Leidos Holdings, Inc.

U.S. GOVERNMENT MARKETS

During the three and nine months ended October 2, 2026, we generated approximately 83% and 84%, respectively, of total revenues from contracts with the U.S. government, as compared to 87% for both the three and nine months ended October 3, 2025. Accordingly, our business performance is affected by the overall level of U.S. government spending, especially national security, homeland security and intelligence spending, and the alignment of our service and product offerings and capabilities with current and future budget priorities of the U.S. government.

Federal funding is secured through December 11, 2026, under a continuing resolution (“CR”) and Congress is expected to keep working on fiscal year 2027 appropriations ahead of that date. If Congress does not enact the necessary appropriations legislation or an additional CR by then, a partial or full federal government shutdown would result.

INTERNATIONAL MARKETS

Sales to customers in international markets represented approximately 8% of total revenues for both the three and nine months ended October 2, 2026, and October 3, 2025. Our international customers include foreign governments and their agencies. Our international business increases our exposure to international markets and the associated international regulatory, foreign currency exchange rate and geopolitical risks.

Changes in international trade policies, including higher tariffs on imported goods and materials, may increase the cost of certain goods necessary to fulfill our contractual requirements and for internal purposes. We expect to recover certain portions of the increase to the cost of goods through contractual measures. While we continue to evaluate the tariff environment and potential impacts of higher tariffs, we currently do not expect them to have a significant effect on our business.