Earnings quality appears inconsistent, as evidenced by the OCF/NI ratio fluctuating from a low of 0.16 in 2025Q1 to a high of 1.94 in 2025Q3, largely driven by volatile working capital swings.
| Metric | TTM | Jan'26 | Jan'25 | Dec'23 | Dec'22 | Dec'21 | Jan'21 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Jan'15 | Jan'14 | Jan'13 | Jan'12 | Jan'11 | Jan'10 | Jan'09 | Jan'08 | Jan'07 | Jan'06 |
|---|
| Cash from Operations | 1.99B | 1.75B | 1.39B | 1.17B | 986M | 1.03B | 1.33B | 992M | 768M | 526M | 446M | 410M | 396M | 195M | 345M | 710M | 714M | 623M | 542M | 342M | 708M | 595M |
| Operating CF Margin % | - | 10.19% | 8.35% | 7.55% | 6.85% | 7.51% | 10.85% | 8.94% | 7.53% | 5.17% | 6.33% | 8.06% | 7.82% | 3.38% | 3.09% | 6.71% | 6.42% | 5.74% | 5.38% | 3.83% | 8.54% | 7.64% |
| Operating CF Growth % | 522.85% | 25.72% | 19.48% | 18.15% | -4.36% | -22.71% | 34.48% | 29.17% | 46.01% | 17.94% | 8.78% | 3.54% | 103.08% | -43.48% | -51.41% | -0.56% | 14.61% | 14.94% | 58.48% | -51.69% | 18.99% | - |
| Net Income | 1.36B | 1.45B | 1.25B | 208M | 693M | 759M | 629M | 670M | 582M | 364M | 246M | 236M | -330M | 84M | 523M | -67M | 569M | 500M | 452M | 415M | 391M | 345M |
| Depreciation & Amortization | 293M | 290M | 290M | 331M | 333M | 325M | 282M | 234M | 257M | 336M | 122M | 44M | 62M | 81M | 113M | 114M | 111M | 93M | 89M | 80M | 72M | 70M |
| Stock-Based Compensation | 99M | 95M | 85M | 77M | 73M | 67M | 62M | 52M | 44M | 43M | 35M | 31M | 42M | 55M | 84M | 84M | 102M | 106M | 94M | 89M | 64M | 0 |
| Deferred Taxes | 385M | 369M | -98M | -109M | -211M | -26M | -4M | 18M | 17M | 57M | 0 | -6M | 56M | -38M | 72M | -9M | -30M | -18M | 4M | -4M | 3M | -42M |
| Other Non-Cash Items | 58M | 28M | 55M | 715M | 66M | -3M | 62M | -91M | 8M | 21M | 4M | 5M | 519M | 152M | -61M | -7M | -4M | -15M | -76M | -72M | 2M | -16M |
| Working Capital Changes | -264M | -480M | -191M | -57M | 32M | -91M | 303M | 109M | -140M | -295M | 39M | 100M | 47M | -139M | -386M | 595M | -34M | -43M | -21M | -166M | 176M | 238M |
| Change in Receivables | 40M | -46M | -220M | -65M | -174M | -5M | -127M | 116M | -58M | -183M | 149M | -32M | 162M | -67M | 325M | -48M | 0 | -94M | 4M | -237M | -72M | 0 |
| Change in Inventory | 0 | 0 | 0 | 135M | 0 | 5M | 127M | -116M | -85M | -76M | -101M | -14M | -12M | 55M | -64M | -93M | -28M | 54M | -112M | -46M | 9M | 0 |
| Change in Payables | -336M | -308M | -160M | 31M | -149M | -212M | 151M | 116M | -46M | 152M | -25M | 101M | -43M | -88M | -744M | 757M | 0 | -32M | 67M | 47M | 36M | 0 |
| Cash from Investing | -2.76B | -421M | -142M | -211M | -313M | -730M | -2.81B | 65M | -114M | -71M | 25M | 82.91M | 80M | 280M | -477M | -37M | -394M | -305M | -259M | -202M | 1.24B | -583M |
| Capital Expenditures | -134M | -125M | -149M | -207M | -129M | -104M | -183M | -121M | -73M | -81M | -29M | -27M | -29M | -53M | -48M | -65M | -74M | -58M | -59M | -61M | -74M | -54M |
| CapEx % of Revenue | 0.77% | 0.73% | 0.89% | 1.34% | 0.9% | 0.76% | 1.49% | 1.09% | 0.72% | 0.8% | 0.41% | 0.53% | 0.57% | 0.92% | 0.43% | 0.61% | 0.67% | 0.53% | 0.59% | 0.68% | 0.89% | 0.69% |
| Acquisitions | -2.64B | -300M | 0 | -6M | -177M | -622M | -2.65B | 84M | -81M | 8M | 48M | 25M | 0 | -3M | -483M | -222M | -382M | -258M | -204M | -145M | -378M | -226M |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | 14M | 4M | 7M | 2M | -7M | -4M | 23M | 102M | 40M | 2M | 6M | 84.91M | 109M | 72M | 54M | 250M | 62M | 11M | 4M | 4M | 29M | 743M |
| Cash from Financing | 374M | -1.13B | -1.08B | -715M | -865M | -113M | 1.45B | -709M | -707M | -429M | -751M | -283M | -463M | -780M | -722M | -449M | 187M | -398M | -427M | -157M | -1.84B | -713M |
| Debt Issued (Net) | 1.2B | -29M | -18M | -302M | -165M | 274M | 1.77B | -80M | -59M | -209M | 413M | -39M | -177M | 348M | -550M | -3M | 739M | -18M | -113M | -10M | -27M | -46M |
| Equity Issued (Net) | -596M | -882M | -851M | -196M | -494M | -226M | -70M | -431M | -424M | -18M | 1M | -112M | -208M | -319M | -22M | -471M | -563M | -474M | -369M | -211M | 619M | -663M |
| Dividends Paid | -213M | -211M | -208M | -201M | -199M | -199M | -196M | -198M | -198M | -198M | -1.14B | -117M | -95M | -477M | -165M | 0 | 0 | 0 | -1M | -2M | -2.44B | 0 |
| Share Repurchases | -659M | -944M | -906M | -246M | -542M | -270M | -105M | -458M | -438M | -31M | -24M | -118M | -215M | -319M | -22M | -471M | -601M | -474M | -445M | -309M | -724M | -818M |
| Other Financing | -19M | -7M | -7M | -16M | -7M | 38M | -52M | 0 | -26M | -4M | -30M | -15M | 17M | -446M | 15M | 25M | 11M | 94M | 56M | 66M | 6M | -4M |
