LDOS

Leidos Holdings, Inc.

Next est. report 2026-11-03 · BMO

AI '25: Data OwnersFiscal Spend Short '25: Non-Military Govt ContractsModern Warfare '26: Golden Dome Modern Warfare '26: Hypersonics & Missile Defense Modern Warfare '26: ISR Modern Warfare '26: Integrators Space Supply Chain '26: Space Traffic Control & SDA TrumpPolicy PreElection Long '24: EU Defense World Cup '26: Security

Loading…

Loading chart…

Overview

Leidos Holdings, Inc. provides technology and engineering services for national security, healthcare, and civil infrastructure. Its segments include Intelligenc

Leidos Holdings, Inc. provides technology and engineering services for national security, healthcare, and civil infrastructure. Its segments include Intelligence and Digital (33% of revenue), Health (27%), Defense (22%), and Homeland (18%). The company primarily serves the U.S. Department of Defense, intelligence agencies, and the Veterans Administration, delivering critical software, cybersecurity, and large-scale medical exam management.

Search Keywords Brand Product

MHS GENESIS
My Service Treatment Record
Parkade software
LAVA software
IFPC missile system
AGM-190A Sphere missile
LCCM munitions
ALPS sensing system
Skywire AI tool
Air Shield counter UAS
defense technology
national security solutions
government IT services
health information management
medical disability exams
air traffic management
energy infrastructure engineering
cybersecurity solutions
artificial intelligence in defense
autonomous systems
hypersonic weapons
space sensing payloads
counter-UAS systems
systems integration

Search Keywords Event Phrases

Leidos Q2 2026 earnings
Operation Jailbreak hackathon
SES joint venture closing
CoreWeave partnership

Search Keywords Policy Regulatory

FY2027 US defense budget
National Defense Authorization Act
Munitions Acceleration Council contracts
Golden Dome initiative
VA medical disability exam recompete

What They Do (Plain English & Analogies): Leidos acts like a master builder or general contractor for the U.S. government and other critical organizations, tackling their most complex technology and engineering challenges. Imagine if the Pentagon needs a new fleet of self-driving ships, or the Department of Veterans Affairs needs to manage millions of medical exams, or the Federal Aviation Administration wants to modernize its air traffic control systems – Leidos is the company that designs, builds, and manages these entire high-tech solutions. They combine advanced software from places like Silicon Valley with heavy-duty industrial hardware to create functioning, cutting-edge systems. They essentially take a government's 'wish list' for a new defense, health, or civil system and turn it into a working, high-tech reality.
Very Brief History: Founded in 1969 as Science Applications International Corporation (SAIC), the company initially focused on government research and engineering. In 2013, it split into two entities, with Leidos focusing on technology and solutions. A significant merger in 2016 with Lockheed Martin's IT business (IS&GS) doubled its size, and the 2020 acquisition of Dynetics further expanded its reach into high-end defense hardware. By 2026, Leidos has evolved into a 'Defense Tech' powerhouse, guided by its 'North Star 2030' strategy.
"Street Stereotype": Traditionally, Leidos was often perceived as a 'low-margin body shop' that primarily provided staff for government IT projects. However, the current 'street stereotype' views Leidos as a 'Defense Tech' leader successfully transitioning towards higher-margin proprietary products and specialized managed services. Investors now see it as a reliable, steady company with significant potential for margin improvement, particularly from its Health and Defense segments.
Subsidiaries On Linked In*: Dynetics
Kudu Dynamics
Gibbs & Cox
ENTRUST Solutions Group — A Leidos company, focused on energy infrastructure engineering and consulting.; LinkedIn: entrustsolutionsgroup
1901 Group
Leidos QTC Health Services — Provides independent medical examination and diagnostic testing services.; LinkedIn: leidos-qtc-health-services
Leidos Biomedical Research
Customer Sectors & Example Clients: Leidos primarily serves the U.S. government across several key sectors: defense, intelligence, civil government, and health. Specific clients and entities mentioned include the U.S. Department of Defense (Department of War, U.S. Army, U.S. Navy), the U.S. Intelligence Community, the Department of Veterans Affairs (VA), and the Federal Aviation Administration (FAA). They also serve allied foreign governments and commercial entities, particularly in the energy sector through Entrust Solutions Group.
New Customers / Segments They'Re Targeting: Leidos is actively targeting new customer segments and expanding its offerings in several areas. In Health, they are focusing on rural health and behavioral health transformation, leveraging their existing network of providers and clinics. They are also expanding their strategic entry points into the broader disability examinations mission with programs like My Service Treatment Record pilot. In the energy sector, through the Entrust acquisition, they are targeting new opportunities in energy infrastructure, including energy generation plant RFPs and battery electrical storage facilities. Within the intelligence and defense communities, they are positioning themselves as a preferred provider of secure cloud, AI, and sovereign AI solutions, as evidenced by their partnership with CoreWeave. They are also expanding their defense tech growth engines beyond space and maritime to include munitions and counter-UAS capabilities.
Supply Chain And Sourcing Geographies: Leidos' supply chain involves both hardware and software components. While specific sourcing geographies are not extensively detailed in the provided information, the company is actively scaling its production capabilities domestically. For instance, they are growing their Huntsville workforce, with 33% of new hires being manufacturing personnel, indicating a focus on domestic manufacturing for their defense tech products.
Sales Geographies And Expansion Plans: Leidos operates both domestically within the United States and internationally. Their sales geographies include the U.S. (across defense, intelligence, civil, and health sectors), and they have a presence in international air traffic management. They also serve allied foreign governments, with specific mention of their portfolios in the UK and Australia. The company is expanding its energy infrastructure services across North America.
How Key Themes May Help/Hurt: The 'Modern Warfare '26: Integrators' theme strongly benefits Leidos. As a key integrator, Leidos is directly involved in designing and engineering space-based defense systems, including those for the 'Golden Dome' initiative, which is receiving billions in incremental funding. The theme's focus on advanced technology, AI-driven solutions, and multi-domain integration aligns perfectly with Leidos' strategy of combining hardware and software expertise for complex national security needs. The urgent demand for integrated defense solutions, driven by escalating global tensions and increased defense spending, creates a robust market for Leidos' offerings in missile defense, counter-UAS, and autonomous systems. The shift towards 'co-investment framework agreements' also plays to Leidos' strength, as they are willing to invest in developing 'franchise' programs. Secondary themes like 'AI '25: Data Owners' are also beneficial, as Leidos is leveraging AI to enhance its digital infrastructure, cyber capabilities, and health solutions, positioning itself as a trusted mission AI expert. 'Modern Warfare '26: Golden Dome', 'Hypersonics & Missile Defense', and 'ISR' directly align with Leidos' defense tech growth pillars, including space sensing payloads, small cruise missiles, and passive sensing systems like ALPS. The company's involvement in programs like the Navy's next-generation medium unmanned surface vessel and the BBG(X) battleship further underscores its alignment with these themes.

