Leidos Holdings, Inc. · NYSE:LDOS
Leidos — Q2 2023 Earnings Presentation
13 slides from Leidos's earnings presentation, Aug 1, 2023
Slide 1: Leidos Q2 FY23 Earnings Conference Call
Leidos Q2 FY23 Earnings Conference Call AUGUST 1, 2023
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS Certain statements in this presentation contain or are based on our compliance with various U.S. government and other government intellectual property and other proprietary rights by third parties of "forward-looking" information within the meaning of the Private procureme
Slide 3: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES This presentation includes certain non-GAAP financial measures, Leidos does not provide a reconciliation of forward-looking such as organic growth, non-GAAP operating income, non-GAAP adjusted EBITDA margins or non-GAAP diluted EPS to GAAP net operating margin, non-GAAP e
Slide 4: CEO Key Messages
CEO KEY MESSAGES Strong Q2 Initial Assessment – Revenues up 7% YoY AREAS FOR STRENGTHS WAY FORWARD IMPROVEMENT – Adjusted EBITDA margin of 10.9% Incredible team Leverage acquisitions New “North Star” – Non-GAAP diluted Compelling technology Promises made, earnings per share of $1.80 creation promise
Slide 5: Q2 FY23 Results: Income Statement
Q2 FY23 RESULTS: INCOME STATEMENT Revenues Adjusted EBITDA Margin Non-GAAP Diluted EPS $3,838M 10.9% $1.80 $3,597M 10.2% $1.59 Q2 FY22 +6.7% Q2 FY23 Q2 FY22 +70 bps Q2 FY23 Q2 FY22 +13.2% Q2 FY23 LEIDOS Leidos Q2 2023 Earnings Conference Call | Making the world safer, healthier, and more efficient 5
Slide 6: Q2 FY23 Results: Reporting Segments
Q2 FY23 RESULTS: REPORTING SEGMENTS Defense Solutions Civil Health $2,187M $2,052M Revenues $857M $902M $688M $749M Q2 FY22 +6.6% Q2 FY23 Q2 FY22 +5.3% Q2 FY23 Q2 FY22 +8.9% Q2 FY23 Non-GAAP OI Margin 19.8% 17.0% 8.3% 9.3% 9.1% 6.5% Q2 FY22 +100 bps Q2 FY23 Q2 FY22 +260 bps Q2 FY23 Q2 FY22 -280 bps
Slide 7: Q2 FY23 Results: Cash Flow / Balance Sheet
Q2 FY23 RESULTS: CASH FLOW / BALANCE SHEET - Operating cash flow $164M Cash flow generation driven Cash Flow Generation by strong collections and - Non-GAAP free cash flow $124M working capital management - DSO of 59 days, 3-day improvement sequentially - Total return to shareholders $50M Following
Slide 8: 2023 Guidance
2023 GUIDANCE – Increase revenue range $150 million at midpoint MEASURE CURRENT PRIOR – Widen EBITDA margin range to 40 basis points Revenues (billions) $14.9 - $15.2 $14.7 - $15.1 • Variability from products Adjusted EBITDA Margin 10.1% - 10.5% 10.3% - 10.5% • Fixed price special project work Non-G
Slide 9: Appendix: Non-GAAP Reconciliations
APPENDIX Non-GAAP Reconciliations LEIDOS Leidos Q2 2023 Earnings Conference Call | Making the world safer, healthier, and more efficient 9
Slide 10: Organic Growth
ORGANIC GROWTH (in millions, except growth rates) Q2 FY23 Q2 FY22 % Change Defense Solutions Revenues, as reported $ 2,187 $ 2,052 7% Acquisition revenues(1) 28 — Organic revenues $ 2,159 $ 2,052 5% Civil Revenues, as reported $ 902 $ 857 5% Health Revenues, as reported $ 749 $ 688 9% Total Operatio
Slide 11: Non-GAAP Income Metrics
NON-GAAP INCOME METRICS Three Months Ended June 30, 2023 Three Months Ended July 1, 2022 Acquisition, Acquisition, integration integration and Amortization and Amortization Asset restructuring of acquired Non-GAAP restructuring of acquired impairment Non-GAAP (in millions, except per share amounts)
Slide 12: Segment Non-GAAP Operating Income
SEGMENT NON-GAAP OPERATING INCOME Three Months Ended June 30, 2023 Acquisition, integration and Amortization of Non-GAAP Non-GAAP Operating restructuring acquired operating operating (in millions) income (loss) costs intangibles income (loss) margin(1) Defense Solutions $ 175 $ — $ 29 $ 204 9.3 % Ci
Slide 13: Non-GAAP Free Cash Flow
NON-GAAP FREE CASH FLOW Three Months Ended (in millions, except conversion ratio) June 30, 2023 July 1, 2022 Net cash provided by operating activities(1) $ 164 $ 45 Payments for property, equipment and software (40) (21) Non-GAAP free cash flow $ 124 $ 24 Net income attributable to Leidos common sto