Leidos Holdings, Inc.
For the period ended Apr 3, 2026. Filed May 5, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Apr 3, 2026 · Filed May 5, 2026
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Item 2. Results of Operations
RESULTS OF OPERATIONS
The following table summarizes our condensed consolidated results of operations for the periods presented:
| Three Months Ended | |||
|---|---|---|---|
| (dollars in millions) | April 3,2026 | April 4,2025 | Percent change |
| Revenues | $4,400 | $4,245 | 3.7% |
| Operating income | 508 | 530 | (4.2%) |
| Non-operating expense, net | (79) | (52) | 51.9% |
| Income before income taxes | 429 | 478 | (10.3%) |
| Income tax expense | (94) | (113) | (16.8%) |
| Net income | 335 | 365 | (8.2%) |
| Net income attributable to Leidos common stockholders | $328 | $363 | (9.6%) |
| Operating margin | 11.5% | 12.5% | |
SEGMENT AND CORPORATE RESULTS
| Three Months Ended | |||
|---|---|---|---|
| Intelligence & Digital(dollars in millions) | April 3,2026 | April 4,2025 | Percent change |
| Revenues | $1,513 | $1,408 | 7.5% |
| Operating income | 146 | 132 | 10.6% |
| Operating margin | 9.6% | 9.4% | |
The increase in revenues for the three months ended April 3, 2026, as compared to the three months ended April 4, 2025, was primarily attributable to program wins and $22 million recognized from the acquisition of Kudu Dynamics, partially offset by the completion of programs and a net decrease in volumes.
The increase in operating income for the three months ended April 3, 2026, as compared to the three months ended April 4, 2025, was primarily attributable to program wins and improved efficiencies, partially offset by a net decrease in volumes and the completion of programs.
| 22 | Leidos Holdings, Inc. |
| Three Months Ended | |||
|---|---|---|---|
| Health(dollars in millions) | April 3,2026 | April 4,2025 | Percent change |
| Revenues | $1,188 | $1,188 | —% |
| Operating income | 284 | 288 | (1.4%) |
| Operating margin | 23.9% | 24.2% | |
Revenues remained consistent while operating income slightly decreased for the three months ended April 3, 2026, as compared to the three months ended April 4, 2025. This was primarily attributable to a net decrease in volumes, offset by net write-ups on certain programs within the managed health services business.
| Three Months Ended | |||
|---|---|---|---|
| Homeland(dollars in millions) | April 3,2026 | April 4,2025 | Percent change |
| Revenues | $816 | $770 | 6.0% |
| Operating income | 33 | 61 | (45.9%) |
| Operating margin | 4.0% | 7.9% | |
The increase in revenues for the three months ended April 3, 2026, as compared to the three months ended April 4, 2025, was primarily attributable to a net increase in volumes, $23 million favorable impact from exchange rate movements, program wins and $11 million recognized from the acquisition of Entrust. The increase was partially offset by net write-downs on certain programs.
The decrease in operating income for the three months ended April 3, 2026, as compared to the three months ended April 4, 2025, was primarily attributable to an increase of $25 million in acquisition, integration and restructuring costs, driven by the Entrust transaction and net write-downs on certain programs. The decrease was partially offset by a net increase in volumes.
| Three Months Ended | |||
|---|---|---|---|
| Defense(dollars in millions) | April 3,2026 | April 4,2025 | Percent change |
| Revenues | $883 | $879 | 0.5% |
| Operating income | 62 | 74 | (16.2%) |
| Operating margin | 7.0% | 8.4% | |
The increase in revenues for the three months ended April 3, 2026, as compared to the three months ended April 4, 2025, was primarily attributable to program wins, partially offset by completion of certain contracts.
The decrease in operating income for the three months ended April 3, 2026, as compared to the three months ended April 4, 2025, was primarily attributable to the completion of contracts and write-downs on certain programs in the current year, partially offset by program wins.
| Three Months Ended | |||
|---|---|---|---|
| Corporate(dollars in millions) | April 3,2026 | April 4,2025 | Percent change |
| Operating loss | $(17) | $(25) | (32.0%) |
The decrease in operating loss for the three months ended April 3, 2026, as compared to the three months ended April 4, 2025, was primarily attributable to a $15 million insurance reimbursement for legal costs incurred prior to fiscal 2026, partially offset by an increase in acquisition and integration costs.
NON-OPERATING EXPENSE, NET
Non-operating expense, net for the three months ended April 3, 2026, was $79 million as compared to $52 million for the three months ended April 4, 2025. The increase was primarily driven by a $23 million settlement loss from the buy-out of our UK defined benefit pension plan and increased interest expense from the termination of our senior unsecured bridge loan facility and issuance of our $600 million and $800 million senior notes.
| Leidos Holdings, Inc. | 23 |
|---|
PROVISION FOR INCOME TAXES
For the three months ended April 3, 2026, our effective tax rate was 21.9% compared to 23.6% for the three months ended April 4, 2025. The decrease to the effective tax rate was primarily due to an increase in net excess tax benefits related to employee stock-based payment transactions and a decrease in unrecognized tax benefits.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.