3 Main Long-Term Bull Details

Strategic Pivot to High-Margin Defense Tech: Leidos is successfully transitioning from a services-heavy model to a 'National Security Company' by integrating hardware production with software expertise. This includes scaling production for high-priority programs like IFPC, maritime autonomy, hypersonics (AGM-190A/Sphere, LCCM), and space sensing payloads, which are expected to drive higher margins and double-digit revenue growth in the Defense segment.
Diversified Growth Pillars and Strong Backlog: The company's NorthStar 2030 strategy focuses on meaningful growth across defense tech, energy infrastructure (via Entrust Solutions Group), and cyber. Leidos reported $5 billion in net awards in Q2 2026, delivering a 1.1 book-to-bill ratio, and anticipates continued positive bookings momentum, supported by a $12 billion pipeline of opportunities in defense tech alone over the next 12 months. This strong backlog and diversified growth engines provide multi-year revenue visibility and resilience.
Technology-Driven Differentiation and Cash Generation: Leidos is investing in technology and innovation, such as its 'One Leidos' approach combining hardware and software, its leadership in open architectures, and its AI-first strategy (e.g., Skywire, CoreWeave partnership for sovereign AI). These investments enhance efficiency, differentiate its offerings, and contribute to its strong cash-generating capabilities, with operating cash flow reaching a Q2 record of nearly $800 million.

3 Main Long-Term Bear Details

VA Medical Disability Exam (VBA MDE) Recompete Uncertainty: The upcoming recompete for the VA medical disability exam contract introduces significant uncertainty. The suspension of incentive payments for all vendors for the rest of 2026 and the entry of a fourth vendor could pressure revenue and margins in the Health segment, which has historically been a primary profitability driver.
Government Fiscal Cycles and In-Sourcing Trend: Leidos remains sensitive to U.S. government fiscal cycles, with potential delays in contract awards due to continuing resolutions or shutdowns. Furthermore, there is an increasing trend across many government agencies to in-source systems integration and commercial technology acquisition, which could limit the role of systems integrators like Leidos in some areas.
Capital Intensity and Execution Risk in Hardware Production: The company's strategic shift towards hardware production in defense tech, while offering higher margins, represents an increase in capital intensity and execution risk. Scaling production for complex systems like munitions and unmanned vessels requires flawless supply chain management and facility scaling, with potential for delays or challenges in securing anticipated program funding.

Competitors And Differentiation: Leidos competes with a range of companies in the defense, intelligence, civil, and health sectors. While specific competitor names are not extensively listed in the transcript, Leidos differentiates itself through its 'One Leidos' approach, integrating hardware and software, products and services to win in ways few competitors can match. They emphasize their leadership role in open architectures, secure interoperability, and rapid development and deployment of solutions. In the counter-UAS space, they believe their Air Shield high-power microwave technology outperforms competitors in range and lethality. For the Veterans Benefits exam business, they aim to serve more veterans faster and cheaper than competitors. They also highlight their unique MHS GENESIS expertise and their extensive network of healthcare providers.
Recent Performance & What The Market'S Focused On: Leidos reported a strong second quarter for fiscal year 2026, with revenue growing 7% year-over-year (4% organically) to a record $4.6 billion. Adjusted EBITDA margin was 13.8%, and operating cash flow reached a Q2 record of nearly $800 million. The company booked $5 billion in net awards, resulting in a 1.1 book-to-bill ratio. Leidos raised its full-year 2026 revenue guidance by $100 million at the midpoint, EPS guidance by $0.05, and operating cash flow guidance by $50 million. The market is focused on the continued execution of the NorthStar 2030 growth strategy, particularly the acceleration of the Defense Tech business and its double-digit growth trajectory. Investors are also closely watching the outcome of the VBA medical disability exam recompete and its potential impact on the Health segment's revenue and margins, though management has indicated that the current year's guidance fully reflects these changes. The company's strong free cash flow generation and capital deployment strategy, including share repurchases, are also key areas of market attention.

Revenue Segments And Estimated Mix: Intelligence and Digital — Mix: ~33%; Source: Existing knowledge (FY24/FY25 baseline); Trend: Maintained robust growth rate from Q1 2026.
Health — Mix: ~27%; Source: Existing knowledge (FY24/FY25 baseline); Trend: Contracted in Q2 2026 due to full incorporation of fourth vendor on VBA Medical Disability Examination Regions contract; expected to sustain Q2 levels for rest of year.
Defense — Mix: ~22%; Source: Existing knowledge (FY24/FY25 baseline); Trend: Accelerated to 6% organic growth in Q2 2026; expected to accelerate further and post high single-digit growth for the year, double-digit excluding airborne ISR.
Homeland — Mix: ~18%; Source: Existing knowledge (FY24/FY25 baseline); Trend: Led all segments with 32% total and 15% organic growth in Q2 2026.
Product Brands: MHS GENESIS
My Service Treatment Record
Parkade
LAVA software
IFPC (Integrated Air Defense and counter UAS programs)
AGM-190A (Sphere)
LCCM (Low-Cost Containerized Munitions)
ALPS (Airborne Low-Power System)
Skywire
QTC (QTC Management/Leidos QTC Health Services)
Air Shield (counter UAS technology)

Bull / Bear Details

Leidos is successfully accelerating its pivot to a high-margin 'National Security Company' by integrating advanced hardware production with software expertise.

Thesis

Leidos is successfully accelerating its pivot to a high-margin 'National Security Company' by integrating advanced hardware production with software expertise. Strong Q2 2026 results, raised full-year guidance, and significant defense tech wins (munitions, autonomous vessels, Golden Dome) validate this strategy. Despite near-term headwinds from the VA health recompete and government in-sourcing trends, the diversified portfolio, robust bookings, and focus on high-growth pillars position Leidos for sustained growth and profitability. Bullish. (Updated: 2026-08-12)

Bull case

Leidos's Defense segment is experiencing significant acceleration, with Q2 organic growth of 6% and a robust 2.2 book-to-bill ratio. Key wins include a $1 billion framework for 3,000 low-cost containerized munitions by 2030, positioning for the Navy's next-gen unmanned surface vessel, and sensor payloads for Golden Dome satellites. This validates the high-margin defense tech pivot.
The company raised its 2026 guidance for revenue, EPS, and operating cash flow, driven by strong performance in Homeland (32% total, 15% organic growth) and Intel/Digital segments. This diversification, coupled with record Q2 operating cash flow of nearly $800 million and a new share repurchase authorization, demonstrates financial strength and resilience.
Despite the suspension of VBA MDE incentive payments, Leidos is confident in its competitive position for the recompete, anticipating contract extensions into 2027. The Health segment is also expanding into new growth areas like the My Service Treatment Record pilot program, rural health, and behavioral health, leveraging its extensive network and technology.

