Leidos Holdings, Inc. (LDOS): Business Model Canvas [Dec-2025 Updated]

You're digging into how a major defense contractor like Leidos Holdings, Inc. actually makes its money, especially now that they're guiding for $17.00 billion to $17.25 billion in revenue for 2025. Honestly, understanding their Business Model Canvas is key to seeing how they manage that massive $47.7 billion contract backlog and keep those deep, mission-critical relationships with the U.S. government humming along. We'll break down exactly where their 47,000 employees are focused-from developing proprietary AI capabilities to delivering secure, mission-essential solutions-all under that NorthStar 2030 strategy, so you can see the engine driving their performance.

Leidos Holdings, Inc. (LDOS) - Canvas Business Model: Key Partnerships

You're looking at how Leidos Holdings, Inc. builds out its value by relying on a strong network of external players. Honestly, for a company this size, partnerships aren't just helpful; they're mission-critical, especially when dealing with government and complex technology integration.

The Key Partnerships block of the Business Model Canvas for Leidos Holdings, Inc. shows a clear strategy: pair deep internal expertise with specialized external capabilities across defense, civil, and commercial sectors. This lets Leidos take on massive, multi-domain contracts, like the work supporting the U.S. government.

For instance, Leidos Holdings, Inc. reported annual revenues of approximately $16.7 billion for the fiscal year ended January 3, 2025, a significant portion of which is underpinned by these strategic alliances and access to large government vehicles.

Here's a breakdown of the most significant relationships:

• Multi-national defense firms (Thales, Leonardo) for NATO cloud modernization. This collaboration is centered on the IT Modernization Recovery Increment 1 Systems Integration contract, awarded by the NATO Communications and Information Agency (NCIA).
• Technology partners like Quadridox for enhanced security screening systems. This involves integrating Leidos' Examiner 3DX CT with Quadridox's DELPHI XRDI technology for next-generation checked baggage screening.
• Commercial space ventures, such as Starlab, for assembly and integration. Leidos was selected to lead the U.S.-based assembly, integration, and testing (AI&T) activities for the Starlab commercial space station.
• U.S. government agencies for long-term, mission-critical subcontracts. These relationships are often facilitated through large, multi-award contract vehicles.
• Hawai'i Public Utilities Commission for energy rebate program administration. Leidos continues its long-standing role as the administrator for the Hawai'i Energy program.

The sheer scale of the government work is best seen when you look at the contract vehicles Leidos Holdings, Inc. utilizes, which are essentially pre-negotiated partnership frameworks with the government. You can see the magnitude of access these partnerships provide.

When you look at the specific task orders and contracts that flow from these broader government vehicles, the financial impact becomes concrete. These aren't just potential deals; they are booked work that drives the top line.

Here are some examples of recent, mission-critical subcontracts flowing from these agency relationships:

• FBI Biometric Repository Modernization Task Order: $128 million.
• Navy Operational Readiness Research Support Services (5-year IDIQ): $105.5 million.
• Army ITES-3S Contract: Leidos is one of only 6 companies holding all 10 pools.

The partnership with Starlab is a good example of how Leidos Holdings, Inc. leverages its decades of civil space experience into new commercial markets, supporting the development of an AI-enabled commercial space station.

To be fair, the success of these partnerships relies on Leidos Holdings, Inc.'s ability to manage the integration complexity, such as ensuring compatibility and verifying performance for Starlab's components in Alabama facilities.

Finance: draft 13-week cash view by Friday.

Leidos Holdings, Inc. (LDOS) - Canvas Business Model: Key Activities

You're looking at how Leidos Holdings, Inc. actually generates its revenue through its core operations as of late 2025. It's a mix of heavy integration work and proprietary tech development, all aimed squarely at the government sector.

Systems integration and complex program management for government.

This is the bread and butter. Leidos Holdings, Inc. secures massive, multi-year contracts to manage and integrate complex systems for defense and intelligence agencies. For example, they secured a $390 million ceiling value contract with the National Security Agency (NSA) for signals intelligence (SIGINT) capabilities, engineering, analysis, and reporting tools. Also, they won a $205 million contract to modernize IT systems for the Defense Threat Reduction Agency (DTRA) over five years. The company's total backlog as of October 3, 2025, stood at $47.7 billion, showing the scale of their ongoing program management commitments.

