Chairman & Chief Executive Officer at Leidos
Thank you, Stuart, and thank you all for joining us this morning. Our third quarter results demonstrate the momentum in our business as we continue to report revenue growth at the upper end of our guidance across our diversified portfolio. In addition, our dedicated team delivered earnings in excess of our forecast and generated the highest quarterly cash flow from operations in our history. These results position us well to deliver on our full year financial targets as we make the world safer, healthier and more efficient. As usual, I'll touch on our financial performance, capital allocation, business development performance and people.
First, our financial performance for the quarter was strong and ahead of consensus at both the top and bottom-lines. Record revenue of $3.61 billion were up 4% year-over-year. Adjusted EBITDA margin of 10.3% was up 10 basis points sequentially and non-GAAP diluted EPS came in above our forecast and consensus. Our third quarter performance and improved visibility enables us to raise our revenue outlook and derisk our earnings for the full year. We also generated a record $748 million of cash flow from operations. This puts us on-track to meet our cash commitment for the year, strengthens our balance sheet and positions us for future capital deployments to benefit shareholders, which brings me to point number two, our approach to capital allocation.
Yesterday, we closed our acquisition of Cobham Aviation Services, Australia's Aviation Special Mission unit. This business provides border force airborne surveillance and marine safety search-and-rescue and generates roughly $100 million in annual revenues. It is immediately accretive to both non-GAAP EPS and EBITDA margin. At this point in our strategic journey, the Cobham acquisition is a great example of what we're looking for. It expands market access, provides us franchise programs with a customer of strategic importance and complements our existing business, all at a multiple below ours and a price that enable our shareholders to benefit from future revenue and cost synergies.
Our cash balance at the end of the quarter was $807 million as collections were especially strong in the back half of September, the close of the government fiscal year. Our plan is not to accumulate cash. We just paid for the Cobham acquisition, and we'll be paying down some debt to move closer to our target leverage ratio of 3 times. Our balance sheet enables us to steadily deploy capital in productive ways. Given the strength of the company and evaluation that doesn't reflect our long history of driving steady earnings growth and cash generation, we'll lean towards share repurchase when we have deployable capital.
Number 3, our business development results demonstrate that our strong positioning in the government technology marketplace is enabling us to navigate a difficult environment. Procurement timelines continue to extend, and DoD outlays continue to lag budget authority. With net bookings of $4.1 billion in the quarter, we achieved a book-to-bill ratio of 1.1 and grew backlog to $35 billion or $35.4 billion on a constant currency basis. We also had nearly $1 billion of third quarter awards protested. Absence the protests, book-to-bill would have been 1.4.
Highlighting some important awards. We received a 5-year $1.5 billion dollar task order to support the DoD with rapid technology insertion to enhance C5ISR missions globally. We expect to receive the full award value over the life of the contract. But in accordance with our policy, we only booked $100 million in the quarter. This award noted as Sentinel is all about getting capabilities into theater and to the combatant commanders quickly. As a solution-agnostic integrator, part of our role is to find innovative technologies that can be rapidly matured, proven and integrated in support of multi-domain operations.
Sentinel fits within the Joint All-Domain Command & Control or JADC2) umbrella. Our positioning on JADC2 was also bolstered by the Air Force's selection of the Advanced Battle Management System Digital Infrastructure Consortium. With four other consortium members, Leidos will work to deliver the Air Force's vision for distributed battle Management and decision advantage by enabling speed, security and integration at-scale.
NAVSEA awarded Leidos a $358 million contract to design and build a medium-sized unmanned undersea vehicle to provide autonomous oceanographic sensing and data collection for operational intelligence as well as to support mine countermeasures. We also received our first task order on the $11.5 billion Defense Enclave Services contract. The $138 million task order will lay the framework and begin to consolidate integrate and optimize 5 agencies on a common network architecture through digital modernization and transformation. We successfully completed the transition period and have assumed operational responsibility for DoD net and DISA net.
And a key win for our space business within Dynetics, we received a subcontract with Northrop Grumman to develop hypersonic defense sensors for the Space Development Agency. We have more than 40 years of experience developing and flying space-based electro optical and infrared sensors and payloads for a variety of missions. Through this award, we'll develop and build the sensor payload for a proliferated constellation of low earth orbit satellites for the Tranche 1 Tracking Layer. The tracking layer constellation will detect and track advanced hypersonic and ballistic missile threats as part of SDAs missile defense architecture.
On the predecessor contract, our Tranche 0 payload is on schedule to launch by the end of the year. The Tranche 1 design will increase coverage area while reducing payload size, weight and power. Eventually, these constellations of satellites will form the core of a new national defense space architecture providing global coverage and adding resiliency in the country's initial warning arena. As a reminder, we'll be hosting an Investor site visit at Dynetics in Huntsville, Alabama on December 1st. Please reach out to Stuart if you're interested in attending.
And the final key win that I'll touch on this morning is the re-award of our IT support to the Social Security Administration. As of the second quarter call, our award was protested by the previous incumbent, and after a resubmission of proposals, the SSA re-awarded all of the work to Leidos. The incumbent once again protested the award, and the new GAO review period expires on January 3rd.
And lastly point number four. Leidos is an attractive destination for great talent. In the third quarter, we hired just over 2,800 people and year-to-date, we have hired more than 9,000 people and increased headcount by more than 2,000. It's still early, but voluntary attrition is trending in the right direction, and we don't expect that staffing will significantly constrain our plans for next year. Our dedicated and capable people are a key differentiator for us and an important national asset.
Before turning it over to Chris, let me touch on the federal budget landscape. As expected, the federal government is operating under a continuing resolution at last year's funding levels until December 16th. Congress is still working on the appropriations and authorization bills for government fiscal year 2023. Nothing will get voted on until after the November 8th elections, but we expect that robust budgets will get passed before the end of the calendar year. Outlays are beginning to improve, which bodes well for future growth.
Chris, over to you.