Bear case

The VA's decision to suspend incentive payments for the VBA medical disability exam business for the remainder of 2026, coupled with the ongoing recompete uncertainty and the full incorporation of a fourth vendor, introduces near-term margin pressure and potential workshare reallocation in the Health segment.
A growing trend of government agencies seeking to in-source systems integration, as seen with MHS GENESIS, could limit Leidos's role in certain contracts. While Leidos aims to transition to higher-level mission integration, this trend could still impact contract scope and profitability, particularly in the Intel and Digital segments, which are vulnerable to CRs.
While Defense Tech production is accelerating, the rapid scaling required for programs like 3,000 low-cost containerized munitions by 2030 and the Navy's MUSV still carries inherent execution risks. Flawless supply chain management and facility scaling are critical to avoid delays, cost overruns, or margin compression in this capital-intensive shift.

Bull / Bear Case

Bear Case: The primary concern for Leidos lies in the Health segment, specifically the VBA Medical Disability Exam (MDE) recompete. The suspension of incentive payments for the remainder of 2026 and the full incorporation of a fourth vendor introduce near-term margin pressure and uncertainty regarding future workshare. A broader trend of government agencies seeking to in-source systems integration, as observed with MHS GENESIS, could limit Leidos's role and impact profitability in certain contracts, particularly within the Intel and Digital segments, which are also vulnerable to continuing resolutions. Furthermore, the strategic shift towards capital-intensive hardware production in defense tech, while promising, carries inherent execution risks related to flawless supply chain management and facility scaling for programs like munitions and unmanned vessels.
Bull Case: Leidos is demonstrating a successful pivot to a high-margin 'National Security Company,' driven by accelerating performance in its Defense segment, which saw 6% organic growth and a 2.2 book-to-bill ratio in Q2 2026. Key wins in defense tech, including a $1 billion framework for low-cost containerized munitions, positioning for the Navy's next-gen unmanned surface vessel, and Golden Dome sensor payloads, validate this strategy. The company raised its 2026 guidance for revenue, EPS, and operating cash flow, supported by robust Q2 operating cash flow of nearly $800 million and a new share repurchase authorization. Diversified growth in Homeland (15% organic growth) and Intel/Digital segments, alongside strategic expansion in Health into areas like My Service Treatment Record, further underpins sustained growth and financial resilience.
More Compelling & Why: Bull. The current P/E Ratio (TTM) of approximately 12.4x [6] is significantly below its historical averages and industry median, suggesting undervaluation. The company's accelerated Defense Tech growth, strong Q2 results, raised guidance, and robust free cash flow generation are compelling. A sustained and material decline in Defense segment organic growth or significant, unmitigated execution failures in key Defense Tech production programs would flip my view.

Key Factors5 rows

Key Factor	Why It Matters	What To Watch	What It Signals	Where/How To Track	Free Alt Data	Paid Alt Data
H2 2026 Revenue and Margin Acceleration & Full-Year Guidance Achievement	Leidos has raised its full-year 2026 guidance, anticipating significant revenue and adjusted EBITDA acceleration in the second half, driven by Defense and Homeland. Meeting or exceeding this guidance is vital for investor confidence and validating the NorthStar 2030 strategy.	Q3 2026 earnings report for total revenue, adjusted EBITDA margin, and non-GAAP diluted EPS. Specific organic growth rates for the Defense and Homeland segments. Any further revisions to the full-year 2026 guidance for revenue ($18.4 billion midpoint), EPS ($0.05 increase), and operating cash flow ($50 million increase).	Bullish: Q3 2026 results confirm the anticipated acceleration, with revenue growth and adjusted EBITDA margin meeting or exceeding expectations. Full-year 2026 guidance is reaffirmed or further raised. The 'rest of Leidos' (ex-VBA MDE) grows ~7% in revenue and ~19% in adjusted EBITDA.	Leidos' official press releases, SEC filings (10-Q), and Q3 2026 earnings conference call (expected late October/early November 2026).	Financial news outlets (e.g., Reuters, Bloomberg, Wall Street Journal) for earnings coverage and analyst consensus estimates.	FactSet/Refinitiv: Consensus estimates for revenue, EBITDA, and EPS for Q3 and full-year 2026. Bloomberg Terminal: Real-time news and financial data.
Free Cash Flow Performance & Share Repurchase Activity	Strong free cash flow generation is a hallmark of Leidos' business model and provides flexibility for capital deployment. Active share repurchases signal management's confidence in the company's valuation and can enhance shareholder returns.	Q3 2026 operating cash flow and free cash flow generation. Announcement of the resumption of share repurchases under the new Board authorization. Updates on gross leverage (currently 2.5x).	Bullish: Continued strong operating cash flow and free cash flow generation (e.g., exceeding Q2's record pace). Prompt initiation of share repurchases. Gross leverage maintained at or below 2.5x. Bearish: Significant decline in cash flow generation. Delay or lack of share repurchase activity. Increase in gross leverage.	Leidos' official press releases, SEC filings (10-Q), and Q3 2026 earnings conference call.	Financial news outlets for announcements of share repurchase programs or cash flow reports.	FactSet/Refinitiv: Historical and projected free cash flow, and share repurchase activity data. Bloomberg Terminal: Debt levels and leverage ratios.
AI-Driven Solutions & Cyber Pipeline Expansion (CoreWeave Partnership, My Service Treatment Record)	Leidos is strategically positioning itself as a leader in secure cloud, AI, and sovereign AI for national security. Progress in key AI initiatives and partnerships like CoreWeave, alongside expansion of its cyber capabilities, is critical for capturing high-value contracts and driving future growth.	Updates on the expansion and full deployment of the My Service Treatment Record pilot program across the Department of War and VA. Announcements of specific contracts or deployments stemming from the major partnership with CoreWeave for secure cloud and sovereign AI solutions. New contract wins within the broader cyber and AI pipeline.	Bullish: My Service Treatment Record moves beyond pilot phase to full deployment. Announcement of significant new cyber or AI-related contracts (e.g., >$100M) directly attributable to the CoreWeave partnership or other AI initiatives. Increased customer traction for Leidos' 'full-spectrum cyber' offerings.	Leidos' official press releases, SEC filings (8-K, 10-Q), future earnings conference calls, and joint announcements with partners like CoreWeave.	Google Trends: Search volume for 'Leidos AI,' 'CoreWeave government cloud,' 'sovereign AI defense.' USASpending.gov: Search for federal contract awards related to 'AI,' 'cybersecurity,' 'cloud computing' with Leidos as a prime or sub-contractor.	Burning Glass/LinkUp: Job postings for AI/cybersecurity roles at Leidos (indicating investment in talent). Gartner/IDC reports: Market trends and spending forecasts for government AI and cloud services.
Defense Tech Accelerated Procurement & Production Ramps (Munitions, MUSVs, Golden Dome Satellites)	Leidos' pivot to a 'Defense Tech' powerhouse relies on scaling hardware production and securing 'franchise' programs. Successful execution and new awards in these high-priority areas are crucial for double-digit revenue growth and profitability in the Defense segment.	Announcement of a potential production award in Q4 2026 for the Navy's next-generation medium unmanned surface vessel (MUSV). Outcome of the production readiness and scaling review for the low-cost containerized munitions (LCCM) framework agreement (scheduled for later this month). New contract awards from the $12 billion pipeline of Defense Tech opportunities over the next 12 months.	Bullish: Securing the Q4 2026 Navy MUSV production award. Positive outcome from the LCCM production readiness review, confirming on-track for 3,000 units by 2030. Announcement of significant new awards (e.g., >$100M) from the Defense Tech pipeline. Defense segment organic growth accelerates to double digits (excluding airborne ISR).	Leidos' official press releases, SEC filings (8-K, 10-Q), Department of War (DoW) and Navy announcements, and future earnings conference calls.	USASpending.gov: Search for DoW, Navy, or Space Development Agency (SDA) contract awards related to 'munitions,' 'unmanned surface vessels,' 'missile warning satellites,' or 'Golden Dome.' Defense News, Breaking Defense: Industry news and analysis.	GovWin IQ by Deltek: Detailed intelligence on DoW and Navy procurement, including specific program tracking. Thinknum: Job postings data for Leidos' Huntsville facilities (indicating manufacturing ramp-up).
VBA Medical Disability Exam (VBAMDE) Recompete & Incentive Payments	This contract is a significant revenue and profitability driver for the Health segment. The suspension of incentive payments and the upcoming recompete introduce uncertainty, making clarity on contract terms and workshare critical for future segment performance.	Release of the draft Request for Proposal (RFP) for the VBAMDE contract, followed by the formal RFP (expected 30-60 days after draft). Watch for announcements regarding extensions of the current domestic regions contract (up to 6 months) and predischarge/international work (1 year). Monitor Q4 2026 Health segment non-GAAP operating margins as a baseline for 2027.	Bullish: Formal RFP terms allow for sustained Health segment non-GAAP operating margins around 20% (Q4 2026 baseline) and retention of significant workshare. Successful extensions of current contracts are announced. Bearish: RFP terms significantly pressure margins below 20% or indicate a material reduction in Leidos' workshare.	Leidos' official press releases, SEC filings (10-Q, 8-K), future earnings conference calls, and the Department of Veterans Affairs (VA) procurement website. The next earnings call will likely provide updates.	USASpending.gov: Search for VA contract awards related to 'medical disability exams' or 'QTC Management'. Government Accountability Office (GAO) bid protest decisions. VA.gov: Official announcements or press releases related to procurement.	GovWin IQ by Deltek: Detailed intelligence on VA procurement opportunities and contract awards. Bloomberg Government: Analysis and data on federal contracting, including VA programs.