Developing proprietary AI/cyber capabilities (e.g., Kudu Dynamics acquisition).

Leidos Holdings, Inc. is actively building out its offensive cyber muscle. They finalized the acquisition of Kudu Dynamics for approximately $300 million in an all-cash deal. Management noted that this acquisition moves them about 18 months forward in developing certain sub-elements of AI-enabled offensive cyber capabilities compared to organic investment alone. Furthermore, the Kudu acquisition immediately added $400 million in pipeline opportunities, increasing win probability on other near-term submissions. This aligns with the NorthStar 2030 strategy, prioritizing cyber investment.

Engineering and manufacturing of defense and security hardware (e.g., air defense).

While services dominate, the Defense Systems segment shows tangible product activity. This segment saw revenues rise by 11% year-over-year in Q3 FY25. Key activities here include work on systems like the Indirect Fires Protection Capability Increment 2 system and radar surveillance systems. The company also secured a $350 million Air Force Electronic Warfare Mission Support IDIQ subcontract, demonstrating its role in modernizing military capabilities.

IT modernization, cloud migration, and digital transformation services.

This activity is a major driver, particularly within the National Security & Digital segment, which saw revenues increase 8% year-over-year in Q3 2025. Beyond the DTRA contract, Leidos Holdings, Inc. secured an $87 million NATO IT modernization contract and a $128 million FBI biometric modernization task order. The focus is on shifting customers to modern, secure environments, such as supporting the DTRA's move to a zero trust cybersecurity model.

Research and development (R&D) in the five NorthStar 2030 growth pillars.

Leidos Holdings, Inc. is investing in its future growth pillars: space and maritime, energy infrastructure, digital modernization and cyber, mission software, and managed health services. The company's R&D expenses peaked in January 2025 at $150 million for the latest twelve months, a steady increase from its 5-year low of $73 million in 2021. A concrete example of R&D payoff is the proprietary AI-powered Skywire platform in the energy segment, which has optimized approximately 18,000 projects for 25 major utilities, routinely cutting project costs by 30%.

Here's a quick look at some of the contract activity driving these key functions:

The overall momentum is clear from the booking rates. The company achieved a book-to-bill ratio of 1.3 for Q3 2025, securing $5.9 billion in net bookings during that quarter.

The core operational outputs supporting the business model include:

• Delivering solutions across the five NorthStar 2030 growth pillars.
• Achieving a Q3 FY25 Adjusted EBITDA margin of 13.8%.
• Generating $711 million in Cash Flows from Operations in Q3 2025.
• Maintaining a total backlog of $47.7 billion as of October 3, 2025.
• Reporting $4.47 billion in record revenue for Q3 FY25.

Finance: draft 13-week cash view by Friday.

Leidos Holdings, Inc. (LDOS) - Canvas Business Model: Key Resources

You're looking at the core assets Leidos Holdings, Inc. (LDOS) relies on to execute its complex, mission-critical work for government and commercial clients. These aren't just line items on a balance sheet; they are the engines of their revenue generation.

The human capital is substantial. Leidos Holdings, Inc. (LDOS) maintains approximately 47,000 global employees, a significant portion of which is a highly technical workforce necessary for advanced engineering and IT services. This scale is a key barrier to entry for competitors.

The financial commitment from customers is locked in via the contract pipeline. As of October 3, 2025, the total contract backlog stood at $47.7 billion. Of that total, the immediately visible revenue is the funded portion, which was $9.1 billion at that same date.

Intellectual property and proprietary platforms are increasingly vital. The Skywire AI platform, for instance, is a key resource in the commercial energy sector. This technology automates distribution system design and compliance checks. Based on 2023 case studies, Skywire demonstrated the ability to reduce distribution design labor by 70% and overall project costs by 30%. In 2023 alone, it accelerated the delivery of engineering deliverables for 200,000 poles across major utilities.

