Leidos Holdings, Inc. · NYSE:LDOS
Leidos — Q3 2023 Earnings Presentation
13 slides from Leidos's earnings presentation, Oct 31, 2023
Slide 1: Leidos Q3 FY23 Earnings Conference Call
Leidos Q3 FY23 Earnings Conference Call OCTOBER 31, 2023
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS Certain statements in this release contain or are based on "forward- our compliance with various U.S. government and other government intellectual property and other proprietary rights by third parties of looking" information within the meaning of the Private Securities pr
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 Q3 – Revenues up 9% YoY – Non-GAAP diluted earnings per share up 28% YoY – Adjusted EBITDA margin of 11.5% – Operating cash flow of $795 million Raising 2023 Guidance for all Metrics Substantial Progress on Performance Improvement Initiatives CULTURE OF ACQUISITION BUSINESS S
Slide 5: Q3 FY23 Results: Income Statement
Q3 FY23 RESULTS: INCOME STATEMENT Revenues Adjusted EBITDA Margin Non-GAAP Diluted EPS $3,921M 11.5% $2.03 $3,608M 10.3% $1.59 Q3 FY22 +8.7% Q3 FY23 Q3 FY22 +120 bps Q3 FY23 Q3 FY22 +27.7% Q3 FY23 LEIDOS Leidos Q3 2023 Earnings Conference Call 5
Slide 6: Q3 FY23 Results: Reportable Segments
Q3 FY23 RESULTS: REPORTABLE SEGMENTS Defense Solutions Civil Health $2,221M $2,075M Revenues $874M $924M $776M $659M Q3 FY22 +7.0% Q3 FY23 Q3 FY22 +5.7% Q3 FY23 Q3 FY22 +17.8% Q3 FY23 Non-GAAP OI Margin 20.4% 15.0% 11.0% 10.4% 8.1% 8.4% Q3 FY22 +30 bps Q3 FY23 Q3 FY22 -60 bps Q3 FY23 Q3 FY22 +540 bp
Slide 7: Q3 FY23 Results: Cash Flow / Balance Sheet
Q3 FY23 RESULTS: CASH FLOW / BALANCE SHEET Cash flow generation due to - Operating cash flow $795M working capital management Cash Flow Generation and strong collections aided - Non-GAAP free cash flow $745M by Government FYE - DSO of 57 days, 2-day improvement sequentially - Total return to shareho
Slide 8: 2023 Guidance
2023 GUIDANCE MEASURE CURRENT PRIOR Raise Guidance on all Metrics – Revenues: +$150M at midpoint Revenues (billions) $15.1 - $15.3 $14.9 - $15.2 – Adjusted EBITDA margin: +30 basis points Adjusted EBITDA Margin 10.5% - 10.7% 10.1% - 10.5% at midpoint Non-GAAP Diluted EPS $6.80 - $7.10 $6.40 - $6.80
Slide 9: Appendix: Non-GAAP Reconciliations
APPENDIX Non-GAAP Reconciliations LEIDOS Leidos Q3 2023 Earnings Conference Call 9
Slide 10: Organic Growth
ORGANIC GROWTH (in millions, except growth rates) Q3 FY23 Q3 FY22 % Change Defense Solutions Revenues, as reported $ 2,221 $ 2,075 7% Acquisition revenues(1) 28 — Organic revenues $ 2,193 $ 2,075 6% Civil Revenues, as reported $ 924 $ 874 6% Health Revenues, as reported $ 776 $ 659 18% Total Operati
Slide 11: Non-GAAP Income Metrics
NON-GAAP INCOME METRICS Three Months Ended September 29, 2023 Three Months Ended September 30, 2022 Acquisition, Acquisition, integration integration and Amortization Asset Goodwill Non- and Amortization Non- As restructuring of acquired impairment impairment GAAP As restructuring of acquired Deriva
Slide 12: Segment Non-GAAP Operating Income
SEGMENT NON-GAAP OPERATING INCOME Three Months Ended September 29, 2023 Acquisition, integration and Amortization of Goodwill Asset Non-GAAP Non-GAAP Operating restructuring acquired impairment impairment operating operating (in millions) income (loss) costs intangibles charges charges income (loss)
Slide 13: Non-GAAP Free Cash Flow
NON-GAAP FREE CASH FLOW Three Months Ended (in millions, except conversion ratio) September 29, September 30, 2023 2022 Net cash provided by operating activities(1) $ 795 $ 729 Payments for property, equipment and software (50) (27) Non-GAAP free cash flow $ 745 $ 702 Net (loss) income attributable