Key Reported Metrics, Reratings Triggers & Results3 rows

Robust organic growth in the Homeland segment, driven by energy and air traffic management, demonstrates successful diversification and helps offset challenges

Upcoming print · 2026-11-03

Key reported metrics
Metric	Last period	Why it matters
Homeland Segment Organic Growth	15%	Robust organic growth in the Homeland segment, driven by energy and air traffic management, demonstrates successful diversification and helps offset challenges in other areas, contributing to overall revenue acceleration.
Defense Segment Organic Growth	6%	This metric is critical for validating Leidos's pivot to a high-margin 'National Security Company' and the success of its defense tech investments. Accelerated growth here is key for future profitability.
Total Revenue	$4.6 billion (7% y/y growth, 4% organically)	Total Revenue growth signals the overall health of the company and the effectiveness of its NorthStar 2030 strategy. Meeting or exceeding raised guidance is crucial for investor confidence.

Last reported · 2026-08-04

Key reported metrics			Rerating thresholds			Earnings results
Metric	Last period	Why it matters	What's needed for rerating	Rerating context	Earnings date	Actual reported	Hit target?	Notes
Intelligence and Digital Revenues	6% organic growth (Q1 2026)	Accelerated organic growth and margin expansion in Intelligence and Digital validate Leidos' pivot to a high-margin 'National Security Company' leveraging AI. This segment is crucial for long-term profitability and competitive differentiation, and exceeding expectations here would drive a positive rerating by signaling strong execution and future earnings power.	Intelligence and Digital Revenues need to demonstrate organic growth of 10% or higher year-over-year, alongside continued non-GAAP operating margin expansion above the current 10.2%. This would signal successful execution of their AI-first strategy and capture of high-value contracts.	Accelerated organic growth and margin expansion in Intelligence and Digital validate Leidos' pivot to a high-margin 'National Security Company' leveraging AI. This segment is crucial for long-term profitability and competitive differentiation, and exceeding expectations here would drive a positive rerating by signaling strong execution and future earnings power.	2026-08-04	6% organic growth y/y (maintained from Q1 2026)	No	The Intelligence and Digital segment maintained its robust organic growth rate from Q1 2026, which was 6% year-over-year. This fell short of the rerating trigger's requirement for 10% or higher organic growth. The earnings transcript did not provide a specific non-GAAP operating margin for the Intelligence and Digital segment for Q2 2026, making it impossible to assess the margin expansion component of the trigger.
Adjusted EBITDA	+1.60% (YoY growth in margin)	An Adjusted EBITDA margin of 13.5% or higher would signal effective management of strategic investments and portfolio shifts, validating the 'high-margin National Security Company' thesis. This would alleviate investor concerns about near-term margin pressure, support a more favorable valuation, and reinforce confidence in the projected back-half 2026 acceleration.	Leidos Holdings, Inc. (LDOS) needs to report an Adjusted EBITDA margin of at least 13.5% for Q2 2026. This would exceed the cautious management outlook that Q2 will be the 'low point' for margins in 2026 and provide confidence in achieving or exceeding the full-year 2026 guidance of 'mid-thirteens' Adjusted EBITDA margin.	An Adjusted EBITDA margin of 13.5% or higher would signal effective management of strategic investments and portfolio shifts, validating the 'high-margin National Security Company' thesis. This would alleviate investor concerns about near-term margin pressure, support a more favorable valuation, and reinforce confidence in the projected back-half 2026 acceleration.	2026-08-04	13.8%	Yes	Leidos reported an Adjusted EBITDA margin of 13.8% for the second quarter of 2026, exceeding the rerating trigger of at least 13.5%. This performance was noted as 'best-in-class' and aligned with management's outlook that Q2 would be the 'low point' for margins, reinforcing confidence in achieving the full-year guidance.
Total Revenue	-3.6% (Q4 2025 y/y growth)	Hitting this threshold would validate Leidos's 'National Security Company' pivot and its ability to execute on strategic investments and acquisitions. It would signal that the anticipated back-half weighted acceleration is materializing, strengthening the long thesis by demonstrating sustainable top-line growth and improved competitive positioning, which is crucial for a positive rerating.	Total Revenue growth of at least 4% year-over-year in Q2 2026, demonstrating resilience despite being a 'low point' quarter, coupled with a reaffirmation of the high end of the full-year 2026 revenue guidance ($18.4 billion) and strong indications of accelerating organic growth towards double-digit year-over-year growth by year-end.	Hitting this threshold would validate Leidos's 'National Security Company' pivot and its ability to execute on strategic investments and acquisitions. It would signal that the anticipated back-half weighted acceleration is materializing, strengthening the long thesis by demonstrating sustainable top-line growth and improved competitive positioning, which is crucial for a positive rerating.	2026-08-04	$4.6 billion (7% y/y growth, 4% organically)	Yes	Leidos reported total revenue of $4.6 billion for Q2 2026, representing 7% year-over-year growth (4% organically), which surpassed the rerating trigger of at least 4% year-over-year growth. Furthermore, the company raised the midpoint of its 2026 revenue guidance by $100 million and the lower end by $200 million, indicating stronger performance than a mere reaffirmation. Management also expressed strong indications of accelerating organic growth towards double-digit year-over-year growth by year-end.