The access to and incumbency on major government vehicles are irreplaceable resources. These vehicles allow Leidos Holdings, Inc. (LDOS) to quickly bid on and win subsequent task orders without lengthy initial procurement cycles. Here's a look at some of the quantifiable contract assets:

Leidos Holdings, Inc. (LDOS) maintains a portfolio of key contract vehicles that serve as essential conduits to federal spending. These are not just contracts; they are established pathways. For example, the GSM-O II contract has a ceiling value of $6.5 billion and supports the daily operation and sustainment of the Defense Information Systems Agency (DISA)'s networks, connecting more than three million end users at over 3,000 sites globally. Also notable is the Army ITES-3S contract, with a period of performance running through September 25, 2027.

The physical and security infrastructure is another non-negotiable asset base. This includes specialized facilities required to handle sensitive defense and intelligence work. The ability to operate in this space is evidenced by the ongoing support for customers in classified environments, such as the AI-powered software development solutions provided to those operating in classified settings. This capability requires:

• Specialized, secure physical locations.
• Personnel holding requisite security clearances.
• Frameworks like the Framework for AI Resilience and Security (FAIRS) to maintain trust.

Finance: draft 13-week cash view by Friday.

Leidos Holdings, Inc. (LDOS) - Canvas Business Model: Value Propositions

Delivering secure, mission-essential solutions to national security clients.

Leidos Holdings, Inc. maintains a substantial commitment to national security work, evidenced by its financial structure as of late 2025.

• Total Backlog value reached $47.7 billion as of 3 October 2025.
• The National Security & Digital segment held a backlog of $26.4 billion of the total backlog.
• The company secured a single-award contract with the National Security Agency (NSA) with a ceiling value of $390 million in April 2025.
• The company supports vital missions for government and commercial customers with 48,000 global employees.

Accelerating digital modernization and lowering customer costs.

The value proposition includes modernizing critical infrastructure to improve speed and agility for defense customers.

• Leidos secured a U.S. Army contract potentially worth $331 million to support the service branch's network modernization initiative, aligning with the Army Unified Network Plan.
• The company won a 5-year, $35 million contract in June 2025 to modernize the Defense Information Systems Agency's (DISA) data-sharing platform.
• Leidos Holdings, Inc. reaffirmed its fiscal year 2025 revenue guidance to be between $17.00 billion and $17.25 billion.

Providing highly customized critical mission software and systems.

The company delivers tailored technology, such as resilient communications that operate through interruption to keep critical mission data flowing.

Proven track record of on-time, on-cost delivery for large federal programs.

The ability to execute large, long-term programs is a core value proposition, supported by strong new business capture.

• Leidos secured an 8-year period of performance follow-on contract with the Transportation Security Administration (TSA) valued up to $2.6 billion in January 2025.
• The company achieved a book-to-bill ratio of 1.3 in the third quarter of fiscal year 2025.
• Q3 2025 Non-GAAP Diluted EPS was $3.05, beating the consensus estimate by 16.9%.

Expertise in complex, multi-domain challenges (Space, Maritime, Cyber).

The company's segment performance reflects deep involvement across various defense domains.

• The Defence Systems segment revenues rose by 11% to $582 million in Q3 FY25, driven by integrated air defence systems and radar surveillance systems.
• The National Security & Digital segment saw revenues improve by 8% year-over-year in Q3 2025.
• The NSA contract leverages expertise in signals intelligence (SIGINT) capabilities, which involves technologies like radar and sensors.

Leidos Holdings, Inc. (LDOS) - Canvas Business Model: Customer Relationships

You're looking at how Leidos Holdings, Inc. locks in its business, and honestly, it's all about embedding deep within the government's mission structure. This isn't transactional selling; it's about becoming indispensable to agencies like the Department of Defense (DoD) and the U.S. Intelligence Community.

Deep, long-term, embedded relationships with key government clients.

The core relationship is with the U.S. Federal Government, which accounted for 87% of Leidos Holdings, Inc.'s revenues for the fiscal year ended January 3, 2025. This reliance on the public sector means relationships are built on trust and continuity, not just the last bid. You see this longevity clearly in programs like the Hawai'i Energy initiative, which Leidos Holdings, Inc. has administered since 2009. Just recently, on December 4, 2025, they secured a new three-year, $127 million contract renewal to continue that work. To date, that single state-level program has delivered over $7 billion in statewide energy savings. This shows you the embedded nature of their service delivery.