| Net Change in Cash | -509M | 213M | 156M | 245M | -192M | 188M | -30M | 348M | -53M | 26M | -277M | 200M | 25M | -339M | -848M | 230M | 515M | -71M | 941M | -1.11B | 104M | 1.03B |
| Free Cash Flow | 1.67B | 1.63B | 1.24B | 958M | 857M | 927M | 1.15B | 871M | 695M | 445M | 417M | 383M | 367M | 142M | 297M | 645M | 640M | 565M | 483M | 281M | 634M | 541M |
| FCF Margin % | 9.57% | 9.46% | 7.46% | 6.21% | 5.95% | 6.75% | 9.36% | 7.85% | 6.82% | 4.38% | 5.92% | 7.53% | 7.25% | 2.46% | 2.66% | 6.09% | 5.76% | 5.21% | 4.8% | 3.14% | 7.64% | 6.94% |
| FCF Growth % | 19.26% | 30.73% | 29.75% | 11.79% | -7.55% | -19.46% | 32.15% | 25.32% | 56.18% | 6.71% | 8.88% | 4.36% | 158.45% | -52.19% | -53.95% | 0.78% | 13.27% | 16.98% | 71.89% | -55.68% | 17.19% | - |
| FCF per Share | 13.06 | 12.27 | 9.14 | 6.94 | 6.21 | 6.48 | 7.99 | 6.01 | 4.54 | 2.89 | 4.01 | 5.18 | 4.96 | 1.71 | 3.57 | 7.68 | 6.99 | 5.79 | 4.81 | 2.70 | 6.97 | 6.03 |
| FCF Conversion (FCF/Net Income) | 1.23x | 1.20x | 1.11x | 5.85x | 1.44x | 1.37x | 2.12x | 1.49x | 1.32x | 1.44x | 1.83x | 1.61x | -1.23x | 1.19x | 0.66x | 12.03x | 1.16x | 1.25x | 1.20x | 0.82x | 1.81x | 0.64x |
| Interest Paid | -51M | 0 | 226M | 207M | 195M | 182M | 161M | 172M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 0 | 0 | 460M | 435M | 217M | 221M | 140M | 142M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Working Capital Volatility
Based on reported quarterly figures, the OCF/NI ratio for Leidos has fluctuated wildly from a low of 0.16 in 2025Q1 to a high of 1.94 in 2025Q3, suggesting that net income is a poor proxy for the company's actual cash-generating capacity in any given period.
The significant divergence between net income and operating cash flow appears driven by the timing of government contract payments and milestone-based billing. Investors should monitor whether this volatility reflects structural inefficiencies in collections or merely the inherent lumpiness of large-scale federal project accounting.
As reported in financial statements, working capital changes have been a major source of cash flow instability, with a massive $372 million outflow in 2025Q1 followed by a $147 million inflow in 2025Q3, highlighting the sensitivity of cash flow to federal payment cycles.
These dramatic swings suggest that Leidos's cash position is highly vulnerable to the timing of government funding releases and contract closeouts. The reliance on large-scale, multi-year projects means that working capital management remains a primary determinant of short-term liquidity, often overshadowing underlying operational profitability.
According to the provided cash flow data, Leidos maintains a disciplined capital expenditure profile, with CapEx/Revenue ratios consistently hovering between 0.4% and 2.0%, indicating that the business model requires minimal ongoing investment to maintain its existing federal IT infrastructure and service capabilities.
The low capital intensity suggests that the company's primary investment needs are focused on human capital and integration rather than heavy physical assets. This allows for a higher potential conversion of operating cash flow into free cash flow, provided that working capital requirements do not continue to consume excess liquidity.
Based on the cash flow statements, Leidos has consistently prioritized share repurchases and acquisitions, with a notable $2.3 billion acquisition outflow in 2026Q1 and recurring quarterly buybacks, signaling a management strategy that favors inorganic growth and shareholder returns over organic balance sheet deleveraging.
The combination of significant acquisition spending and sustained share buybacks suggests a management team confident in its ability to integrate large assets while maintaining dividend commitments. However, this aggressive deployment strategy warrants further investigation into the long-term sustainability of such outflows if organic growth continues to face cyclical headwinds.
Quick answers to the most common questions about buying LDOS stock.
Leidos Holdings, Inc. (LDOS) generated $1.75B in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Leidos Holdings, Inc. (LDOS) generated $1.63B in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Leidos Holdings, Inc. (LDOS) spent $125.0M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, Leidos Holdings, Inc. (LDOS) returned $211.0M to shareholders via cash dividends and spent $944.0M on share repurchases. This shows the company's commitment to returning capital to its equity investors.