Leidos delivers strong Q1 results, raises full-year guidance

Leidos this morning reported strong Q1 financial results, highlighting the company’s accelerating momentum under its NorthStar 2030 strategy and an increased full-year outlook for revenue, earnings and cash flow. 

First quarter revenue was up 4% year-over-year to $4.4 billion and profitability remained excellent, with adjusted earnings before interest, depreciation, taxes and amortization (EBITDA) margin at 14 percent on a non-GAAP basis.

“Together, these Q1 numbers represent another proof point that Leidos is built to thrive,” said CEO Tom Bell.

With that performance in the books, Bell and CFO Chris Cage told Wall Street this morning the company is raising its 2026 guidance:

• Revenue guidance increased by $500 million for a new range of $18.0 billion to $18.4 billion.

• Non-GAAP diluted EPS guidance increased by $0.05 for a new range of $12.10 to $12.50.

• Operating cash flow guidance increased by $50 million to approximately $1.80 billion.

The details of the company’s Q1 results can be found here.

Bell also reiterated the company’s core strategic principles. First, Leidos is increasing its investments in its five growth pillars, where it sees robust revenue growth to deliver superior top and bottom-line results. Second, Leidos is continuing to make itself faster, leaner and more focused to ensure speed is central to how it operates. And third, Leidos is leveraging its scale through technology insertion and enterprise-wide learning.

Across its sectors, Bell said Leidos is winning in large part thanks to alignment with national priorities. During the first quarter, Leidos Defense began production under its $2.2 billion Air Base Air Defense System – Missile Defense (ABADS-MD) contract to deliver persistent, wide-area awareness at a fraction of the legacy cost. The sector also conducted another successful flight test of its Small Cruise Missile and engaged with the Department of War on a pending munitions framework agreement.

In total, Leidos has won more than $9 billion in its defense tech business over the last 15 months, with another $8 billion envisioned in the next twelve-month pipeline.

Leidos Health recently brought in the $456 million Military OneSource program, which applies predictive analytics from the Military and Family Life Counseling program to help the Pentagon shift from reactive care to proactive force readiness. Leidos Health also secured a first-of-its kind award for a pilot program called My Service Treatment Record, under which the company will develop an AI-driven tool to automate medical record transfer from the Department of War to the Department of Veterans Affairs.

“Together, these wins and our robust ongoing business give us confidence in our Health Growth Pillar and its sustainable growth through this decade," Bell said. 

Bell also provided an update on three substantial portfolio moves Leidos has undertaken this year aligned with NorthStar 2030:

• Leidos is strengthening its homeland defense position through an agreement to combine its Security Enterprise Solutions business into a joint venture with Analogic, creating a focused American leader in a critical global market.

• Leidos is continuing to see strong traction from its acquisition of Kudu Dynamics, allowing the company to accelerate its use of AI to deliver cyber mission software and operations with unprecedented velocity. Since the acquisition, Bell said the company’s total cyber pipeline has grown to $24 billion, a 21 percent increase.

• Leidos closed its acquisition of ENTRUST Solutions Group just two months after announcement, setting the company up to continue to deliver for its customers at a time when demand for energy infrastructure services is expanding every day. Leidos is targeting a refreshed order pipeline of $10 billion, representing a growth of 230 percent.

Bell also revealed a $100 million Leidos investment in a marquee private equity firm that will give the company early access to high-growth disruptive technologies.

“By continuing to be at the forefront of technological breakthroughs of all types, we ensure our customers have the technology they need tomorrow, integrated into the Leidos growth pillars today,” Bell said.

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_{Certain statements in this release contain or are based on "forward-looking" information within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by words such as "expects," "intends," "plans," "anticipates," "believes," "estimates," "guidance" and similar words or phrases. Forward-looking statements in this release include, among others, estimates of our future growth, strategy and financial and operating performance, including future revenues, adjusted EBITDA margins, diluted EPS (including on a non-GAAP basis) and cash flows provided by operating activities, as well as statements about our business contingency plans, government budgets and spending, uncertainties in tax due to new tax legislation or other regulatory developments, strategy, planned investments including the pending joint venture, sustainability goals and our future dividends, share repurchases, capital expenditures, debt repayments, acquisitions, dispositions and cash flow conversion. These statements reflect our belief and assumptions as to future events that may not prove to be accurate.} 

