RESTON, Va. - Leidos (NYSE:LDOS), a Fortune 500® innovation company, has been awarded a significant contract to modernize the Organ Procurement and Transplant Network (LON:NETW) (OPTN). The U.S. Department of Health and Human Services, through its Health Resources and Services Administration (HRSA), granted the contract, which could be worth up to $235 million. It includes a base period of one year with the possibility of four additional one-year option periods.
The OPTN plays a crucial role in managing organ transplant data, which is essential for patients awaiting transplants, as well as donors and healthcare providers. The network currently supports over 100,000 people on the national organ transplant waitlist. Liz Porter, Leidos Health & Civil Sector president, emphasized the importance of timely and accurate data for facilitating life-saving transplants, stating that the modernization effort will enhance access to information and provide advanced tools for decision-making.
Leidos will compete with other vendors for tasks aimed at increasing the transparency, performance, governance, and efficiency of the organ donation and transplantation process. The company is well-equipped for this role, with significant experience in technology, health systems, and electronic health record implementations.
This initiative is described as the most substantial reform of the OPTN in nearly four decades, with the goal of improving health outcomes and better serving patients and their families. Leidos, headquartered in Reston, Virginia, reported annual revenues of approximately $15.4 billion for the fiscal year ending December 29, 2023. The company employs a global workforce of 48,000 and specializes in providing technology solutions in national security and health for heavily regulated industries.
The information in this article is based on a press release statement from Leidos Holdings (NYSE:LDOS), Inc.
In other recent news, Leidos Holdings, Inc. reported robust financial performance in Q3 2024, marking its sixth consecutive quarter of growth. The company posted a record adjusted EBITDA margin of 14.2% and a 44% increase in adjusted diluted EPS. Leidos also reported a significant free cash flow conversion rate of 159% and is nearing its $500 million share repurchase target for the year.
The company's revenue for the third quarter was $4.19 billion, a 7% increase from the previous year. Furthermore, Leidos raised its 2024 revenue guidance to between $16.35 billion and $16.45 billion and adjusted EBITDA guidance to the high 12% range.
In terms of recent developments, the company announced a quarterly dividend increase to $0.40 per share, effective for shareholders on record. Additionally, Leidos secured $8.1 billion in net bookings, resulting in a total backlog of $40.6 billion.
While the National Security and Digital segment faces challenges, the Health & Civil segment is performing strongly, particularly in managed health services. The Defense Systems segment also benefited from the IFPC Enduring Shield program and expects growth from new programs like small glide munitions and Black Arrow.
InvestingPro Insights
Leidos' recent contract win aligns well with its strong market position and financial performance. According to InvestingPro data, Leidos boasts a market capitalization of $24.42 billion, reflecting its significant presence in the Professional Services industry. The company's revenue for the last twelve months as of Q3 2024 stood at $16.28 billion, with a healthy revenue growth of 7.4% over the same period.
This growth trajectory is further supported by InvestingPro Tips, which indicate that Leidos' net income is expected to grow this year. Additionally, seven analysts have revised their earnings upwards for the upcoming period, suggesting positive market sentiment towards the company's future performance.
The contract to modernize the Organ Procurement and Transplant Network, potentially worth up to $235 million, is likely to contribute to Leidos' already impressive financial metrics. The company's operating income margin of 10.83% for the last twelve months as of Q3 2024 demonstrates its ability to efficiently convert revenue into profit, a crucial factor for long-term success in government contracting.
Investors have taken notice of Leidos' strong performance, as evidenced by the stock's significant return over the last week and its trading near its 52-week high. The company's stock price has shown a remarkable 89.56% total return over the past year, indicating strong investor confidence in Leidos' business model and growth prospects.
It's worth noting that Leidos has maintained dividend payments for 13 consecutive years and has raised its dividend for 6 consecutive years, showcasing its commitment to shareholder returns. This, combined with the company's moderate debt levels, suggests a balanced approach to financial management and growth.
For investors seeking more comprehensive insights, InvestingPro offers 18 additional tips on Leidos, providing a deeper understanding of the company's financial health and market position.
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