Summary
Leidos opened fiscal 2021 with a stronger top and bottom line. Revenue for the first quarter ended April 2, 2021 was $3.32 billion, up 14.7% from $2.89 billion in the prior-year quarter. Operating income rose 60.4% to $308 million from $192 million. Net income climbed 78.3% to $205 million from $115 million. Diluted EPS was $1.42, up from $0.80. Operating margin expanded to 9.3% from 6.6%. On a non-GAAP basis, diluted EPS was $1.73 versus $1.19, and non-GAAP operating margin was 11.1% versus 8.5%. The company said organic revenue, excluding acquisitions, increased $258 million, or 8.9%.
The quarter featured broad demand across Leidos' markets. Net bookings totaled $3.8 billion, a book-to-bill ratio of 1.2. Total backlog stood at $32.6 billion, with $7.0 billion funded. New awards included a Military and Family Life Counseling contract with a total estimated value of approximately $1 billion, a U.S. Customs and Border Protection multi-energy portal systems contract valued at $480 million, a Naval Array Technical Support Center contract valued at $149.2 million, and classified U.S. intelligence community contracts valued at $822 million if all options are exercised. Management pointed to program wins and higher volumes on certain programs as drivers. Acquisitions of Dynetics, the SD&A Businesses, and 1901 Group also contributed to growth, though the company highlighted organic expansion as the main story. The company said significant organic growth was delivered across all business segments.
Cash generation was the main soft spot. Operating cash flow for the quarter was $239 million, down 35.8% from $372 million in the prior-year quarter. Leidos attributed the decline to lower customer advance payments, lower sales of accounts receivable, and the timing of vendor payments. Capital expenditures were $26 million, down 40.9% from $44 million. Deferred revenue, current portion, was $433 million, up 3.1% from $420 million. Remaining performance obligations were $16.0 billion, up 15.9% from $13.8 billion. The RPO increase suggests a healthy pipeline of future work, even as near-term cash conversion weakened.
Guidance for the full fiscal year 2021 was revised upward on profitability. Revenue guidance was unchanged. Adjusted EBITDA margin guidance moved to 10.5% to 10.7% from 10.3% to 10.5%. Non-GAAP diluted EPS guidance rose to $6.35 to $6.65 from $6.15 to $6.45. Cash flow guidance was also raised. Management said first quarter results reflect perseverance, focus, and execution, and that early momentum favorably positions Leidos to deliver on its full year financial commitments. The company does not reconcile forward-looking adjusted EBITDA margins or non-GAAP diluted EPS to GAAP net income because certain deductions cannot be forecast with reasonable certainty. Risks include the ongoing COVID-19 pandemic, U.S. government budget and appropriations uncertainty, delays in contract awards or procurement, competitor protests, and reliance on U.S. government spending. Leidos generated approximately 87% of total revenues from U.S. government contracts and about 9% from international customers. Management also flagged international regulatory and geopolitical risks, potential tariffs on imported IT hardware, cybersecurity and data security threats, and the challenge of attracting and retaining skilled employees with security clearances.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2021 | Q4 FY2020 | QoQ | Q1 FY2020 | YoY |
|---|---|---|---|---|---|
| Revenue | $2.86B | $2.92B | -2.1% | $2.58B | +11.1% |
| Gross profit | $370.0M | $397.0M | -6.8% | $356.0M | +3.9% |
| Gross margin | 12.9% | 13.6% | -0.7 pp | 13.8% | -0.9 pp |
| Sales & marketing | $197.0M | $171.0M | +15.2% | $166.0M | +18.7% |
| Operating income (loss) | $192.0M | $261.0M | -26.4% | $192.0M | ±0.0% |
| Operating margin | 6.7% | 8.9% | -2.2 pp | 7.5% | -0.8 pp |
| Net income (loss) | $115.0M | $181.0M | -36.5% | $189.0M | -39.2% |
| Net margin | 4.0% | 6.2% | -2.2 pp | 7.3% | -3.3 pp |
| Diluted EPS | $0.80 | $1.25 | -$0.45 | $1.29 | -$0.49 |
Risks
Approximately 87% of total revenues for the quarter ended April 2, 2021 came from U.S. government contracts, so performance is affected by overall U.S. government spending levels and alignment with current and future budget priorities, including the GFY 2022 discretionary funding request.
COVID-19 did not materially impact revenues and operating income for the quarter ended April 2, 2021, but the full extent remains uncertain and depends on pandemic duration, spread, vaccine distribution, and the timing and amount of CARES Act recoveries.
Sales to international customers represented approximately 9% of total revenues for the quarter ended April 2, 2021, increasing exposure to international regulatory and geopolitical risks; higher tariffs on imported goods and materials may increase procurement costs, though the company expects to recover certain portions through cost-plus contracts.
Net cash provided by operating activities decreased $133 million for the quarter ended April 2, 2021 compared to the prior year quarter, primarily due to lower customer advance payments, lower sale of accounts receivable, and timing of vendor payments; COVID-19 may also impact liquidity.
Net bookings were an estimated $3.8 billion for the quarter ended April 2, 2021, compared to $5.5 billion for the prior year quarter, a decline that may signal slower award activity even as total backlog increased to $32.581 billion at April 2, 2021 from $31.912 billion at January 1, 2021.
SaaS KPIs
All quarters →Net bookings
Book-to-bill ratio
Funded backlog
Backlog
Summary, forecast, risks and KPIs are extracted from Leidos Holdings, Inc.'s SEC filings for Q1 FY2021 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 1, 2026.