Leidos Holdings, Inc.

For the period ended Jul 3, 2026. Filed Aug 4, 2026.

About this filing

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.

Jul 3, 2026 · Filed Aug 4, 2026

LDOS$132.68-2.3%Stored close · as of Nov 6, 2026

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Contents

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 · Six Months Ended
(dollars in millions) · July 3,2026 · July 4,2025 · Percent change · July 3,2026 · July 4,2025 · Percent change
Revenues	$4,558		$4,253	7.2%	$8,958	$8,498	5.4%
Operating income	514		571	(10.0%)	1,022	1,101	(7.2%)
Non-operating expense, net	(63)		(53)	18.9%	(142)	(105)	35.2%
Income before income taxes	451		518	(12.9%)	880	996	(11.6%)
Income tax expense	(95)		(125)	(24.0%)	(189)	(238)	(20.6%)
Net income	356		393	(9.4%)	691	758	(8.8%)
Net income attributable to Leidos common stockholders	$354		$391	(9.5)%	$682	$754	(9.5)%
Operating margin	11.3%	13.4%		11.4%	13.0%

SEGMENT AND CORPORATE RESULTS

Three Months Ended · Six Months Ended
Intelligence & Digital(dollars in millions) · July 3,2026 · July 4,2025 · Percent change · July 3,2026 · July 4,2025 · Percent change
Revenues	$1,499		$1,408	6.5%	$3,012	$2,816	7.0%
Operating income	142		135	5.2%	288	267	7.9%
Operating margin	9.5%	9.6%		9.6%	9.5%

The increase in revenues and operating income for the three months ended July 3, 2026, as compared to the three months ended July 4, 2025, was primarily attributable to program wins, partially offset by the completion of certain contracts.

The increase in revenues for the six months ended July 3, 2026, as compared to the six months ended July 4, 2025, was primarily attributable to program wins and $27 million of increased revenues recognized from the acquisition of Savanna Industries, Inc. ("Kudu Dynamics"), partially offset by the completion of certain contracts.

The increase in operating income for the six months ended July 3, 2026, as compared to the six months ended July 4, 2025, was primarily attributable to program wins and improved margins from program mix, partially offset by the completion of certain contracts.

Leidos Holdings, Inc.	25

Three Months Ended · Six Months Ended
Health(dollars in millions) · July 3,2026 · July 4,2025 · Percent change · July 3,2026 · July 4,2025 · Percent change
Revenues	$1,086		$1,175	(7.6%)	$2,274	$2,363	(3.8%)
Operating income	254		303	(16.2%)	538	591	(9.0%)
Operating margin	23.4%	25.8%		23.7%	25.0%

The decrease in revenues and operating income for the three and six months ended July 3, 2026, as compared to the three and six months ended July 4, 2025, was primarily attributable to a net decrease in volumes.

Three Months Ended · Six Months Ended
Homeland(dollars in millions) · July 3,2026 · July 4,2025 · Percent change · July 3,2026 · July 4,2025 · Percent change
Revenues	$1,018		$771	32.0%	$1,834	$1,541	19.0%
Operating income	92		64	43.8%	125	125	—%
Operating margin	9.0%	8.3%		6.8%	8.1%

The increase in revenues for the three months ended July 3, 2026, as compared to the three months ended July 4, 2025, was primarily attributable to a net increase in volumes, program wins,$141 million recognized from the acquisition of Entrust and a $14 million favorable impact from exchange rate movements, partially offset by the completion of certain contracts.

The increase in revenues for the six months ended July 3, 2026, as compared to the six months ended July 4, 2025, was primarily attributable to a net increase in volumes, program wins,$152 million recognized from the acquisition of Entrust and a $37 million favorable impact from exchange rate movements, partially offset by the completion of certain contracts and write-downs on certain programs.

The increase in operating income for the three and six months ended July 3, 2026, as compared to the three and six months ended July 4, 2025, was primarily attributable to a net increase in volumes, program wins and the contribution from the acquisition of Entrust. The increase was partially offset by increased amortization, acquisition and restructuring expenses.

Three Months Ended · Six Months Ended
Defense(dollars in millions) · July 3,2026 · July 4,2025 · Percent change · July 3,2026 · July 4,2025 · Percent change
Revenues	$955		$899	6.2%	$1,838	$1,778	3.4%
Operating income	84		78	7.7%	146	152	(3.9%)
Operating margin	8.8%	8.7%		7.9%	8.5%

The increase in revenues for the three and six months ended July 3, 2026, as compared to the three and six months ended July 4, 2025, was primarily attributable to program wins and increased volumes on existing contracts, partially offset by the completion of certain contracts.

The increase in operating income for the three months ended July 3, 2026, as compared to the three months ended July 4, 2025, was primarily attributable to program wins, partially offset by the completion of certain contracts.

The decrease in operating income for the six months ended July 3, 2026, as compared to the six months ended July 4, 2025, was primarily attributable to the completion of higher-margin contracts, partially offset by program wins.

	Three Months Ended			Six Months Ended
Corporate(dollars in millions)	July 3,2026	July 4,2025	Percent change	July 3,2026	July 4,2025	Percent change
Operating loss	$(58)	$(9)	NM	$(75)	$(34)	120.6%

NM - Not Meaningful

The increase in operating loss for the three months ended July 3, 2026, as compared to the three months ended July 4, 2025, was primarily attributable to the receipt of a $25 million insurance reimbursement in the prior year for legal costs primarily incurred prior to fiscal year 2025, and increased acquisition and integration costs in the current year.

26	Leidos Holdings, Inc.

The increase in operating loss for the six months ended July 3, 2026, as compared to the six months ended July 4, 2025, was primarily attributable to higher insurance reimbursements for legal costs in the prior year, and increased acquisition and integration costs in the current year.

NON-OPERATING EXPENSE, NET

Non-operating expense, net for the three months ended July 3, 2026, was $63 million as compared to $53 million for the three months ended July 4, 2025. The increase was primarily attributable to increased interest expense from the termination of our senior unsecured bridge loan facility and issuance of our $600 million and $800 million senior notes.

Non-operating expense, net for the six months ended July 3, 2026, was $142 million as compared to $105 million for the six months ended July 4, 2025. The increase was primarily attributable to 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.

PROVISION FOR INCOME TAXES

The effective tax rate was 21.1% for the three months ended July 3, 2026, compared to 24.1% for the three months ended July 4, 2025, and 21.5% for the six months ended July 3, 2026, compared to 23.9% for the six months ended July 4, 2025. The decrease in both periods was primarily due to a decrease in unrecognized tax benefits.

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