Leidos Holdings, Inc., a science and technology company, provides technology and engineering solutions in the defense, intelligence, homeland security, civil, and health markets in the United States and internationally. The company operates through National Security Solutions (NSS), Information Systems & Global Solutions (IS&GS), and Health and Infrastructure (HIS) segments. The NSS segment offers national security solutions and systems for air, land, sea, space, and cyberspace for the U.S. intelligence community, the U.S. Department of Defense (DoD), military services, the U.S. Department of Homeland Security, and government agencies of U.S. allies abroad, as well as other federal, civilian, and commercial customers in the national security industry. Its solutions offer technology, intelligence systems, command and control, data analytics, logistics, cybersecurity, and intelligence analysis and operations support services to critical missions. The IS&GS segment provides information technology (IT), management and engineering services to civil, defense, and intelligence agencies of the U.S. Government; and data analytics, systems engineering, agile software development, network-enabled situational awareness, communications, command and control, and systems integration solutions. The HIS segment offers electronic health record (EHR) systems, as well as IT, scientific support, and behavior health services; implements and optimizes EHR systems at commercial hospitals; and provides life science research and development support services. This segment also provides security products, services, and solutions; power grid engineering services and solutions; federal environmental and engineering services; and transaction and asset valuation services for the power industry. Leidos Holdings, Inc. was founded in 1969 and is headquartered in Reston, Virginia.
Business Analysis of Leidos
The Technology Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how Leidos compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by Leidos to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.
Here is the performance snapshot of Leidos with an interactive chart.
- Revenue Growth: Leidos reported a revenue growth of 49.5% year-on-year during 2016. IT Consulting and Outsourcing Services Industry grew at -0.6% in the same period
- COGS share of Revenues: As a percentage of revenue, Leidos spent 87.9% of its total revenues on COGS. IT Consulting and Outsourcing Services industry average (COGS share of revenue) in the same period was 65.9%
- R&D share of Revenues: Leidos R&D share of Revenues details are not available because either company does not share the data or we do not have it
- SG&A share of Revenues: As a percentage of revenue, Leidos spent 4.7% of its total revenues on Sales, Marketing, and General Administration (SG&A). IT Consulting and Outsourcing Services industry average SG&A spending in the same period was 19.0%
- Inventory share of Revenues: As a percentage of revenue, Leidos spent 4.9% of its total revenues on Inventories. IT Consulting and Outsourcing Services industry average Inventory spending in the same period was 1.8%
- Accounts Payable share of Revenues: As a percentage of revenue, Leidos invested 20.6% of its total revenues on Accounts Payable (A/P) IT Consulting and Outsourcing Services industry average Accounts Payable investment in the same period was 7.9%
- Accounts Receivable share of Revenues: As a percentage of revenue, Leidos invested 23.5% of its total revenues on Accounts Receivable (A/R). IT Consulting and Outsourcing Services industry average Accounts Receivable investment in the same period was 33.6%
- PP&E share of Revenues: As a percentage of revenue, Leidos invested 3.7% of its total revenues on Property, Plants, and Equipments (PP&E). IT Consulting and Outsourcing Services industry average PPE investment in the same period was 11.5%
- Intangibles share of Revenues: As a percentage of revenue, Leidos invested 88.2% of its total revenues on Intangibles. IT Consulting and Outsourcing Services industry average Intangibles investment in the same period was 38.5%
- Net Margins: Leidos Net Margins in the year 2016 were 3.5%. IT Consulting and Outsourcing Services industry average Net Margins in the same period were 8.5%
Sector and Industry Association of Leidos
For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries.
Leidos is associated with Technology Sector and IT Consulting and Outsourcing Services Industry.
Technology sector is comprised of the following industries: Computers Systems and Peripherals; Software; Semiconductor; IT Consulting and Outsourcing Services; Networking Equipment and Services; Internet; Other. The definitions for each of the industries is as follows:
- Computers Systems and Peripherals industry includes companies primarily engaged in manufacturing of personal computers, servers, mainframes, workstations, and other computer accessories and peripherals such as storage drives, mice, keyboards and printers. It also includes manufacturers of mobile phones and tablets.
- Software industry includes businesses providing software products such as operating systems, productivity suites, enterprise software, data and analysis software, advertising and marketing software, engineering and manufacturing software, networking software, and IT management software. It also includes companies providing industry-specific software focused on different sectors such as Financials, Automotive, Telecom, Utilities, Travel, Real Estate, Media, and Publishing.
- Semiconductor industry includes companies primarily engaged in manufacturing and distribution of semiconductor products such as microprocessors, chipsets, motherboards, flash memory, and wired and wireless connectivity products. It also includes companies that provide semiconductor equipment and services to the semiconductor industry.
- IT Consulting and Outsourcing Services industry includes companies primarily engaged in providing information technology consulting and outsourcing services to other businesses. The services include IT consulting, systems integration, application development and management, IT infrastructure management, and network operations management.
- Networking Equipment and Services industry includes companies primarily engaged in manufacturing and distribution of networking and communications equipment for transporting data, voice, and video traffic across intranets, extranets, and the Internet. The key products include routers and switches for local and wide-area networks, cable modems, teleconferencing equipment, and wireless access points.
- Internet industry includes Internet-based businesses providing products and services such as search engines, social networking, web hosting, email, domain name registration, and eCommerce. It also includes industry information/services portals focused on different sectors such as Financials, Automotive, Travel, Health, Real Estate, Media, and Publishing.
- Other industry includes companies providing products such as photocopiers, fax machines, point of sale machines, audio/video technologies, and video games. It also includes technology companies that are not part of other six technology industries.
Industry Ranking of Leidos
With $7 billion revenues, Leidos ranked number 7 of all the companies in the US IT Consulting and Outsourcing Services industry. There were a total of 28 public companies in the US IT Consulting and Outsourcing Services industry that had revenues greater than $50 million during 2016.
The top-10 companies in the US IT Consulting and Outsourcing Services industry by revenues during 2016 were:
Business Model Analysis (BMA) Framework
We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.