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LDOS Q1 Earnings Beat on Backlog Scale and Key Contract Wins
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Key Takeaways
LDOS posted Q1 non-GAAP EPS of $3.13 and revenues of $4.40B, beating consensus estimates.
Backlog ended at $48.4B, led by Intelligence & Digital at $19.34B and Defense at $12.59B.
LDOS raised 2026 guidance to $18.0-$18.4B revenues and $12.10-$12.50 non-GAAP EPS.
Leidos Holdings, Inc. (LDOS - Free Report) reported first-quarter 2026 non-GAAP earnings of $3.13 per share, beating the Zacks Consensus Estimate of $2.88 by 8.68%. The metric increased 5.4% from $2.97 in the year-ago quarter.
On a GAAP basis, earnings per share were $2.56, down from $2.77 a year ago. Management attributed the year-over-year decline in GAAP results to discrete costs tied to the Entrust acquisition and the pending joint venture involving security-related businesses.
LDOS' Total Revenues
Total revenues came in at $4.40 billion, up 3.7% year over year and above the Zacks Consensus Estimate of $4.27 billion by 3.1%. The company said revenues increased on higher customer demand, particularly across Intelligence programs, commercial energy infrastructure work and domestic and international air traffic management systems.
Demand signals were mixed in the quarter. Net bookings totaled $3.3 billion, translating into a book-to-bill ratio of 0.8, even as management highlighted a trailing-12-month book-to-bill of 1.1 that supported year-over-year growth in contracted activity.
Leidos Holdings, Inc. Price, Consensus and EPS Surprise
Backlog at quarter-end was $48.4 billion, including $9.6 billion funded and $38.8 billion unfunded. The company noted that the funded portion reflects contract value supported by appropriated funding (net of revenues previously recognized), while unfunded backlog includes remaining task-order value and options expected to be executed.
By segment, Intelligence & Digital backlog totaled $19.34 billion, Health was $6.56 billion, Homeland was $9.88 billion and Defense was $12.59 billion. Backlog as of April 3, 2026, also included $371 million acquired through the Entrust acquisition within the Homeland segment.
Operational Statistics of LDOS
Cost of revenues totaled $3.64 billion compared with $3.49 billion in the prior-year quarter. Selling, general and administrative expenses were $223 million compared with $230 million a year ago, while acquisition, integration and restructuring costs increased to $35 million from $4 million.
Operating income was $508 million, down from $530 million in the year-ago period. Interest expense rose to $55 million from $49 million.
Leidos’ Segmental Performance
Intelligence & Digital revenues rose to $1.51 billion from $1.41 billion, supported by recent contract awards and higher volumes for Intelligence Community mission support, along with $22 million of acquisition revenues tied to Kudu Dynamics. Non-GAAP operating margin increased to 10.2% from 9.7%.
Health revenues were $1.19 billion, unchanged year over year. Non-GAAP operating margin was 24.2% compared with 24.7% a year ago.
Homeland revenues increased to $816 million from $770 million, driven primarily by continued demand for Energy Infrastructure engineering services and domestic and international air traffic control systems. Non-GAAP operating margin decreased to 8.5% from 9.4% amid changing customer requirements on a fixed-price program.
Defense revenues were $883 million compared with $879 million a year ago, as strong growth in integrated air defense systems offset the wind-down of certain airborne surveillance programs. Non-GAAP operating margin decreased to 8.3% from 9.8%, primarily due to schedule delays on a fixed-price development program.
LDOS’ Financials
Cash and cash equivalents were $457 million at quarter-end, down from $1.11 billion as of Jan. 2, 2026. Long-term debt, net of the current portion, increased to $6.01 billion from $4.63 billion over the same period, reflecting acquisition financing activity.
Net cash provided by operating activities totaled $301 million for the quarter, up from $58 million in the prior-year period. The company also returned capital to shareholders during the quarter, including $243 million in share repurchases and $55 million in dividend payments.