Key Questions

Can Leidos sustain its accelerated bookings momentum and deliver on its raised 2026 revenue and EPS guidance, particularly with double-digit organic growth proj

Can Leidos sustain its accelerated bookings momentum and deliver on its raised 2026 revenue and EPS guidance, particularly with double-digit organic growth projected for the Defense segment (excluding airborne ISR) heading into 2027?

Question 2: Will Leidos's reduced CapEx of approximately $250 million for 2026 still enable the successful scaling of its Defense Tech production programs (e.g., munitions, MUSVs) to drive margin acceleration, or will it impact the transition to a higher-margin hardware-led model?
Question 3: How will the upcoming VBA Medical Disability Exam (VBAMDE) recompete, including the suspension of incentive payments for 2026 and the anticipated contract extensions into early 2027, ultimately impact Leidos's workshare and its ability to sustain non-GAAP operating margins around 20% in the Health segment in 2027 and beyond?

Earnings Transcript Summary2 rows

2026-08-04 · 2026Q2 Earnings Call

3 Things Management Is Most Focused On	Call Takeaway & Tone	Prior Quarter'S Y/Y Growth By Segment	3 Things Analysts Most Pressed On (And Mgmt Responses)	Revenue Segments
3 Things Management Is Most Focused On1. Executing the NorthStar 2030 growth strategy: Management emphasized that the strategy is working, leading to meaningful growth in defense tech, energy, and cyber, and enabling them to raise full-year 2026 guidance. 2. Accelerating growth and strong performance in the Defense segment: Highlighted by a 2.2 book-to-bill ratio in Q2, major program wins (e.g., low-cost containerized munitions, Navy's next-generation medium unmanned surface vessel, missile warning satellites), and demonstrating unique 'One Leidos' capabilities in events like Operation Jailbreak. 3. Navigating changes and positioning for the future in the Health segment: Specifically addressing the VBA medical disability exam recompete and the MHS GENESIS program, while also leveraging unique expertise for new opportunities like the My Service Treatment Record pilot program.	Call Takeaway & ToneThe call's takeaway was that Leidos delivered a strong second quarter, exceeding expectations and leading to an upward revision of its full-year 2026 guidance for revenue, EPS, and operating cash flow. The company's NorthStar 2030 growth strategy is proving effective, with significant acceleration in the Defense and Homeland segments successfully offsetting headwinds in the Health business. Strategic investments in Defense Tech and diversification into areas like energy and cyber are driving future growth. The tone was confident and positive, with management expressing strong conviction in their strategy, execution, and the resilience of their diversified portfolio despite specific challenges in the Health segment.	Prior Quarter'S Y/Y Growth By SegmentIn Q1 2026, total revenue grew 4% year-over-year. Intelligence and Digital revenue increased 7% year-over-year, including 6% organic growth. Health revenue was unchanged from the prior-year quarter. Homeland revenue rose 6% year-over-year. Defense revenues were roughly flat year-over-year. Comparing Q2 to Q1, total revenue growth accelerated, Homeland's growth significantly accelerated, Defense's organic growth accelerated, Intel and Digital maintained its robust growth rate, and Health's revenue contracted after being unchanged.	3 Things Analysts Most Pressed On (And Mgmt Responses)1. DHMSM/MHS GENESIS and the trend of government agencies in-sourcing systems integration: Management acknowledged the trend but stated that Leidos's value transitions to higher-level mission systems integration, maintenance, and enhancement, as agencies still require partners due to capacity limitations. They expect to continue supporting the DHA and MHS GENESIS. 2. VBA recompete, suspension of incentive payments, and future margins in the Health business: Management confirmed incentive payments are suspended for 2026 due to administrative review but expects incentives to be part of future contracts, playing to Leidos's strengths in quality and timeliness. They indicated Q4 2026 performance would be a baseline for 2027 and that contract extensions are likely through early 2027. 3. Free cash flow trends and capital deployment (balancing growth investments, M&A, and share repurchases): Management highlighted record Q2 free cash flow and raised full-year guidance, emphasizing Leidos's low capital intensity. They reiterated a balanced capital allocation approach, noting M&A targets are currently expensive relative to Leidos's valuation, making share repurchases (with a new authorization) an attractive option.	Revenue SegmentsTotal revenue grew 7% year-over-year, 4% organically to a record $4.6 billion. Homeland led all segments with 32% total and 15% organic growth. Defense accelerated to 6% organic growth. Intel and Digital maintained its robust growth rate from Q1. Health segment revenues contracted.