_{Actual performance and results may differ materially from those results anticipated by our guidance and other forward-looking statements made in this release depending on a variety of factors, including, but not limited to: developments in the U.S. government defense and non-defense budgets, including budget reductions, sequestration, implementation of spending limits or changes in budgetary priorities, continuation of the U.S. government shutdown and other or future delays in the U.S. government budget process, or the U.S. government’s failure to raise the debt ceiling, which increases the possibility of a default by the U.S. government on its debt obligations, related credit-rating downgrades, or an economic recession; uncertainties in tax due to new tax legislation or other regulatory developments; deterioration of economic conditions or weakening in credit or capital markets; uncertainty in the consequences of current and future geopolitical events; inflationary pressures and fluctuations in interest rates; delays in the U.S. government contract procurement process or the award of contracts and delays or loss of contracts as a result of competitor protests; changes in U.S. government procurement rules, regulations and practices; our compliance with various U.S. government and other government procurement rules and regulations; governmental reviews, audits and investigations of our company; our ability to effectively compete and win contracts with the U.S. government and other customers; our ability to respond rapidly to emerging technology trends, including the use of artificial intelligence; our reliance on information technology spending by hospitals/healthcare organizations; our reliance on infrastructure investments by industrial and natural resources organizations; energy efficiency and alternative energy sourcing investments; investments by U.S. government and commercial organizations in environmental impact and remediation projects; the effects of an epidemic, pandemic or similar outbreak may have on our business, financial position, results of operations and/or cash flows; our ability to attract, train and retain skilled employees, including our management team, and to obtain security clearances for our employees; our ability to accurately estimate costs, including cost increases due to inflation, associated with our firm-fixed-price contracts and other contracts; resolution of legal and other disputes with our customers and others or legal or regulatory compliance issues; cybersecurity, data security or other security threats, system failures or other disruptions of our business; our compliance with international, federal, state and local laws and regulations regarding privacy, data security, protection, storage, retention, transfer, disposal and other processing, technology protection and personal information; the damage and disruption to our business resulting from natural disasters and the effects of climate change; our ability to effectively acquire businesses and make investments; our ability to maintain relationships with prime contractors, subcontractors and joint venture partners; our ability to manage performance and other risks related to customer contracts; the failure of our inspection or detection systems to detect threats; the adequacy of our insurance programs, customer indemnifications or other liability protections designed to protect us from significant product or other liability claims, including cybersecurity attacks; our ability to manage risks associated with our international business; our ability to comply with the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act of 2010 and similar worldwide anti-corruption and anti-bribery laws and regulations; our ability to protect our intellectual property and other proprietary rights by third parties of infringement, misappropriation or other violations by us of their intellectual property rights; our ability to prevail in litigation brought by third parties of infringement, misappropriation or other violations by us of their intellectual property rights; our ability to declare or increase future dividends based on our earnings, financial condition, capital requirements and other factors, including compliance with applicable law and our agreements; our ability to grow our commercial health and infrastructure businesses, which could be negatively affected by budgetary constraints faced by hospitals and by developers of energy and infrastructure projects; our ability to successfully integrate acquired businesses; and our ability to execute our business plan and long-term management initiatives effectively and to overcome these and other known and unknown risks that we face.}

_{These are only some of the factors that may affect the forward-looking statements contained in this release. For further information concerning risks and uncertainties associated with our business, please refer to the filings we make from time to time with the U.S. Securities and Exchange Commission (SEC), including the "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Legal Proceedings" sections of our latest Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, all of which may be viewed or obtained through the Investor Relations section of our website at www.leidos.com.} 

_{All information in this release is as of May 5, 2026. Leidos expressly disclaims any duty to update the guidance or any other forward-looking statement provided in this release to reflect subsequent events, actual results or changes in Leidos' expectations. Leidos also disclaims any duty to comment upon or correct information that may be contained in reports published by investment analysts or others.} 

_{This release includes financial information prepared in accordance with accounting principles generally accepted in the United States ("GAAP"). This presentation also includes non-GAAP financial information, including adjusted EBITDA margin which should be considered supplemental to, not a substitute for, or superior to, the financial measure calculated in accordance with GAAP. The Company believes that these non-GAAP financial measures provide users of our financial information with useful supplemental information that enables a better comparison of our performance across periods. There are a number of limitations related to the use of these non-GAAP financial measures and their nearest GAAP equivalents. For example, the Company’s definitions of non-GAAP financial measures may differ from non-GAAP financial measures used by other companies. For a description of the non-GAAP financial information included herein, and reconciliations to the most directly comparable GAAP measure, see our earnings release.}