Leidos wins $120 million cybersecurity and cryptographic key management contract

Rhea-AI Summary

Leidos (NYSE: LDOS) has secured a new prime contract worth $120 million from the Naval Information Warfare Center Pacific to provide Key Management Architecture & Engineering and Cyber Security Engineering Support Services to the Department of Defense, Intelligence Community and civilian agencies. The contract includes a one-year base period with four one-year optional extensions.

Under this agreement, Leidos will focus on designing, developing, testing, integrating, and maintaining technologies for key management systems. The company will continue its role in securely designing and deploying electronic cryptographic key material for U.S. and allied national security customers.

Positive

• Secured new prime contract worth $120 million
• Contract includes potential for 4-year extension beyond base year
• Expands presence in critical cybersecurity services for defense sector

Negative

• None.

Insights

Defense Technology Analyst

This $120 million contract win represents a strategic victory for Leidos in the highly competitive defense technology sector. The deal's structure, with a one-year base and four one-year extensions, provides potential long-term revenue stability while strengthening Leidos' foothold in critical national security infrastructure.

Breaking this down for investors: Cryptographic key management is essentially the backbone of secure military communications - think of it as an ultra-sophisticated version of password management for classified government systems. This contract positions Leidos to manage these important security elements across multiple high-profile agencies, including the Department of Defense and Intelligence Community.

The contract's value, while representing less than 1% of Leidos' market cap, carries strategic significance beyond its monetary value. It reinforces Leidos' position as a trusted partner for sensitive government cybersecurity initiatives and could lead to additional contract opportunities in this growing sector. The company's ability to secure this contract amid intense competition from other defense contractors suggests strong competitive advantages in their cybersecurity capabilities.

From a broader market perspective, this contract reflects the government's increasing investment in cybersecurity infrastructure, particularly in modernizing key management systems. For Leidos, maintaining this established relationship with naval intelligence systems could prove valuable as defense budgets continue to prioritize cybersecurity initiatives.

Cybersecurity Specialist

This contract award highlights Leidos' advanced capabilities in one of cybersecurity's most critical domains - cryptographic key management. In the current threat landscape, where state-sponsored cyber attacks are increasingly sophisticated, robust key management systems are fundamental to protecting classified communications and sensitive data.

The multi-agency scope of this contract is particularly noteworthy. By serving the DoD, Intelligence Community and civilian agencies simultaneously, Leidos will be able to implement standardized security protocols across various government entities - a important factor in maintaining robust cybersecurity defenses. Think of it as creating a unified security ecosystem rather than separate, potentially vulnerable silos.

The contract's focus on both architecture and engineering support indicates a comprehensive approach to security infrastructure. This isn't just about maintaining existing systems - it's about designing and implementing next-generation security solutions that can adapt to evolving threats. For investors, this suggests Leidos is positioning itself at the forefront of government cybersecurity modernization efforts.

RESTON, Va., Jan. 22, 2025 /PRNewswire/ -- Leidos (NYSE: LDOS) today announced a new prime contract to provide Key Management Architecture & Engineering and Cyber Security Engineering Support Services to the Department of Defense, Intelligence Community and civilian agencies. The contract was awarded by the Naval Information Warfare Center Pacific and has a one-year base period of performance and four one-year optional extensions. The contract has a total value of $120 million if all options are exercised.

"Leidos specializes in providing full spectrum cybersecurity solutions and has long supported cryptographic key management for the Navy," said Roy Stevens, Leidos National Security Sector president. "We look forward to providing an efficient and modern-day key management solution to our warfighters."

Leidos securely designs and deploys electronic cryptographic key material for its U.S. and allied national security customers. Under this contract, Leidos will design, develop, test, integrate and maintain technologies to operate key management systems.

About Leidos

Leidos is an industry and technology leader serving government and commercial customers with smarter, more efficient digital and mission innovations. Headquartered in Reston, Virginia, with 48,000 global employees, Leidos reported annual revenues of approximately $15.4 billion for the fiscal year ended December 29, 2023. For more information, visit www.leidos.com.

Certain statements in this announcement constitute "forward-looking statements" within the meaning of the rules and regulations of the U.S. Securities and Exchange Commission (SEC). These statements are based on management's current beliefs and expectations and are subject to significant risks and uncertainties. These statements are not guarantees of future results or occurrences. A number of factors could cause our actual results, performance, achievements, or industry results to be different from the results, performance, or achievements expressed or implied by such forward-looking statements. These factors include, but are not limited to, the "Risk Factors" set forth in Leidos' Annual Report on Form 10-K for the fiscal year ended December 29, 2023, and other such filings that Leidos makes with the SEC from time to time. Readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. Leidos does not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statements were made.

Media Contacts:

Brandon Ver Velde                                                     
(571) 526-6257
brandon.p.vervelde@leidos.com

Greg Hellman
(571) 526-7592
greg.hellman@leidos.com

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SOURCE Leidos Holdings, Inc.

FAQ

What is the value of Leidos's (LDOS) new cybersecurity contract with Naval Information Warfare Center Pacific?

The contract has a total value of $120 million if all options are exercised.

What is the duration of Leidos's (LDOS) new Naval Information Warfare Center Pacific contract?

The contract has a one-year base period of performance with four one-year optional extensions, potentially lasting up to five years total.

What services will Leidos (LDOS) provide under the new $120M defense contract?

Leidos will provide Key Management Architecture & Engineering and Cyber Security Engineering Support Services, including designing, developing, testing, integrating, and maintaining technologies for key management systems.

Which government agencies will benefit from Leidos's (LDOS) new cybersecurity contract?

The contract will serve the Department of Defense, Intelligence Community, and civilian agencies.