2026-02-17 · 2025Q4 Earnings Call

3 Things Management Is Most Focused On	Call Takeaway & Tone	Prior Quarter'S Y/Y Growth By Segment	3 Things Analysts Most Pressed On (And Mgmt Responses)	Revenue Segments
3 Things Management Is Most Focused On1. North Star 2030 Strategy Execution: Realigning the organization into five sectors and four reporting segments to better serve growth pillars like Cyber, Energy, and Space. 2. Scaling Production Capacity: Tripling CapEx to $350M to expand facilities for high-priority programs including IFPIC, Maritime Autonomy, and Hypersonics. 3. Strategic M&A and Portfolio Shaping: Integrating Kudu Dynamics for cyber capabilities and the pending $2.4B acquisition of Entrust Solutions Group to lead in U.S. power engineering.	Call Takeaway & ToneThe takeaway is that Leidos is successfully transitioning from a pure services provider to a technology-led 'National Security Company' with significant hardware production upside. Despite Q4 revenue being masked by a government shutdown, record bookings (1.3x book-to-bill) and a $49B backlog suggest strong demand. The tone was highly confident and aggressive regarding internal investment for a 2027 breakout.	Prior Quarter'S Y/Y Growth By SegmentBased on Q3 FY2025 results: Total Revenue: +7.0%; National Security and Digital: +8.2%; Health and Civil: +5.1%; Commercial and International: +6.4%; Defense Systems: +11.3%. (Note: Q4 growth decelerated primarily due to the 6-week government shutdown and the lack of an extra work week compared to the prior year).	3 Things Analysts Most Pressed On (And Mgmt Responses)1. CapEx Ramp and Co-investment: Analysts questioned the tripling of CapEx; Management explained it is necessary to meet Department of War demand for production scaling and co-development of 'franchise' programs. 2. 2026 Growth Cadence: Analysts noted the slow start to 2026; Management responded that $7B in awards slipped from Q4 to Q1 due to the shutdown, creating a back-half weighted growth profile approaching double digits by year-end. 3. Health Segment Recompete (VA MDE): Analysts asked about the upcoming medical exam bid; Management emphasized their 60% backlog reduction track record and focus on rural/behavioral health to maintain >20% margins despite a new fourth vendor.	Revenue SegmentsTotal Revenue: -3.6% (Normalized for extra week and government shutdown: ~+4%); National Security and Digital: Strong underlying growth (unspecified percentage); Health and Civil: Down slightly for the quarter; Commercial and International: Growth (accounting for extra week); Defense Systems: Sustained robust growth driven by production phase on key programs.

Transcript Tidbits3 rows

2026-08-04

About Expanding Eligible Market	About Competition	About The Broader Industry	Where Things Are Headed	Updates On Theme	Broader Themes Emerging	Bullish-Leaning Quotes (Short)	Bearish-Leaning Quotes (Short)	Hiring
About Expanding Eligible MarketLeidos secured a $1 billion framework agreement with the Department of War for 3,000 low-cost containerized munitions by 2030, and is positioned for a potential production award in Q4 for the Navy's next-generation medium unmanned surface vessel. The company also won an award for sensor payloads for 18 missile warning and tracking satellites for Golden Dome. Leidos is leveraging MHS GENESIS expertise for the My Service Treatment Record pilot program, which is expected to be a significant future business driver. The Defense Tech business is expanding its growth engines to include munitions and counter-UAS capabilities, targeting an addressable market for low-cost containerized munitions exceeding $44 billion over the next decade. A major partnership with CoreWeave aims to position Leidos as a preferred provider of secure cloud, AI, and sovereign AI for the intelligence community and Department of War. The company also sees opportunities in transforming TSA and airport experiences, and plans to grow its managed health pillar by leveraging its rural health network and behavioral health presence.	About CompetitionLeidos emphasizes its 'One Leidos' capability, integrating hardware and software, products and services, to win in ways few competitors can match. The company demonstrated secure interoperability using open and documented standards on non-Leidos systems, addressing the issue of proprietary software vendor lock that prevents seamless battlefield understanding and command and control. While acknowledging the full incorporation of a fourth vendor in the VBA Medical Disability Examination Regions contract, Leidos believes its strengths will allow it to compete and win. Management noted that government agencies, while interested in in-sourcing, may lack the manpower to do all the work, suggesting continued partnership with integrators like Leidos.	About The Broader IndustryCustomer procurement activity is accelerating, with the administration keen to obligate funds before the November midterms. There's a growing trend across government agencies towards in-sourcing systems integration and acquiring commercial technology, driven by the administration's aspirations for fixed-price, outcome-based results. The appetite for trusted mission AI solutions is increasing, necessitating sovereign capabilities for intelligence agencies and the Department of War. The managed health market is projected to grow from $13 billion today to about $15 billion by 2030, with behavioral health and rural health segments expected to grow at CAGRs of 4.3% and 4.5% respectively, and the medical disability exam (MDE) business at 2% to 2.1%. While a government shutdown is not anticipated, a continuing resolution is expected after the midterms.	Where Things Are HeadedLeidos anticipates continued positive bookings momentum through the rest of the year, raising the midpoint of its 2026 revenue guidance by $100 million, EPS guidance by $0.05, and operating cash flow guidance by $50 million. The company expects the rest of Leidos (excluding VBA MDE changes) to grow approximately 7% in revenues and 19% in adjusted EBITDA in 2026. Health segment revenues are expected to sustain around Q2 levels for the rest of the year with non-GAAP OI margins around 20%. Defense growth is projected to accelerate to high single-digits for the year, and double-digits in 2026 (excluding airborne ISR business), indicating strong momentum into 2027. Free cash flow performance is expected to remain strong, with upward momentum. The draft RFP for the VBA recompete is expected soon, with formal bids likely by year-end and decisions early next year; an extension of the current domestic regions contract for up to 6 months and a one-year extension for predischarge and international work are anticipated. The Q4 performance of the VBA MDE business is seen as a good jumping-off point for 2027. Leidos is bullish on its Defense Tech business, with a $12 billion pipeline of opportunities in the next 12 months, and expects double-digit profitability and CAGR of revenue growth in this area.	Updates On ThemeIntegrators:	Broader Themes EmergingThe emergence of 'in-sourcing' trends across government agencies, a focus on 'fixed-price outcome-based results' in contracting, and the growing need for 'sovereign AI' capabilities for national security. Leidos reiterated its philosophy as a 'low capital intensity business' despite strategic investments. The company is also expanding its defense tech growth engines to include 'munitions and counter UAS capabilities'.	Bullish-Leaning Quotes (Short)“another strong quarter for Leidos.” “revenue grew 7% year-over-year, 4% organically to a record $4.6 billion.” “Adjusted EBITDA margin remained best-in-class at 13.8%.” “Operating cash flow reached a Q2 record of nearly $800 million” “booked $5 billion in net awards, delivering a solid 1.1 book-to-bill ratio.” “Customer procurement activity is beginning to accelerate.” “NorthStar 2030 growth strategy is working.” “raise the midpoint of our 2026 revenue guidance by $100 million, raise the midpoint of our EPS guidance by $0.05 and raise operating cash flow guidance by $50 million.” “Defense, our team delivered another exceptional quarter. Revenue growth accelerated, margins expanded and award velocity is accelerating.” “Defense posted a 2.2 book-to-bill ratio in the second quarter.” “continued confidence in this segment's robust business outlook” “truly positions us to lead in the defense tech of the future.” “performance during this hackathon is garnering us more and more customer interaction and customer traction.” “Demand for our VBA medical disability exam business remains strong through the second quarter” “well positioned to continue supporting both the DHA and MHS GENESIS.” “My Service Treatment Record pilot program... believe it can be a significant business driver for us in the future.” “strength and resilience of the Leidos portfolio and the value of our NorthStar 2030 Strategy.” “meaningful growth emerge across our defense tech, energy and cyber growth pillars.” “can once again raise our full year guidance.” “Bottom line performance remained strong. Adjusted EBITDA was $631 million for the second quarter for an adjusted EBITDA margin of 13.8%.” “Non-GAAP diluted earnings per share grew to $3.26” “generated $793 million of cash flows from operating activities and $761 million of free cash flow.” “Homeland led all segments with 32% total and 15% organic growth.” “Defense accelerated to 6% organic growth” “Intel and Digital maintained its robust growth rate from Q1, principally from strong intelligence community demand.” “Profitability increased significantly in Defense and Homeland from Q1 levels through strong program execution.” “ended the quarter with a very strong balance sheet. At quarter end, we had $6 billion of debt and $748 million of cash and cash equivalents. Gross leverage fell to 2.5x.” “enhancing our guidance for revenues, earnings and cash.” “diversifying the earnings power of the company, so we are able to raise guidance despite the VBA MDE changes” “on an organic basis, we expect the rest of Leidos to grow approximately 7% in revenues and 19% in adjusted EBITDA in 2026.” “Defense growth will accelerate and post high single-digit growth for the year. If you exclude the airborne ISR business... Defense will grow double digits in 2026, which is a better indicator of its launch point heading into 2027.” “extremely pleased with the Q2 numbers we just put up on free cash flow, a banner quarter best ever in the second quarter.” “trajectory on free cash flow performance will continue to be strong.” “This is a cash-generating business. It will continue to be a cash-generating business.” “good news there ahead of us as they complete some of those efforts.” “our philosophy as Leidos has never changed from being a low capital intensity business.” “growth pillars we've identified... will perpetuate a low capital intensity high cash return, high cash conversion business for Leidos that we expect to perpetuate into the future.” “you saw us repurchasing shares. You saw us re-up the share repurchase authorization.” “customer activity pick up. I think that's evident in our book-to-bill ratio this quarter.” “tremendous opportunity for us to now capitalize on those bookings to deliver revenue into the future.” “we are very bullish about our Defense Tech business.” “IFPC is now a program that is hitting its full stride in production” “small cruise missile has found great customer receptivity and the scaling in both the SOCOM and the U.S. Air Force is a conversation that is ongoing” “LCCM framework... moving along very adroitly. We're ticking off critical milestones.” “addressable markets that we're talking about here just for low-cost and containerized munitions is in excess of $44 billion over the next 10 years.” “we feel very good about hitting our stride on a number of engines in this defense tech business, which leads us to the bullish outlook that I talked about before and like Chris talked about in his prepared remarks of double-digit profitability, and we can start to see double-digit CAGR of revenue growth.” “our notes say that we have a $12 billion pipeline of visual opportunities in the next 12 months.” “we think that plays to our strengths. We think that means this will continue to be a viable, strong business for us in the future.” “we expect to continue to have our MDE business, which also is projected to grow at about 2%, 2.1% level.” “tremendous opportunity for us to grow into the future.” “strength of the portfolio is shining through the world overcoming then.” “massive platform at scale here that we can leverage for so much more in this domain.” “we've got our out here at Leidos and we're never going to stop working.” “we are in a reasonably good place from a right to win standpoint.” “we can play a very strong game in outcome-based contracting that delivers for the veteran, delivers for the taxpayer and delivers for our shareholders.” “we're very excited about the trajectory we've got going on here.” “robust nature of it is indicative of how positive we see about it in the future.” “growing our Huntsville workforce by leaps and bounds. We've grown that workforce by 13% from the beginning of this year and 33% of that is manufacturing people.”	Bearish-Leaning Quotes (Short)“VA has decided to suspend incentive payments for all vendors for the rest of this year.” “Health segment revenues contracted from the full incorporation of the fourth vendor on the VBA Medical Disability Examination Regions contract.” “in-sourcing across many government agencies right now.” “it's difficult to see that they can in-source it all and have the manpower necessary to do the whole work.” “cost is one concern the Veterans Administration has” “we do not yet have a draft RFP for the recompete” “they're running out of time as it's already August to adjudicate the proposal process.” “VBA MDE changes that layer in over the third and fourth quarters this year.” “airborne ISR business, which is in a transition phase” “M&A targets right now are very expensive, and our valuation is not.” “most vulnerable if there are some continued disruptions at year-end.”	HiringLeidos is growing its Huntsville workforce by 13% since the beginning of the year, with 33% of that growth in manufacturing roles. The company has also added additional talent in Health, including a new Growth Officer and a new Chief Product Officer.

