Leidos Raises 2026 Profit And Cash-Flow Guidance A Third Time, Trims Revenue Range After Joint Venture
Leidos now sees adjusted EPS of $12.50 to $12.70 and revenue of $18.00 billion to $18.20 billion after the Altaris venture closed.
Leidos, which provides science, engineering and technology services mostly to government agencies, raised its 2026 adjusted earnings and operating cash flow outlook while cutting its revenue range, the company said in third-quarter results released Tuesday. It was the third straight quarter of improved guidance, and the lower revenue range reflects the joint venture it closed with Altaris.
Guidance up on profit, down on sales
Leidos now expects non-GAAP (adjusted) diluted earnings per share of $12.50 to $12.70, up from $12.20 to $12.50. Operating cash flow is forecast at about $1.90 billion, versus about $1.85 billion before.
Revenue guidance fell to $18.00 billion to $18.20 billion from $18.20 billion to $18.40 billion. On October 5, Leidos closed its deal with Altaris, contributing its Security Enterprise Solutions and Industrial Automation businesses to a new joint venture, and the company adjusted the outlook for that. The adjusted EBITDA margin forecast stayed at the mid-13% range.
CEO Tom Bell said the quarter allowed Leidos to "enhance our 2026 guidance for the third consecutive quarter."
Homeland surges, Health shrinks
Third-quarter revenue rose 4% to $4.63 billion. Net income was $413 million, or $3.28 per diluted share, against $369 million and $2.82 a year earlier. Adjusted diluted EPS rose 19% to $3.62, and adjusted EBITDA was $644 million, a 13.9% margin.
Homeland revenue jumped 32% to $1.02 billion, including $142 million from the ENTRUST Solutions acquisition and strong demand for air traffic management work. Health revenue fell 12% to $1.07 billion on expected program shifts and lower volumes in managed health services. Defense rose 3% to $992 million, and Intelligence & Digital rose 1% to $1.55 billion.
Operating cash flow was $523 million and free cash flow was $476 million, down from $711 million and $680 million a year earlier.
Buybacks and a record backlog
Leidos returned $556 million to shareholders in the quarter, including $504 million of share repurchases and $52 million in dividends. It ended the period with $630 million in cash and $6.0 billion of debt.
Net bookings were $5.5 billion, a book-to-bill ratio of 1.2, lifting backlog to $49.6 billion, of which $11.1 billion was funded. Big awards included a $717 million Air Force intelligence support contract and a $672 million TSA security equipment deployment contract.
The board declared a quarterly dividend of $0.45 per share, up 4.7% from the prior quarter, payable December 31 to holders of record on December 15.
Management discusses the quarter on an 8 a.m. ET conference call Tuesday.
Sources
- 8-K Filing — Leidos Holdings, Inc. (LDOS) — SEC EDGAR
- Exhibit ldos100226q3pressreleaseex.htm — Leidos Holdings, Inc. 8-K exhibit — SEC EDGAR
- Leidos Holdings (LDOS) Lands Pentagon Deals As Fair Value Still Sits Higher — Yahoo Finance
