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    Leidos Holdings Inc (LDOS)

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    Business Description

    Leidos Holdings, Inc. is a Fortune 500 company that specializes in providing innovative technology solutions to address complex issues in the national security and health sectors . With a global workforce of approximately 47,000 to 48,000 employees, Leidos serves a diverse range of customers, including U.S. government agencies such as the Department of Defense, the U.S. Intelligence Community, and NASA, as well as foreign governments and commercial businesses . The company is organized into four reportable segments, focusing on capabilities like digital modernization, cyber operations, and mission software systems .

    1. Defense Systems - Provides advanced systems and services for national security, focusing on mission software systems and integrated systems .
    2. Health & Civil - Delivers healthcare solutions for federal and commercial customers, emphasizing infrastructure modernization and security .
    3. National Security & Digital - Focuses on digital modernization and cyber operations, serving U.S. government agencies and enhancing mission operations .
    4. Commercial & International - Offers IT modernization and security solutions to international customers, including government agencies in the UK and Australia .

    Key Metrics

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    Executive Team

    NamePositionStart DateShort Bio
    Thomas A. BellChief Executive OfficerMay 3, 2023Thomas A. Bell serves as the CEO of Leidos. He joined Leidos in this role on May 3, 2023. Previously, he held leadership positions at Rolls-Royce and Boeing, with a career spanning over four decades in aerospace and defense .
    Christopher R. CageExecutive Vice President and Chief Financial OfficerJuly 2021Christopher R. Cage has been the CFO of Leidos since July 2021. He has been with Leidos for 25 years, holding various roles including Senior Vice President, Chief Accounting Officer, and Corporate Controller .
    Carly E. KimballExecutive Vice President, Chief Performance OfficerJanuary 2024Carly E. Kimball has served as the Chief Performance Officer since January 2024. She was previously the Senior Vice President, Chief Accounting Officer, and Corporate Controller .
    Gerard A. FasanoExecutive Vice President, Chief Growth OfficerJanuary 2024Gerard A. Fasano has been the Chief Growth Officer since January 2024. He was previously President of the Defense Group and has a long history with Leidos .
    Jerald S. Howe, Jr.Executive Vice President and General CounselJuly 2017Jerald S. Howe, Jr. has been the General Counsel since July 2017 and became Corporate Secretary in September 2023. He was previously a partner at Fried, Frank, Harris, Shriver & Jacobson LLP .
    Steve CookPresident for Leidos DyneticsApril 2022Steve Cook has been President for Leidos Dynetics since April 2022. He joined Dynetics in 2009 and has held various roles, including at NASA .
    Elizabeth M. PorterPresident for the Health and Civil SectorJanuary 2024Elizabeth M. Porter has served as President for the Health and Civil Sector since January 2024. She was previously President for the Health Group .
    Roy StevensPresident for the National Security SectorJanuary 2024Roy Stevens has been President for the National Security Sector since January 2024. He was previously President for the Intelligence Group .
    Thomas C. SanglierSenior Vice President and Chief Audit ExecutiveJuly 2022Thomas C. Sanglier has been the Chief Audit Executive since July 2022. He was previously Senior Director of Internal Audit at Raytheon Technologies .
    Maureen WaterstonChief Human Resources OfficerMarch 2022Maureen Waterston has been the Chief Human Resources Officer since March 2022. She previously held similar roles at Pratt & Whitney and United Technologies .
    James F. CarliniChief Technology OfficerJune 2019James F. Carlini has been the CTO since June 2019. He founded a national security consultancy and worked at Northrop Grumman and DARPA .
    M. Victoria SchmanskePresident of the Commercial and International SectorJanuary 2024M. Victoria Schmanske has served as President of the Commercial and International Sector since January 2024. She was previously Executive Vice President of Leidos Corporate Operations .
    Cindy GruensfelderPresident of the Defense System SectorJanuary 2024Cindy Gruensfelder has been President of the Defense System Sector since January 2024. She has extensive experience in the Aerospace and Defense industry, having worked at Boeing .
    Steve HullPresident for the Digital Modernization SectorJanuary 2024Steve Hull has served as President for the Digital Modernization Sector since January 2024. He was previously Executive Vice President and Operations Manager for Enterprise and Cyber Solutions .
    Tina JonasDirector, Member of Audit and Finance CommitteeSeptember 25, 2024Tina Jonas was appointed to the Board of Directors on September 25, 2024. She has extensive expertise in military, defense, and aerospace issues, with a career in the federal government and executive positions in the aerospace and defense industry .

