Leidos Holdings Inc. (NYSE:LDOS) reported second-quarter 2026 results that comfortably exceeded Wall Street expectations, prompting the defence and technology contractor to raise its financial outlook for the full year.
The stronger-than-expected performance sent the company’s shares 6.4% higher in pre-market trading.
Earnings and Revenue Surpass Expectations
Leidos posted adjusted earnings of $3.26 per share for the second quarter, beating the analyst consensus estimate of $2.91 by $0.35.
Revenue increased 7% year over year to $4.56 billion, exceeding market expectations of approximately $4.44 billion.
The company said the growth was driven by rising demand for defence technology solutions, energy infrastructure projects, air traffic management systems and intelligence support services.
Company Raises 2026 Outlook
Following the strong quarterly performance, Leidos increased its fiscal 2026 revenue guidance to between $18.20 billion and $18.40 billion, compared with its previous forecast of $18.00 billion to $18.40 billion.
The midpoint of the revised range, $18.30 billion, is slightly above the current analyst consensus estimate of approximately $18.24 billion.
Management also raised its adjusted earnings per share guidance to between $12.20 and $12.50, up from its previous range of $12.10 to $12.50. The midpoint of $12.35 is marginally ahead of analyst expectations.
CEO Highlights Strong Contract Momentum
Chief Executive Officer Tom Bell said the company continued to build momentum across several key growth areas.
“I’m pleased to report another strong quarter for Leidos,” said Chief Executive Officer Tom Bell. “In addition to achieving milestones for revenue and cash, we booked $5 billion of contract awards. We’re seeing meaningful growth emerge across our Defense Tech, Energy Infrastructure, and Cyber growth pillars.”
Cash Flow and Backlog Continue to Strengthen
Leidos generated $793 million in operating cash flow during the quarter, while free cash flow totalled $761 million.
The company secured $4.9 billion in net bookings, resulting in a book-to-bill ratio of 1.1. Total backlog increased to $48.7 billion, providing strong visibility into future revenue.
Acquisition Costs Weigh on GAAP Profit
GAAP net income declined to $356 million, or $2.81 per diluted share, from $393 million, or $3.01 per share, in the same period last year.
The decrease was primarily attributed to $29 million in acquisition-related expenses and restructuring costs.
Adjusted EBITDA came in at $631 million, compared with $647 million a year earlier, while the adjusted EBITDA margin eased to 13.8% from 15.2%.
Leidos also increased its fiscal 2026 operating cash flow guidance to approximately $1.85 billion, up from its previous forecast of $1.80 billion.
Leidos Holdings stock price