The customer base is highly concentrated in mission-critical areas. Key clients include the DoD, the U.S. Intelligence Community, the Department of Homeland Security (DHS), the Transportation Security Administration (TSA), and U.S. Customs & Border Protection (CBP). The company supports these relationships with a global workforce of 47,000 employees as of late 2025.

Dedicated program teams focused on mission success and outcome-based contracting.

Leidos Holdings, Inc. structures its teams around specific customer outcomes, which is critical when dealing with multi-year, high-stakes work. The sheer size of their committed work demonstrates this focus. As of the third quarter of fiscal year 2025, the total contract backlog stood at $47.7 billion, up from $46.3 billion at the end of the first quarter of fiscal year 2025. This backlog visibility helps keep those dedicated teams funded and focused on execution. For instance, in the most recent program year for the Hawai'i Energy program, the team was responsible for distributing over 18,000 rebates totaling approximately $20 million.

The financial structure of the business reflects where these relationships are strongest. Here's a look at the revenue breakdown by segment for fiscal year 2024, which shows where the majority of relationship value lies:

High-touch, consultative sales for large, complex, multi-year contracts.

Securing that $47.7 billion backlog requires more than just a standard sales pitch; it demands deep consultation on complex, multi-year requirements. The company's projected revenue for the full fiscal year 2025 is between $17.00 billion and $17.25 billion, up from $16.7 billion in fiscal year 2024. These large contract vehicles, often Indefinite Delivery/Indefinite Quantity (IDIQ) contracts, are the result of consultative engagement where Leidos Holdings, Inc. helps define the solution before the final task order is even awarded. You see this consultative approach in recent wins supporting AI-driven cybersecurity and biometric modernization for agencies like the FBI.

Continuous investment in innovation to meet evolving customer needs.

The relationships are sustained by proving future capability, not just past performance. Leidos Holdings, Inc. is aligning its NorthStar 2030 Strategy directly to evolving customer priorities like grid modernization and electronic warfare. The third quarter of fiscal year 2025 saw record revenues of $4.5 billion, a 7% year-over-year increase, driven by demand for innovative products supporting defense and national security missions. This innovation is what keeps the relationship sticky; you can't easily replace a partner who is already building the next-generation system.

Strategic localization and tailored offerings for international markets.

While the U.S. government is the primary customer, international relationships are a strategic growth area. Sales to customers in international markets represented approximately 8% of total revenues for fiscal 2024. The Commercial & International segment generated $2.25 billion in revenue for fiscal year 2024, up 6% year-over-year. This segment serves foreign governments, including agencies in the United Kingdom and Australia, requiring tailored offerings that respect local operational and regulatory environments. For example, recent contract activity included an $87 million NATO IT modernization contract, which required specific international alignment.

Leidos Holdings, Inc. (LDOS) - Canvas Business Model: Channels

Direct bidding and procurement via federal government contract vehicles form a core channel for Leidos Holdings, Inc. The company holds many of the largest and most important government-wide acquisition, indefinite delivery and quantity (IDIQ), and customer-specific task order contract vehicles. Leidos is one of only 6 companies holding all 10 pools of the OASIS+ Multi-Agency Contract (MAC), a Government-wide IDIQ program for services. The total backlog stood at $47.66 billion as of the end of the third quarter of 2025, reflecting success through these vehicles. A notable example of direct procurement is the five-year, $4.1 billion IDIQ contract awarded by the U.S. Army for the Indirect Fires Protection Capability (IFPC) Increment 2 Program. Furthermore, the new GSA MAS contract, number 47QTCA25D008B, has a Base Period running from April 11, 2025 - April 10, 2030.

Subcontracting to major defense and aerospace prime contractors is another established route to market. This channel allows Leidos Holdings, Inc. to integrate its specialized technology and engineering solutions into larger prime contracts, supporting mission execution for government customers. The company supports this through its 47,000 global employees who execute work across numerous prime and subcontracting arrangements.

