Leidos (LDOS) investor relations material

Executive summary

• Q1 2026 revenue rose 4% year-over-year to $4.4 billion, with adjusted EBITDA margin at 14%, driven by robust demand, program wins, and acquisitions including ENTRUST and Kudu Dynamics.

• Non-GAAP diluted EPS increased 5% to $3.13, while net income declined 8–9.6% to $328–$335 million due to acquisition and JV costs.

• Raised 2026 guidance for revenue, non-GAAP EPS, and operating cash flow, reflecting confidence in multiyear growth and successful ENTRUST integration.

• Strategic focus on digital infrastructure, AI, and growth through acquisitions and joint ventures.

• Company realigned into four reportable segments: Intelligence & Digital, Health, Homeland, and Defense.

Financial highlights

• Revenues reached $4.4 billion, up 4% total and 3% organically year-over-year.

• Adjusted EBITDA was $614 million, up 2% year-over-year, with a 14% margin.

• Non-GAAP diluted EPS grew 5% to $3.13; GAAP diluted EPS was $2.56.

• Operating cash flow was $301 million; free cash flow was $270 million.

• Ended Q1 with $6.3 billion in debt, $457 million in cash, and a gross leverage ratio of 2.6x.

Outlook and guidance

• 2026 revenue guidance raised to $18.0–$18.4 billion, with non-GAAP EPS guidance at $12.10–$12.50 and operating cash flow at ~$1.8 billion.

• Adjusted EBITDA margin guidance maintained at mid-thirteens percent.

• Q2 expected to be the low point for revenue and margin, with growth and margin expansion anticipated in the second half of 2026.

• 62% of $19 billion in remaining performance obligations expected to be recognized as revenue in the next 12 months.

• Management anticipates meeting liquidity needs through operations, cash balances, and available credit.