Leidos tops Q3 profit estimates but misses on revenue

Leidos Holdings (LDOS) said on Nov. 3, 2026, that adjusted earnings for its fiscal third quarter were $3.62 per share, above the $3.09 consensus estimate. Revenue was $4.63 billion, below the $4.81 billion estimate.

Revenue rose 4% from a year earlier, the company said in its press release, on higher customer demand for defense technology, air traffic management and intelligence mission support. The acquisition of ENTRUST Solutions also contributed.

Chief Executive Officer Tom Bell said: "Leidos delivered another quarter of strong financial performance, allowing us to enhance our 2026 guidance for the third consecutive quarter."

Here's how the company did:

• Adjusted EPS: $3.62 vs. $3.09 expected
• GAAP diluted EPS: $3.28 vs. $2.82 a year earlier
• Revenue: $4.63 billion vs. $4.81 billion expected, up from $4.47 billion a year earlier
• Net income: $413 million vs. $369 million a year earlier

2026 guidance

On Oct. 5, the company closed its joint venture with Altaris, contributing its Security Enterprise Solutions and Industrial Automation businesses. After adjusting for the joint venture, the company set its fiscal 2026 revenue forecast at $18.00 billion to $18.20 billion, from $18.20 billion to $18.40 billion.

The company raised its non-GAAP diluted EPS forecast to $12.50 to $12.70, from $12.20 to $12.50. It expects operating cash flow of approximately $1.90 billion, up from approximately $1.85 billion. The adjusted EBITDA margin forecast is unchanged at the mid 13% range.

Segment results

Intelligence & Digital revenue rose 1% to $1.55 billion, and its operating margin was 11.1%, compared with 9.2% a year earlier.

Health revenue fell 12% to $1.07 billion. Its operating margin was 22.5%, compared with 26.8% in the prior year quarter.

Homeland revenue rose 32% to $1.02 billion. The segment included $142 million from ENTRUST Solutions, and its operating margin was 7.9%.

Defense revenue rose 3% to $992 million, led by demand for air defense, sensing and C5ISR systems.

Cash, backlog and dividend

Operating cash flow was $523 million, and free cash flow was $476 million. Leidos repurchased $504 million of its stock during the quarter.

Backlog reached $49.6 billion, of which $11.1 billion was funded.

The board declared a dividend of 45 cents per share, an increase of 4.7% over the prior quarter's dividend. It is payable on Dec. 31 to holders of record on Dec. 15.