LDOS’ 2026 Guidance
Leidos raised its fiscal 2026 outlook, with revenues now expected in the range of $18.00-$18.40 billion compared with the prior view of $17.50-$17.90 billion. The Zacks Consensus Estimate for revenues is pegged at $17.91 billion, which is below the company’s guided range.
Non-GAAP earnings are now projected at $12.10-$12.50 per share compared with the prior range of $12.05-$12.45. The Zacks Consensus Estimate for earnings is pegged at $12.26 per share, which lies below the midpoint of the company’s guided range.
The company also raised its cash flows provided by operating activities outlook to approximately $1.80 billion from approximately $1.75 billion.
RTX Corporation’s (RTX - Free Report) first-quarter 2026 adjusted earnings per share of $1.78 beat the Zacks Consensus Estimate of $1.52 by 17%. The bottom line improved 21.1% from the year-ago quarter’s level of $1.47.
Quarterly revenues came in at $22.08 billion, up 8.7% from $20.31 billion in the year-ago period. Sales also beat the consensus mark of $21.56 billion by 2.43%.
Northrop Grumman Corporation (NOC - Free Report) reported first-quarter 2026 adjusted earnings of $6.14 per share, which beat the Zacks Consensus Estimate of $6.08 by 1%. The bottom line also improved 1.3% from the year-ago quarter’s level of $6.06.
NOC’s total sales of $9.88 billion in the first quarter beat the Zacks Consensus Estimate of $9.79 billion by 1%. The top line also improved 4.4% from $9.47 billion reported in the year-ago quarter.
The Boeing Company (BA - Free Report) incurred an adjusted loss of 20 cents per share in the first quarter of 2026, narrower than the Zacks Consensus Estimate of a loss of 95 cents. The bottom line improved from the year-ago quarter’s reported loss of 49 cents.
Revenues amounted to $22.22 billion, which outpaced the Zacks Consensus Estimate of $21.87 billion by 3.5%. The top line also surged 14% from the year-ago quarter’s reported figure of $19.5 billion.
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LDOS Q1 Earnings Beat on Backlog Scale and Key Contract Wins
Key Takeaways
Leidos Holdings, Inc. (LDOS - Free Report) reported first-quarter 2026 non-GAAP earnings of $3.13 per share, beating the Zacks Consensus Estimate of $2.88 by 8.68%. The metric increased 5.4% from $2.97 in the year-ago quarter.
On a GAAP basis, earnings per share were $2.56, down from $2.77 a year ago. Management attributed the year-over-year decline in GAAP results to discrete costs tied to the Entrust acquisition and the pending joint venture involving security-related businesses.
LDOS' Total Revenues
Total revenues came in at $4.40 billion, up 3.7% year over year and above the Zacks Consensus Estimate of $4.27 billion by 3.1%. The company said revenues increased on higher customer demand, particularly across Intelligence programs, commercial energy infrastructure work and domestic and international air traffic management systems.
Demand signals were mixed in the quarter. Net bookings totaled $3.3 billion, translating into a book-to-bill ratio of 0.8, even as management highlighted a trailing-12-month book-to-bill of 1.1 that supported year-over-year growth in contracted activity.
Leidos Holdings, Inc. Price, Consensus and EPS Surprise
Leidos Holdings, Inc. price-consensus-eps-surprise-chart | Leidos Holdings, Inc. Quote
LDOS’ Backlog
Backlog at quarter-end was $48.4 billion, including $9.6 billion funded and $38.8 billion unfunded. The company noted that the funded portion reflects contract value supported by appropriated funding (net of revenues previously recognized), while unfunded backlog includes remaining task-order value and options expected to be executed.
By segment, Intelligence & Digital backlog totaled $19.34 billion, Health was $6.56 billion, Homeland was $9.88 billion and Defense was $12.59 billion. Backlog as of April 3, 2026, also included $371 million acquired through the Entrust acquisition within the Homeland segment.