2026-05-05

About Expanding Eligible Market	About Competition	About The Broader Industry	Where Things Are Headed	Updates On Theme	Broader Themes Emerging	Bullish-Leaning Quotes (Short)	Bearish-Leaning Quotes (Short)	Hiring
About Expanding Eligible MarketLeidos is expanding its market through the Entrust acquisition, which has already produced new opportunities like an energy generation plant RFP and detailed design for Canada's largest battery electrical storage facility, targeting a refreshed order pipeline of $10 billion, representing 230% growth. The joint venture with Analogic for the SES business aims to create a focused American leader in the critical global market of Homeland Defense. The Kudu acquisition has accelerated the use of AI technology for cyber mission software and operations, increasing the total cyber pipeline to $24 billion, a 21% increase since the acquisition. A multiyear $100 million venture stage investment in a marquee PE firm provides early access to high-growth disruptors in AI, advanced cyber, and autonomy. In Health, the Military OneSource award and My Service Treatment Record pilot program are expanding strategic entry points into the broader disability examinations mission and embedding Leidos into the mission's digital DNA. Managed health is identified as a growth pillar, with a focus on behavioral health and rural health. The Defense Tech portfolio has secured over $9 billion in awards in the last 15 months and anticipates another $8 billion in its next 12-month pipeline. The company is also pursuing accelerated procurement agreements, such as framework agreements, to field advanced products and capabilities in Defense.	About CompetitionLeidos' Air Shield high-power microwave counter UAS technology consistently outperforms all competitors in range and lethality. The company believes it can serve more veterans, faster, and cheaper than its competitors in the Veterans Benefits exam business. The Seahawk MUSV is noted as the U.S. Navy's first and only medium unmanned surface vehicle to reach operational deployment and customer confidence. While acknowledging the provisioning for the effects of a fourth vendor in the Veterans Benefits exam market, Leidos noted that its volumes are remaining high and robust.	About The Broader IndustryThe market is experiencing changing dynamics, requiring rapid adaptation and deployment of learnings to customers. There is a clear area of focus by the Department of War on Munitions. The U.S. Navy is adopting a marketplace acquisition approach for MUSVs and mission payloads. Demand for energy infrastructure services is expanding daily. AI is compressing the bottom of the solution value chain, making routine development, basic analytics, and data integration easier. As AI increases the clock speed of mission execution, risk grows, strengthening Leidos' position as trusted mission AI experts. Intelligence Community (IC) budgets in America have grown 4% to 5% annually since 2022 and are expected to continue this trend, with significant investment in digital infrastructure. Procurement is still recovering from a protracted government shutdown. The market is perceived to be taking a more skeptical view of growth potential in services compared to products.	Where Things Are HeadedThe NorthStar 2030 growth strategy is in full swing, setting the stage for a multiyear growth trajectory. Leidos plans to increase investments in its five growth pillars: Defense Tech, managed health, digital infrastructure and cyber, energy resilience, and mission software. The company aims to become faster, leaner, and more focused, emphasizing speed. It will leverage its scale through technology insertion and learning across the entire business. A clear path to production runs of thousands of small cruise missiles (AGM-190A) is anticipated within this decade. Awards are expected to pick up significantly over the course of the year. Q2 is projected as the likely low point for revenue growth and margin, with growth building in Q3 and Q4 and carrying momentum into 2027. The long-term outlook for the Health business is bullish, with expectations of maintaining its leading role in serving veterans and expanding into digital ecosystems, behavioral health, and rural health. The elevated CapEx is a fixed, finite period of investment, not anticipated to continue perpetually.	Updates On ThemeData	Broader Themes EmergingThe concept of 'co-investment framework agreements' is emerging, where industry and the Department of War share R&D costs for franchise programs, as implied by Leidos' pursuit of accelerated procurement agreements.	Bullish-Leaning Quotes (Short)Today, I am pleased to report a very strong start for Leidos in 2026. Leidos is built to thrive. Execution of our NorthStar 2030 growth strategy is now in full swing. We are raising our 2026 guidance for revenue by $500 million. All in all, we can clearly see a path to production runs of thousands of these products in this decade alone. In total, we've earned over $9 billion of awards for our Defense Tech business in the last 15 months alone. Leidos' full-spectrum cyber capacity is delivering against surging demand. Integration is ahead of schedule, the cultural alignment is seamless, and the financial upside is already surfacing. Leidos is out of the blocks in 2026 playing offense. Leidos is a cash machine. We remain extremely bullish on the long-term outlook for the business.	Bearish-Leaning Quotes (Short)Changes in estimates at completion were a modest headwind in the quarter. Q2 as the likely low point this year in revenue growth and margin. Procurement is still recovering from the protracted government shutdown. Defense non-GAAP operating margin was 8.3% compared to 9.8% in the prior year quarter. While it's a little lumpy this year, it's not dimming our outlook on the year as a whole.	HiringAI is compressing the bottom of the solution value chain, which frees up highly specialized talent to focus on higher-value activities.