    Questions to Ask Management

    1. With the upcoming recompete of the VA medical exam contract and uncertainty around future RFPs, how are you preparing to mitigate potential impacts on margins and profitability in your healthcare segment?

    2. You've mentioned a war for talent in hiring account managers and solution architects; what specific challenges have you faced in attracting and retaining top talent, and how might this impact your ability to enhance business capture performance?

    3. Despite earlier discussions on portfolio pruning, it appears no part of the business has been identified for divestiture; can you clarify your strategy on portfolio optimization and how you plan to address underperforming assets?

    4. With $26 billion in bids awaiting adjudication and a target book-to-bill ratio slightly above 1, what risks do you foresee in achieving your growth targets, and how confident are you in converting your pipeline into actual wins?

    5. Given the evolving DoD strategies around counter-UAS and your upcoming classified briefing, how is Leidos positioning itself to capitalize on this market, and do you have the necessary technologies to meet emerging needs?

    Share Repurchase Program

    Program DetailsProgram 1
    Approval DateFebruary 2022
    End Date/DurationNot explicitly stated; may be suspended or discontinued at any time
    Total additional amount20 million shares
    Remaining authorization amount9,819,502 shares as of September 27, 2024
    DetailsShares may be repurchased in open market or privately negotiated transactions, including accelerated share repurchase transactions. The program's timing, number, and value of shares repurchased depend on market price, conditions, legal requirements, and compliance with outstanding indebtedness.

    Debt Maturity Schedule

    YearAmount Due (in millions)Debt TypeInterest Rate (%)% of Total Debt
    2025$500Senior unsecured notes3.62510.6% = (500 / 4,700) * 100
    2030$750Senior unsecured notes4.37516.0% = (750 / 4,700) * 100
    2031$1,000Senior unsecured notes2.30021.3% = (1,000 / 4,700) * 100
    2032$250Senior unsecured unregistered notes7.1255.3% = (250 / 4,700) * 100
    2033$750Senior unsecured notes5.75016.0% = (750 / 4,700) * 100
    2033$300Senior unsecured unregistered notes5.5006.4% = (300 / 4,700) * 100
    2040$300Senior unsecured unregistered notes5.9506.4% = (300 / 4,700) * 100

    Competitors

    Competitors mentioned in the company's latest 10K filing.

    • Accenture Federal Systems
    • Amentum Services Inc.
    • BAE Systems
    • Booz Allen Hamilton Inc.
    • CACI International Inc.
    • General Dynamics Corporation
    • IBM
    • Jacobs Engineering Group Inc.
    • KBR Inc.
    • L3Harris
    • Lockheed Martin Corporation
    • ManTech
    • Northrop Grumman Corporation
    • Peraton
    • Raytheon Technologies Corporation
    • SAIC

    These companies span across sectors that include engineering and technical services divisions of large defense contractors, diversified U.S. and international IT providers, and contractors focused solely on technical services, supply chain management, other logistics services, major systems operations and maintenance, homeland security, and health solutions .

    Customer Concentration

    CustomerRelationshipSegmentDetails
    U.S. Government
    Prime contractor and subcontractor
    All
    87% of total 2023 revenue (about $13,400 million)
    DoD & U.S. Intelligence Community
    Mission-critical solutions and services
    All
    49% of total 2023 revenue (about $7,577 million)

    Auditor

    NameStart DateEnd DateReason for Change
    Deloitte & Touche LLPFiscal 2000 PresentCurrent auditor