Operational Statistics of LDOS
Cost of revenues totaled $3.64 billion compared with $3.49 billion in the prior-year quarter. Selling, general and administrative expenses were $223 million compared with $230 million a year ago, while acquisition, integration and restructuring costs increased to $35 million from $4 million.
Operating income was $508 million, down from $530 million in the year-ago period. Interest expense rose to $55 million from $49 million.
Leidos’ Segmental Performance
Intelligence & Digital revenues rose to $1.51 billion from $1.41 billion, supported by recent contract awards and higher volumes for Intelligence Community mission support, along with $22 million of acquisition revenues tied to Kudu Dynamics. Non-GAAP operating margin increased to 10.2% from 9.7%.
Health revenues were $1.19 billion, unchanged year over year. Non-GAAP operating margin was 24.2% compared with 24.7% a year ago.
Homeland revenues increased to $816 million from $770 million, driven primarily by continued demand for Energy Infrastructure engineering services and domestic and international air traffic control systems. Non-GAAP operating margin decreased to 8.5% from 9.4% amid changing customer requirements on a fixed-price program.
Defense revenues were $883 million compared with $879 million a year ago, as strong growth in integrated air defense systems offset the wind-down of certain airborne surveillance programs. Non-GAAP operating margin decreased to 8.3% from 9.8%, primarily due to schedule delays on a fixed-price development program.
LDOS’ Financials
Cash and cash equivalents were $457 million at quarter-end, down from $1.11 billion as of Jan. 2, 2026. Long-term debt, net of the current portion, increased to $6.01 billion from $4.63 billion over the same period, reflecting acquisition financing activity.
Net cash provided by operating activities totaled $301 million for the quarter, up from $58 million in the prior-year period. The company also returned capital to shareholders during the quarter, including $243 million in share repurchases and $55 million in dividend payments.
LDOS’ 2026 Guidance
Leidos raised its fiscal 2026 outlook, with revenues now expected in the range of $18.00-$18.40 billion compared with the prior view of $17.50-$17.90 billion. The Zacks Consensus Estimate for revenues is pegged at $17.91 billion, which is below the company’s guided range.
Non-GAAP earnings are now projected at $12.10-$12.50 per share compared with the prior range of $12.05-$12.45. The Zacks Consensus Estimate for earnings is pegged at $12.26 per share, which lies below the midpoint of the company’s guided range.
The company also raised its cash flows provided by operating activities outlook to approximately $1.80 billion from approximately $1.75 billion.
LDOS’ Zacks Rank
Leidos Holdings currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Defense Releases
RTX Corporation’s (RTX - Free Report) first-quarter 2026 adjusted earnings per share of $1.78 beat the Zacks Consensus Estimate of $1.52 by 17%. The bottom line improved 21.1% from the year-ago quarter’s level of $1.47.
Quarterly revenues came in at $22.08 billion, up 8.7% from $20.31 billion in the year-ago period. Sales also beat the consensus mark of $21.56 billion by 2.43%.
Northrop Grumman Corporation (NOC - Free Report) reported first-quarter 2026 adjusted earnings of $6.14 per share, which beat the Zacks Consensus Estimate of $6.08 by 1%. The bottom line also improved 1.3% from the year-ago quarter’s level of $6.06.
NOC’s total sales of $9.88 billion in the first quarter beat the Zacks Consensus Estimate of $9.79 billion by 1%. The top line also improved 4.4% from $9.47 billion reported in the year-ago quarter.
The Boeing Company (BA - Free Report) incurred an adjusted loss of 20 cents per share in the first quarter of 2026, narrower than the Zacks Consensus Estimate of a loss of 95 cents. The bottom line improved from the year-ago quarter’s reported loss of 49 cents.
Revenues amounted to $22.22 billion, which outpaced the Zacks Consensus Estimate of $21.87 billion by 3.5%. The top line also surged 14% from the year-ago quarter’s reported figure of $19.5 billion.