2026-02-17

About Expanding Eligible Market	About Competition	About The Broader Industry	Where Things Are Headed	Updates On Theme	Broader Themes Emerging	Bullish-Leaning Quotes (Short)	Bearish-Leaning Quotes (Short)
About Expanding Eligible MarketLeidos is significantly expanding its footprint in the energy sector through the $2.4 billion acquisition of Entrust Solutions Group, aiming to become a 'power engineering and design leader in the U.S.' The company is also targeting new growth in 'rural care' and 'behavioral and integrated health' within its Health segment. Strategic entry into exquisite cyber markets was noted via the Kudu Dynamics acquisition, which is providing 'entry into new markets.' Additionally, the company is tripling its CapEx to $350 million to expand production capacity for high-priority national security programs like IFPIC and maritime autonomy.	About CompetitionManagement expressed a strong intent to 'further separate from the pack in 2027' and 'accelerate away from the pack' in the Health business. While acknowledging the 'entry of the fourth vendor' on the VA medical exam (VBAMDE) work, Leidos remains confident in its 'takeaway win rate' and its ability to 'sharpen the pencil' to maintain profitability. The acquisition of Entrust is specifically designed to 'increase our competitiveness' in the high-growth energy engineering market.	About The Broader IndustryThe industry faced significant headwinds from the 'longest U.S. government shutdown' and the complexities of 'Doge' (Department of Government Efficiency) early in the year. There is a structural shift toward a 'new kind of national security company' that integrates cutting-edge hardware and software. The administration is increasingly looking for partners willing to 'co-invest' and put 'money behind their technical prowess,' moving away from traditional maintenance toward 'high value mission outcomes.'	Where Things Are HeadedLeidos is in 'strategy execution mode' for its North Star 2030 plan, with a 'strong bias for velocity.' Revenue growth is expected to build throughout 2026, ending with 'sustained momentum approaching double digits' by year-end. The company is realigning into five sectors (Defense, Homeland, Intelligence, Digital Modernization, Health) to better match administration priorities. Future capital deployment will prioritize 'inorganic and organic investments' over share repurchases in the near term to fuel growth pillars.	Updates On ThemeEU	Broader Themes EmergingEmergence of 'co-investment framework agreements' where industry and the Department of War share R&D costs for franchise programs; 'Rural Health Transformation' as a national priority; 'Energy Infrastructure Resilience' as a key component of homeland security.	Bullish-Leaning Quotes (Short)2026 will be the year that traction from our strategic action becomes even more evident.; Our year-over-year funded backlog is up 15%.; We are redefining what it means to be a national security company.; We will triple our capital expenditure investments this year to $350,000,000.	Bearish-Leaning Quotes (Short)Six-week government shutdown in 2025.; Modestly lower revenue and margin from the additional vendor on the VBAMDE work.; Extra work week is about twice as impactful as the shutdown.; Some high-margin airborne programs ebb.

Notes2 rows

Date	Comment	Comment Type	Comment Sentiment	Link	Price Reaction
2026-02-17	Leidos reported a strong FY2025 finish, exceeding guidance with a 1.3x book-to-bill ratio. However, the market reacted with caution to conservative FY2026 guidance, which anticipates margin normalization and a tripling of CapEx to $350M for strategic investments. While the $2.4B Entrust acquisition and 'Golden Dome' prospects offer long-term upside, the near-term focus remains on execution during organizational realignment and increased spending.	Earnings Transcript	Neutral	https://investors.leidos.com/investor-relations	N/A
2026-08-04	Leidos reported strong Q2 2026 results, exceeding expectations with 7% revenue growth and record operating cash flow. Management raised full-year guidance, driven by accelerating Defense and Homeland segments, validating its "National Security Company" pivot. The stock surged 6.85% (t+2 days), significantly outperforming SPY, indicating strong market confidence in Leidos's strategy and future despite Health segment headwinds.	Earnings Transcript	Positive		+6.85% (vs SPY: +5.41%)

Upcoming EventsTable

Catalyst ID	Estimated Timing	Estimated Date Start	Estimated Date End	Catalyst	Why It Matters	Ticker Or Theme Specific	Transcript Date	Source Type
LDOS_bbe4efd3	Q4	2026-10-01	2026-12-31	Potential production award for the Navy's next-generation medium unmanned surface vessel (MUSV).	This would solidify Leidos' position in autonomous maritime systems, a key growth area for defense tech, and contribute to future revenue and strategic positioning.	Ticker	2026-08-04	earnings_transcript

Prior Earnings Metrics HistoryTable

Prior earnings scorecards