Roger Krone
Chairman and Chief Executive Officer at Leidos
Thank you, Stuart, and thank you all for joining us this morning. The third quarter marked another strong quarter for Leidos with record levels of revenue, adjusted EBITDA. non-GAAP diluted EPS, and backlog. Our success is the direct result of building our business portfolio, focused on vital missions and a workforce that is motivated to enhance those missions through technology, engineering, and science. As we described at our October Investor Day, we see continued success ahead based on our scale, positioning, and talented people. To organize my remarks, I'll address four messages. First, our financial results demonstrate our ability to grow organically, drive earnings, and generate cash. Second, our business development engine delivered large and important awards that speak to our differentiated position in the market. Third, we're effectively deploying capital to create shareholder value. And fourth, we are investing in our people and building a company that we can all be proud of.
Number one, our strong financial performance was highlighted by outstanding earnings and cash performance. Revenue of $3.48 billion, we're up organically 6% year-over-year ahead of the market. Non-GAAP diluted EPS for the quarter was a $1.80, which was up 22% year-over-year, driven by strong operating performance as reflected in our adjusted EBITDA margin of 11.6%. Finally, we generated $565 million of cash flow from operations, and free cash flow of $541 million for our free cash flow conversion ratio of 211% of non-GAAP net income. With an asset-light model, and ability to take EBITDA and to convert it to cash, and a lean balance sheet, cash generation is a hallmark of Leidos.
Number 2, business development continued the momentum that is driving our industry leading organic growth this year. We achieved net bookings of $4.7 billion in the quarter, representing a book to bill ratio of 1.4, our 15th consecutive quarter with a book to bill ratio of 1.0 or greater. As a result, total backlog at the end of the quarter stood at a record $34.7 billion, which was up 9% on a year-over-year basis. I will now touch on four of our key wins. We were awarded a $600 million prime contract to continue to support the Army's Geospatial Center, BuckEye mission. We're providing mission critical unclassified high resolution color imagery and digital 3D terrain over all operationally relevant areas of the world.
Our scale enabled us to invest in aircraft that we own and operate, and a cadre of professionals to support the mission. Through this program, we provide our war fighters with a decisive advantage on the battlefield. And given the unclassified nature of the BuckEye data, support partner nations as well as humanitarian assistance and disaster relief. The National Security Agency awarded us a $300 million prime contract to develop and modernize the agency's technical signals intelligence mission. Under the contract, we provide the technical services to develop, deploy, and sustain a wide range of enhanced tech collection, production, and analysis capabilities that provide our nation's leaders and military troops with actionable intelligence and critical information to protect and defend our country.
The US Army awarded our Dynetics subsidiary a $237 million, two-and-a-half-year contract, for the enduring Indirect Fires Protection Capability, or IFPC, to produce a transportable system to engage and defeat cruise missile and unmanned aircraft system threats. Our solution uses an open system architecture that provides both flexibility and growth, as well as full integration with the Army's Integrated Air and Missile Defense Battle Command System. Under this initial contract, we'll deliver 16 launcher prototypes and 60 interceptors. I view this as the seed corn. If we do it right, IFPC can grow into a billion dollar plus program. The contract includes options for follow on production of hundred launchers with associated interceptors.
Finally, Customs and Border Protection awarded us another important multi-award IDIQ for non-intrusive inspection. So far this year, we've received two IDIQs with a total of $870 million in ceiling value and $200 million in tasking on those contracts. Safeguarding our nation's ports and borders is a critical priority and CBP has set a goal of 100% screening of cars and cargo at the border, versus the single digit percentages that we achieve today. Congress has appropriated a significant amount of money for more screening. So we see this as a great opportunity for us.
Number 3. I view capital allocation as one of my key functions as CEO, and we're deploying capital to create shareholder value. During the quarter, we bought back 137 million of our stock through open market repurchases. At our Investor Day in October, we shared a target of $3.5 billion in cash flow from operations from 2022 through 2024. After considering capital expenditures, some debt pay down, and our dividend program, we'll have approximately $2.2 billion to deploy across M&A and share repurchases. We're always looking at technology add-ons and so that pipeline is pretty active. In Q3, we added a small strategic acquisition to our Dynetics subsidiary to accelerate some of its growth opportunities. Beyond that, there is currently nothing major on the horizon. We've built a portfolio that we're proud of and we think we're well positioned to grow. We'll pursue large M&A only if we find a property along the way that could really help accelerate our strategy. Number 4.
People are at the heart of what we do, and this quarter demonstrated our ability to attract the talent that we need. During the quarter, we hired more than 2,900 people, and at the end of the quarter, we were more than 43,000 strong. Our headcount grew 2% sequentially and 12% year-over-year. Still, recruiting is an evergreen challenge. We have about 1,400 funded vacancies, and recruiting and retention remains areas of strategic focus for the leadership team. One of the reasons we're attractive to job applicants is that we invest in upskilling our people and building an innovation culture. As an example, in Q3 we held our first ever Leidos Sphere, a 24-hour virtual technology conference that brought together employees from around the world to share technical solutions.
CTOs, solutions architects, and other technologist streamed presentations live from the US, Australia, Israel, and the UK. I personally saw the clear value for participants with real time answers to questions and lively chat discussions. In a time of increasingly complex global challenges, our global network of customers and colleagues working together to address those challenges is a competitive differentiator. Another part of what makes Leidos so attractive is that we're a values based company. This leadership team is committed to Leidos being a great corporate citizen. We're mindful of our opportunities and responsibilities to our many stakeholders, especially as we grow. With our mission to make the world, safer, healthier and more efficient, we believe we can build a future where our people and technology make a real impact.
Having achieved our legacy greenhouse gas emissions reduction goal, we have now set new environmental goals as well as social and governance goals for 2030. Our new next level Leidos ESG goals highlight key efforts related to cultivating inclusion, advancing environmental sustainability, and promoting healthier lives. We believe these efforts will not only sustain and enrich our culture at Leidos, but they'll also have a positive impact on all of our stakeholders. We'll report our progress annually in our Corporate Responsibility Report, which we've been publishing for more than a decade. Through this effort, we're committed to continued transparency and how we're doing from a diversity and environmental standpoint, as well as making the lives of our employees and communities better. And so you'll see that in our disclosures. Before turning the call over to Chris, I'd like to address the current budget environment as it gives important context for the guidance that he will be providing.
As expected, Congress enacted a continuing resolution and suspended the debt ceiling to avoid a shutdown and economic turmoil. Each is now set to expire on December 3. The current thinking is that Congress will try to package the spending bills together into an omnibus spending bill for the President to sign before December 3, or they may kick the can down the road and pass another CR that could last until next March. In addition, the House has indicated that it plans to attempt to pass two large legislative items this week or maybe this month. The first, the $1.2 trillion bipartisan infrastructure framework to improve the country's roads, bridges, broadband, and other critical infrastructure priorities has already passed the Senate, so it would head to President Biden's desk for signature.
The second, the $1.75 trillion build back better proposal to overhaul the nation's healthcare, education, climate, and tax laws who would head to the Senate for debate. The fate of both bills is still unclear as is the path forward on the spending bills and the debt ceiling. In the face of this uncertainty, some of our customers have tamped down their normal spending patterns. Given the mission critical nature of our work, we expect only a modest impact to our results while the budget issues remain unresolved. I will now turn the call over to Chris Cage.