Leidos Holdings, Inc.

For the period ended Oct 2, 2026. Filed Nov 3, 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.

Oct 2, 2026 · Filed Nov 3, 2026

LDOS$135.76+2.3%Stored close · as of Nov 9, 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 · Nine Months Ended
(dollars in millions) · October 2,2026 · October 3,2025 · Percent change · October 2,2026 · October 3,2025 · Percent change
Revenues	$4,630		$4,469	3.6%	$13,588	$12,967	4.8%
Operating income	553		535	3.4%	1,575	1,636	(3.7%)
Non-operating expense, net	(71)		(51)	39.2%	(213)	(156)	36.5%
Income before income taxes	482		484	(0.4%)	1,362	1,480	(8.0%)
Income tax expense	(69)		(115)	(40.0%)	(258)	(353)	(26.9%)
Net income	413		369	11.9%	1,104	1,127	(2.0%)
Net income attributable to Leidos common stockholders	$410		$367	11.7%	$1,092	$1,121	(2.6)%
Operating margin	11.9%	12.0%		11.6%	12.6%

SEGMENT AND CORPORATE RESULTS

Three Months Ended · Nine Months Ended
Intelligence & Digital(dollars in millions) · October 2,2026 · October 3,2025 · Percent change · October 2,2026 · October 3,2025 · Percent change
Revenues	$1,546		$1,525	1.4%	$4,558	$4,341	5.0%
Operating income	171		141	21.3%	459	408	12.5%
Operating margin	11.1%	9.2%		10.1%	9.4%

The increase in revenues for the three and nine months ended October 2, 2026, compared to the three and nine months ended October 3, 2025, was primarily attributable to program wins, partially offset by a net decrease in volumes and the completion of certain contracts.

The increase in operating income for the three and nine months ended October 2, 2026, compared to the three and nine months ended October 3, 2025, was primarily attributable to program wins and improved margins from program mix, partially offset by a net decrease in volumes and the completion of certain contracts.

26	Leidos Holdings, Inc.

Three Months Ended · Nine Months Ended
Health(dollars in millions) · October 2,2026 · October 3,2025 · Percent change · October 2,2026 · October 3,2025 · Percent change
Revenues	$1,068		$1,210	(11.7%)	$3,342	$3,573	(6.5%)
Operating income	240		324	(25.9%)	778	915	(15.0%)
Operating margin	22.5%	26.8%		23.3%	25.6%

The decrease in revenues and operating income for the three and nine months ended October 2, 2026, compared to the three and nine months ended October 3, 2025, was primarily attributable to reduced volumes in our managed health services programs and the reduction of related incentive fees on those programs in the second half of fiscal 2026.

Three Months Ended · Nine Months Ended
Homeland(dollars in millions) · October 2,2026 · October 3,2025 · Percent change · October 2,2026 · October 3,2025 · Percent change
Revenues	$1,024		$775	32.1%	$2,858	$2,316	23.4%
Operating income	81		50	62.0%	206	175	17.7%
Operating margin	7.9%	6.5%		7.2%	7.6%

The increase in revenues for the three months ended October 2, 2026, compared to the three months ended October 3, 2025, was primarily attributable to a net increase in volumes, program wins, $142 million recognized from the acquisition of Entrust, and a $10 million favorable impact from exchange rate movements, partially offset by the completion of certain contracts.

The increase in revenues for the nine months ended October 2, 2026, compared to the nine months ended October 3, 2025, was primarily attributable to $294 million recognized from the acquisition of Entrust, a net increase in volumes, program wins, and a $47 million favorable impact from exchange rate movements, partially offset by the completion of certain contracts and the divestiture of a business in the prior year.

The increase in operating income for the three months ended October 2, 2026, compared to the three months ended October 3, 2025, was primarily attributable to a net increase in volumes, partially offset by higher amortization, acquisition and restructuring expenses.

The increase in operating income for the nine months ended October 2, 2026, compared to the nine months ended October 3, 2025, was primarily attributable to a net increase in volumes and program wins. The increase was partially offset by higher amortization, acquisition and restructuring expenses and the divestiture of a business in the prior year.

On October 5, 2026, the divestiture of the SES Business closed. Upon closing, Leidos retained a 41.5% non-controlling equity interest in the new joint venture and Altaris holds a 58.5% interest. As a result of the transaction, revenues in the fourth quarter of fiscal 2026 will be lower than they would have been had the transaction not occurred.

Three Months Ended · Nine Months Ended
Defense(dollars in millions) · October 2,2026 · October 3,2025 · Percent change · October 2,2026 · October 3,2025 · Percent change
Revenues	$992		$959	3.4%	$2,830	$2,737	3.4%
Operating income	86		79	8.9%	232	231	0.4%
Operating margin	8.7%	8.2%		8.2%	8.4%

The increase in revenues for the three and nine months ended October 2, 2026, compared to the three and nine months ended October 3, 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 October 2, 2026, compared to the three months ended October 3, 2025, was primarily attributable to program wins and increased volumes on existing contracts, partially offset by the completion of certain contracts.

Operating income remained consistent between the nine months ended October 2, 2026, and the nine months ended October 3, 2025, as program wins and improved operating performance were offset by the completion of higher-margin contracts.

Leidos Holdings, Inc.	27

	Three Months Ended			Nine Months Ended
Corporate(dollars in millions)	October 2,2026	October 3,2025	Percent change	October 2,2026	October 3,2025	Percent change
Operating loss	$(25)	$(59)	NM	$(100)	$(93)	7.5%

NM - Not Meaningful

The decrease in operating loss for the three months ended October 2, 2026, compared to the three months ended October 3, 2025, was primarily attributable to $23 million of lower legal expenses compared to the prior year.

The increase in operating loss for the nine months ended October 2, 2026, compared to the nine months ended October 3, 2025, was primarily attributable to increased acquisition and integration costs, partially offset by decreased legal fees in the current year.

NON-OPERATING EXPENSE, NET

Non-operating expense, net for the three months ended October 2, 2026, was $71 million compared to $51 million for the three months ended October 3, 2025. The increase was primarily due to higher interest expense from the issuance of our $600 million and $800 million senior notes.

Non-operating expense, net for the nine months ended October 2, 2026, was $213 million compared to $156 million for the nine months ended October 3, 2025. The increase was primarily due to a $23 million settlement loss from the buy-out of our UK defined benefit pension plan and higher 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 14.3% for the three months ended October 2, 2026, compared to 23.8% for the three months ended October 3, 2025, and 18.9% for the nine months ended October 2, 2026, compared to 23.9% for the nine months ended October 3, 2025. The decreases in both periods were primarily due to an increase in the federal research tax credit and a decrease in unrecognized tax benefits.

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