Revenue Growth: First quarter revenue grew 7.5% year-over-year organically.
Adjusted EBITDA Margin: Achieved a record of 12.3% in the first quarter.
Non-GAAP EPS Growth: Year-over-year non-GAAP EPS increased by 56%.
Stock Buyback: Implemented a stock buyback program, repurchasing $150 million worth of shares in the quarter.
Segment Performance: Notable revenue increases include National Security and Digital by 2%, Health and Civil by 19%, Commercial and International by 4%, and Defense Systems by 7%. Health and Civil segment particularly stood out in performance.
Profitability: Adjusted EBITDA was $490 million for the quarter, up 42% year-over-year. Non-GAAP net income was $313 million, and non-GAAP diluted EPS was $2.29, up 53% and 56% respectively.
Future Guidance
Revenue Expectations: Updated revenue guidance for 2024 is between $16 billion and $16.4 billion, an increase of approximately $300 million from previous forecasts.
Adjusted EBITDA Margin: The new guidance suggests a mid- to high 11% adjusted EBITDA margin for 2024.
Non-GAAP Diluted EPS: Raised guidance to a new range of $8.40 to $8.80, up $0.90 from prior forecasts.
Operating Cash Flow Target: Increased by $200 million to approximately $1.3 billion for the year.
Business Development: Positive momentum with a net of $3.7 billion booked in the first quarter and a book-to-bill of 0.9x for the quarter.
Trends, Market Conditions, Sentiment
Customer Budget Environment: Improved confidence stems from a clearer federal government budget environment, enhancing near-term growth prospects.
Organizational Realignment: The new capability-based organizational structure has been beneficial, enabling significant value across the company.
Investment in Technology: Continued focus on investing in organic disruptive technologies, particularly AI, cybersecurity, and software solutions.
Market Opportunities: Mentioned opportunities in global security partnerships (e.g., AUKUS) and adapting to evolving digital and national security demands.
Competitive Strategy: Emphasis on leveraging advanced technologies and efficient operational models to maintain and grow market leadership.
Notable Quotes
On Growth and Strategy: “We’re thrilled to report a very robust start for Leidos in 2024… taking purposeful steps to position Leidos for an awesome future.”
On Financial Performance: “These results demonstrate that our new capability-based organization is unlocking significant value across the company.”
On Future Outlook: “We are significantly increasing our 2024 guidance and now expect to far exceed our previous multi-year financial commitments.”
On Technology Investment: “Technology innovation is a core of Leidos… making superior ‘golden bolts’ technologies foundational to our strategy.”
On Strategic Focus: “Principles of our upcoming strategy will be doubling down on our core strengths… building Trusted Mission AI into everything we do.”