For commercial and international security and energy clients, Leidos Holdings, Inc. deploys a direct sales force. This channel targets non-federal government business, which is reported under the Commercial & International segment. The revenue generated through this channel in the third quarter of 2025 was $571 million. This segment's performance is tied to specific areas like security products and Energy Infrastructure engineering services.

Field service and on-site support teams are critical for delivering and maintaining deployed systems, particularly within the Defense Systems segment. This channel ensures mission readiness and system efficacy for defense customers. The Defense Systems segment reported revenues of $582 million in the third quarter of 2025, indicating significant activity requiring direct, on-site engagement.

Government-to-government sales channels, which include Foreign Military Sales (FMS), are captured within the international component of the Commercial & International segment. This channel supports allied nations, often through U.S. government procurement mechanisms. The overall expected full-year 2025 revenue guidance for Leidos Holdings, Inc. is between $17.00 billion and $17.25 billion.

You can see a snapshot of the revenue distribution across Leidos Holdings, Inc.'s primary reporting segments for Q3 2025, which directly reflects the output from these various channels:

The company's reliance on established government contracting pathways is further evidenced by the types of contracts it manages:

• Governmentwide Multiple Agency Contracts (MACs) and IDIQs.
• GSA Schedules, including the new MAS contract 47QTCA25D008B.
• Agency Specific IDIQs, such as the $4.1 billion IFPC Increment 2 contract.
• Support for C4ISR and knowledge-based professional engineering services.

Leidos Holdings, Inc. (LDOS) - Canvas Business Model: Customer Segments

You're looking at the core of Leidos Holdings, Inc.'s business, which is deeply rooted in serving the U.S. public sector. Honestly, the numbers clearly show where the bulk of their work lies.

U.S. Federal Government (Defense, Intelligence, Civil, Health) is the primary customer base. This is evident in the backlog figures reported as of October 3, 2025. The total backlog stood at $47.7 billion, with $9.1 billion funded. The National Security & Digital segment, which heavily services Defense and Intelligence, held a backlog of $26.4 billion. The Defence Systems segment added another $5.35 billion to the backlog. Leidos Holdings, Inc. reported annual revenues of approximately $16.7 billion for the fiscal year ended January 3, 2025. For the third quarter of fiscal year 2025, revenues hit a record $4.47 billion, up 7% year-over-year, driven by demand for national security and defense missions.

The customer base is further segmented operationally, which gives you a clearer picture of where the work is:

• National Security & Digital segment revenue increased 8% in Q3 FY25.
• Defence Systems segment revenue increased 11% in Q3 FY25.
• Health & Civil segment revenue grew by 6% in Q3 FY25.

Leidos Holdings, Inc. explicitly serves government and commercial customers. The focus areas mentioned by the CEO align with the Civil and Health components of the federal market, including veteran services.

For State and local governments, the work is less explicitly detailed in top-line revenue splits, but specific programs are noted. For example, Leidos continues as the program administrator for Hawai'i Energy.

International government and defense organizations form a smaller, yet important, part of the customer set. The company's work aligns with national priorities, and competitors have benefited from the global rise in defense spending amid geopolitical events.

Commercial clients are served in specific sectors. Leidos is known for providing services that include aspects relevant to commercial infrastructure and security, such as air traffic control modernization. The company also completed the acquisition of Kudu Dynamics for $291 million in Q2 2025, enhancing capabilities for defense and intelligence customers.

The managed health services programs directly address the needs of veterans and military families, as highlighted by the mention of veteran services as a key priority.

Here is a summary of the key financial scale points relevant to understanding the customer commitment:

The company's total employee count was cited around 47,000 global employees.

Leidos Holdings, Inc. (LDOS) - Canvas Business Model: Cost Structure

You're looking at the major drains on Leidos Holdings, Inc.'s operating cash flow as of late 2025. For a company with record revenues of $4.5 billion in the third quarter of 2025 alone, managing these costs is key to hitting the raised full-year revenue guidance of $17.00 - $17.25 billion.

