Leidos announced it will serve as the primary assembly, integration, and testing (AI&T) provider for Starlab Space’s U.S. commercial space station, positioning the company at the center of the station’s development from component assembly to environmental and performance testing in Alabama.
The partnership brings Leidos into a consortium that includes Voyager Technologies, Airbus, Mitsubishi Corporation, MDA Space, Palantir Technologies, Space Applications Services, Northrop Grumman, and Ohio State University. The collaboration aligns with Leidos’ NorthStar 2030 strategy, especially its space and maritime pillar, and is expected to generate significant revenue streams and open doors to future NASA and commercial contracts.
Leidos also reported Q3 2025 earnings on the same day. Adjusted EPS rose to $3.05, beating the consensus estimate of $2.61 by 16.9%. Revenue climbed to $4.47 billion, surpassing the $4.27 billion estimate by 4.8%. The EPS beat was driven by disciplined cost management and a favorable mix of defense and managed health services contracts, while the revenue gain reflected strong demand across all customer segments, particularly in defense systems.
Year‑over‑year, Q3 2025 revenue increased 6.7% from $4.19 billion in Q3 2024, and adjusted EPS grew 4.1% from $2.93. Adjusted EBITDA margin contracted slightly to 13.8% from 14.2% in the prior year, largely due to a $24 million increase in legal reserves. Management attributed the margin compression to one‑time legal reserve charges while maintaining overall profitability.
In response to the strong results, Leidos raised its full‑year 2025 adjusted EPS guidance to $11.45–$11.75, up from $11.15–$11.45, and reaffirmed revenue guidance at $17.0–$17.25 billion. The guidance increase signals management’s confidence in sustained demand and effective cost control, even as the company invests in high‑return verticals such as space and maritime.
Analysts noted that the earnings beat and guidance raise were key drivers of the positive market reaction, with the company’s performance exceeding expectations across both earnings and revenue. The Starlab partnership, while forward‑looking, is seen as a strategic win that complements Leidos’ existing defense and space capabilities and positions the firm for future growth in the commercial space station market.
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