The operating income margin improved to 7.6%, compared to 6.9% in the prior year’s quarter, although there was a slight decrease in the non-GAAP operating margin from 10.3% to 9.8%.
Leidos’ national security and digital segment did not lag far behind, reporting a revenue increase of 3% to $1.87bn. This growth was propelled by new contract awards, higher volumes on the Sentinel program, and contributions from Kudu Dynamics.
Despite these gains, this segment’s operating income margins experienced a marginal decline to 10.0% from 10.1% in the previous year’s quarter, while non-GAAP operating income margin remained steady at 10.4%.
The company’s net bookings for the quarter amounted to $3.9bn, yielding a book-to-bill ratio of 0.9.
Consequently, Leidos’ backlog reached $46.2bn at the end of the quarter, with $7.1bn funded.
Leidos CEO Tom Bell said: “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.”
In the year-to-date, the defence systems segment’s total revenue climbed to $1.05bn, up from $969m last year, with operating margin also increasing to 7.1% from 5.7%.
“With record margins, continued double-digit EPS growth, and strong cash conversion, we are delivering on our financial commitments, and we are strategically deploying capital to grow shareholder value. We are pleased to improve our guidance outlook for 2025 given two quarters of exceptional performance and enhanced clarity on the macro environment,” Tom Bell added.
In October of 2024, Leidos secured a contract worth up to $249m aimed at enhancing biometric applications across US Army installations and select joint-service access points worldwide.
