Leidos recently released its latest 10-Q report. Leidos Holdings, Inc. provides services and solutions to government and commercial customers in the United States and abroad. Its reportable businesses cover national security and digital services, health and civil programs, homeland-related systems and support, and defense systems, with headquarters in Reston, Virginia.
In Item 2, Leidos said it generated about 83% of revenue from U.S. government contracts in the three months ended July 3, 2026, down from 87% a year earlier, and about 85% in the six-month period, also down from 87%. International sales accounted for about 9% of revenue in the quarter and 8% year to date, compared with 8% in both periods last year.
Revenue rose to $4.558 billion in the quarter from $4.253 billion, up 7.2%, and to $8.958 billion in the first six months from $8.498 billion, up 5.4%. Operating income fell to $514 million from $571 million in the quarter and to $1.022 billion from $1.101 billion in the half-year period, while operating margin declined to 11.3% from 13.4% and to 11.4% from 13.0%.
Net income attributable to Leidos common stockholders was $354 million in the quarter, down from $391 million, and $682 million for the first six months, down from $754 million. Non-operating expense increased to $63 million from $53 million in the quarter and to $142 million from $105 million in the six-month period, driven mainly by higher interest expense after the termination of the senior unsecured bridge loan facility and the issuance of $600 million and $800 million senior notes; the six-month figure also included a $23 million settlement loss tied to the buy-out of the UK defined benefit pension plan.
Segment results were mixed. Intelligence & Digital revenue increased 6.5% to $1.499 billion in the quarter and 7.0% to $3.012 billion year to date, with operating income up to $142 million from $135 million in the quarter and to $288 million from $267 million in the half. Health revenue fell 7.6% to $1.086 billion in the quarter and 3.8% to $2.274 billion year to date, while operating income dropped to $254 million from $303 million in the quarter and to $538 million from $591 million in the half. Homeland revenue climbed 32.0% to $1.018 billion in the quarter and 19.0% to $1.834 billion year to date, with operating income rising to $92 million from $64 million in the quarter and holding at $125 million for both six-month periods. Defense revenue increased 6.2% to $955 million in the quarter and 3.4% to $1.838 billion year to date, while operating income rose to $84 million from $78 million in the quarter but slipped to $146 million from $152 million in the half. Corporate posted an operating loss of $58 million in the quarter, compared with $9 million a year earlier, and $75 million year to date versus $34 million.
Bookings totaled an estimated $4.9 billion in the quarter and $8.2 billion in the first six months, up from $3.9 billion and $6.0 billion a year earlier. Backlog reached $48.711 billion at July 3, 2026, including $10.223 billion funded and $38.488 billion unfunded, versus $46.210 billion a year earlier; by segment, backlog stood at $18.414 billion for Intelligence & Digital, $6.611 billion for Health, $9.930 billion for Homeland, and $13.756 billion for Defense.
Leidos ended the period with $748 million in cash and cash equivalents. Outstanding debt was $6.0 billion, up from $4.6 billion at January 2, 2026, after the company issued $600 million of 4.10% senior unsecured notes due March 2029 and $800 million of 5.00% senior unsecured notes due March 2036 in March 2026. The company paid $55 million in dividends in the quarter and $110 million in the first six months, and said it was in compliance with all financial covenants as of July 3, 2026. As a result of these announcements, the company's shares have moved 7.67% on the market, and are now trading at a price of $127.82. For more information, read the company's full 10-Q submission here.
