LDOS · Leidos Holdings, Inc.

Leidos delivered robust Q1 FY2026 performance with revenues of $4.4 billion, up 4% year-over-year including 3% organic growth, driven by heightened customer demand for innovative products in Intelligence, commercial energy infrastructure, and domestic/international air traffic management. Despite GAAP net income declining 8% to $335 million due to $39 million in one-time costs from the Entrust acquisition and pending security products joint venture, non-GAAP metrics showed strength: adjusted EBITDA rose 2% to $614 million, and non-GAAP diluted EPS increased 5% to $3.13, supported by prudent cost management, strong award fee performance, and a $15 million insurance reimbursement. CEO Tom Bell highlighted proactive customer collaboration for mission outcomes and execution of the NorthStar 2030 strategy via the quick Entrust close and joint venture signing, positioning 2H 2026 as a multiyear growth launchpad. The company raised FY2026 guidance across key metrics, reflecting confidence: revenues now $18.00-$18.40 billion (prior $17.50-$17.90B), non-GAAP EPS $12.10-$12.50 (prior $12.05-$12.45), and operating cash flow ~$1.80 billion (prior ~$1.75B). Notable awards included $869M U.S. Army MACRO II for AI-enabled systems, $461M DISA cyber task orders, $335M NSA TechSIGINT, and $284M SEC ISS2, contributing to $3.3 billion bookings and $48.4 billion backlog. Cash generation remained solid at $301 million operating cash flow, with $270 million free cash flow post-$31 million capex; Entrust was financed via $1.4 billion senior notes and $300 million commercial paper. Capital returns continued with $243 million share repurchases and a $0.43/share dividend declared, payable June 30.