Leidos Holdings, Inc. Q2 FY26 Results — Earnings Call Analysis
Published 29 May 2026 | Professional Services | Market Cap: ₹16.6K Cr
- Intelligence and Digital segment revenues grew 7% YoY, driven by recent contract awards and acquisitions, indicating continued growth. - Leidos raised its 2026 revenue guidance by $500 million to a range of $18 billion to $18.4 billion.
From Leidos Holdings, Inc.'s Q2 FY26 earnings-call transcript · updated 29 May 2026.
Price
₹131.59
Market Cap
₹16.6K Cr
P/E Ratio
11.7
Revenue Rank
Margin Rank
How does Leidos Holdings, Inc. rank in Professional Services?
Compare Leidos Holdings, Inc. against every Professional Services company this quarter on revenue, margins and earnings-call signals.
📊 Revenue & Sales Performance
Rank 3- →Intelligence and Digital segment revenues grew 7% YoY, driven by recent contract awards and acquisitions, indicating continued growth.
- →Nearly 70% of the next 12-month pipeline is focused on new business and takeaway activity, skewed towards growth opportunities.
- →The $10 billion order pipeline from the Entrust acquisition is expected to convert rapidly, with orders liquidated within 1-2 years, supporting near-term revenue growth.
- →The Health business expects elevated volumes to continue in the near term, with growth opportunities in digital health services like Military OneSource and My Service Treatment Record pilot.
- →Digital infrastructure and cybersecurity offerings aligned with AI integration position the company for scalable growth.
- →The Defense Tech business is bullish on demand, especially in maritime autonomy and space, anticipating sizable future awards.
- →Overall, the company anticipates step-function growth in revenue building in Q3 and Q4, continuing into 2027.
📈 Profitability & Margins
Rank 3- →Leidos raised its 2026 revenue guidance by $500 million to a range of $18 billion to $18.4 billion.
- →Non-GAAP diluted EPS guidance increased by $0.05, now expected between $12.10 and $12.50.
- →Operating cash flow guidance was raised by $50 million to approximately $1.8 billion.
- →Entrust acquisition is expected to be accretive to non-GAAP EPS and cash in 2026, with greater accretion from synergies in 2027 and beyond.
- →Defense business profitability expected to improve as ramp-up progresses on higher-margin programs.
- →Health segment margins forecasted to remain above 20%, supported by operational and technology improvements.
- →Q2 expected to be a low point in revenue and margin with growth momentum building in Q3 and Q4.
- →Long-term outlook remains bullish, with growth driven by AI integration, digital infrastructure, and expanding managed health services.
🏗️ Capital Expenditure Plans
Yes- →Leidos has planned a significant increase in CapEx for 2026, targeting up to $350 million, marking a tripling from prior levels.
- →Q1 2026 CapEx was $31 million, lower than initially anticipated, with expectations for higher spend in Q2.
- →The elevated CapEx is for a fixed, finite period to support production programs, possibly extending into early 2027.
- →They formed a joint venture (JV) with Analogic for the SES business to avoid high capital intensity directly on Leidos.
- →Leidos is cautious, earmarking capital but only deploying it when necessary, emphasizing disciplined cash stewardship.
- →A multiyear $100 million strategic investment in a leading PE firm provides access to high-growth disruptors in AI, cyber, and autonomy.
- →CapEx investment is focused on growth areas and innovation to maintain competitive advantage without committing to perpetual high spending.
💰 Fundraising & Capital Structure
No information- →No new fundraising through debt or equity is explicitly mentioned in the provided pages.
- →The company closed the Entrust acquisition using a mix of $500 million cash on hand, $500 million commercial paper, and $1.4 billion in new bonds.
- →Post-acquisition, they borrowed less than planned and have started paying down commercial paper early.
- →The commercial paper balance was $300 million at the end of Q1, expected to be paid off through 2026.
- →The company emphasizes strong cash flow generation and disciplined capital management.
- →They repurchased $200 million of stock as part of capital deployment strategy.
- →The balance sheet shows $6.3 billion debt and $457 million cash, with a leverage ratio of 2.6x, providing ample capacity for investment aligned with strategy.
- →No indications of immediate or planned equity issuance or additional debt fundraising disclosed.
📋 Order Book & Pipeline
Yes- →Entrust business has an approximately $10 billion order pipeline.
- →The Entrust order pipeline is characterized by shorter cycle times, with orders typically liquidated within 1 to 2 years, allowing rapid order booking and growth.
- →The overall Leidos book-to-bill ratio was 0.8 in the recent quarter and 1.1x for the trailing 12 months, indicating solid award activity.
- →The Defense segment expects multiple potential product line awards contributing to growth.
- →The Health segment anticipates scaling with awards like the Military OneSource and My Service Treatment Record Pilot.
- →Near-term procurement activity is expected to pick up significantly over the course of the year.
- →The second quarter may be a revenue and margin low point due to timing and investment, but strong growth momentum is expected in Q3 and Q4.
Key Metrics
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Margin
Capex
Fundraise
Order Book
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Frequently Asked Questions
What were Leidos Holdings, Inc. Q2 FY26 results?
- Intelligence and Digital segment revenues grew 7% YoY, driven by recent contract awards and acquisitions, indicating continued growth. - Leidos raised its 2026 revenue guidance by $500 million to a range of $18 billion to $18.4 billion.
What is Leidos Holdings, Inc. share price analysis?
Leidos Holdings, Inc. currently shows a below-average growth signal. The stock trades at a P/E of 11.7 with a market cap of $16,552. Investors should review the full earnings analysis for detailed insights.
Is Leidos Holdings, Inc. planning capital expenditure?
- Leidos has planned a significant increase in CapEx for 2026, targeting up to $350 million, marking a tripling from prior levels.
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This analysis is AI-generated based on publicly available earnings data and concall transcripts. This is not investment advice. Please consult a SEBI-registered advisor before making investment decisions.