Labor costs for 48,000 global employees in fiscal year 2025 are the defintely largest component of the cost structure. This massive workforce supports the complex, long-term contracts across defense, intelligence, and civil markets. To put this in perspective against revenue, if we look at the trailing twelve-month revenue of $17.3B as of September 30, 2025, personnel costs will consume the largest share of that top line.

Significant R&D and growth investment spending is channeled to support the NorthStar 2030 strategy. This investment isn't just abstract; it shows up in concrete actions like the $300 million all-cash acquisition of cyber firm Kudu Dynamics in May 2025. This M&A activity is designed to accelerate focus areas like Digital Modernization and Cyber, which are core to the strategy. The company is strategically deploying capital to grow shareholder value, as noted when reporting record margins.

Material and production costs for Defense Systems hardware form another necessary cost bucket. While specific material costs aren't broken out, the segment's activity level gives us a proxy; Defense Systems revenues grew 11% year-over-year in Q3 2025, indicating increased procurement and production activity.

Interest expense is tied directly to the balance sheet structure. As of October 3, 2025, Leidos Holdings had $4.7 billion of debt, which is the base upon which interest expense is calculated. The company actively manages this, executing term loan principal payments of $450 million during the third quarter of 2025 alone.

General and administrative (G&A) overhead is required for managing the complexity of a $47.7 billion total backlog. This overhead covers corporate functions, compliance, and the infrastructure needed to oversee numerous mission-critical programs for government customers.

Here's a look at some key financial metrics that frame the cost environment:

The cost structure is heavily weighted toward human capital, but strategic capital deployment is also a significant factor:

• Investments guided by NorthStar 2030 pillars: Space and Maritime, Energy Infrastructure, Digital Modernization and Cyber, Mission Software, and Managed Health Services.
• The company is focused on lowering costs and increasing efficiency for government customers.
• Strong cash conversion supports these outlays, with Cash Flows from Operations at $711 million in Q3 2025.

Finance: draft 13-week cash view by Friday.

Leidos Holdings, Inc. (LDOS) - Canvas Business Model: Revenue Streams

You're looking at how Leidos Holdings, Inc. brings in its money, which is heavily weighted toward the U.S. Federal Government. Honestly, this is where the bulk of the revenue comes from.

Government service contracts form the bedrock. For the fiscal year ended January 3, 2025, Leidos Holdings, Inc. generated 87% of its revenues from contracts with the U.S. government, either as a prime contractor or a subcontractor. The U.S. government customers use several contracting methods to procure services and products, which Leidos Holdings, Inc. engages in across its portfolio.

Here's a breakdown of the contract types Leidos Holdings, Inc. utilizes for government service delivery:

The revenue mix is further segmented by customer type, with approximately 8% of revenues generated by entities located outside the United States for fiscal 2024.

Product sales from security systems and defense hardware contribute to the Commercial and International business segment. For fiscal year 2024, this segment's revenue growth was driven by increased deliveries of security products and higher volumes in commercial energy and airborne solutions.

Looking at the near-term financial expectations, Leidos Holdings, Inc. reaffirmed its full-year 2025 outlook following strong Q3 performance:

• Full-year 2025 revenue guidance is set at $17.00 billion to $17.25 billion.
• Non-GAAP diluted EPS is projected to be $11.45 to $11.75 for FY 2025.
• Cash flow from operating activities is expected to be approximately $1.65 billion in 2025.

To give you a sense of current operational strength underpinning this guidance, Leidos Holdings, Inc. reported third quarter of 2025 results:

• Revenues reached $4.469 billion, up 7% year-over-year.
• Adjusted EBITDA (non-GAAP) was $616 million, representing a margin of 13.8%.
• Non-GAAP diluted EPS for the quarter was $3.05, up 4% year-over-year.
• Cash Flows from Operations for the quarter totaled $711 million.

The company also reported a strong development pipeline, with funded backlog at the end of the third quarter of 2025 reaching $9.1 billion, supported by a book-to-bill ratio of 1.3x for the quarter.

Here is a summary of the key forward-looking financial metrics for the full fiscal year 2025:

The Defense Systems segment showed strong growth in Q3 2025, with revenues increasing 11% year-over-year.

Finance: draft 13-week cash view by Friday.