Leidos Holdings, Inc.
Leidos Holdings, Inc. is a U.S.-based government and commercial services company that designs and delivers digital, mission, and systems solutions for complex operational environments. Its work spans defense, intelligence, homeland security, health, civil infrastructure, and selected commercial markets, with most revenue tied to U.S. government contracts.
Fiscal year 2026 · change from previous year
Development 2021–2026
Business
Share of revenueCyber, intelligence, digital modernization, and mission software services for national security customers.
IT, operations, and mission support for federal health and civil agencies.
Solutions for commercial customers and non-U.S. government clients, including energy and other infrastructure work.
Hardware, systems integration, and mission support for defense and security programs.
Customers
Leidos primarily serves U.S. federal agencies, especially the Department of Defense, Intelligence Community, DHS, FAA, VA, and NASA, where contracts are mission-critical and often long duration. It also serves foreign governments, state and local agencies, utilities, industrial customers, and a smaller set of commercial clients that need specialized technical and systems capabilities.
Buys cyber, mission software, systems integration, and operational support for national security missions.
Buys IT modernization, health, aviation, and administrative mission support services.
Buys integrated systems, manufacturing, and technical services for defense platforms and programs.
Buys grid modernization, energy management, and consulting to improve reliability and efficiency.
Buys niche digital, mission, and systems solutions where Leidos has domain expertise.
Strategy
Leidos is focused on growing revenue by cross-selling capabilities across its four reportable segments and investing in profitable growth markets. It is also improving back-office infrastructure and deploying capital discipline to support margins, execution, and shareholder value while maintaining an appropriate leverage profile.
Leidos wants to win larger, more complex programs by combining cyber, digital, mission, and systems capabilities.
Management is directing resources toward areas with better growth and margin potential to improve operating performance.
Better processes and infrastructure should improve execution, reduce overhead friction, and support margin expansion.
The company aims to balance shareholder returns, debt management, and flexibility for acquisitions or program investment.
Geography
Q2/2026Leidos is headquartered in Reston, Virginia and operates globally, but its business is heavily concentrated in the United States. Management disclosed that about 87% of fiscal 2024 revenue came from U.S. government contracts and about 8% came from entities outside the United States, highlighting limited but meaningful international exposure.
Share of the revenue the company reports by geography.
Risks
Leidos depends heavily on competitive government contracting, so pricing pressure, bid losses, program execution issues, and contract timing can quickly affect revenue and margins. Its exposure to U.S. federal spending, economic uncertainty, AI adoption risk, and reputational/ESG scrutiny creates both operating and compliance risk, while goodwill and restructuring charges can also create earnings volatility.
- Program execution and contract performance riskImpact: HighLikelihood: High
Complex long-term contracts can suffer from cost overruns, delays, or performance issues that hurt profitability and reputation.
Exposure: Mission-critical systems and technical services
- Dependence on U.S. government contractsImpact: HighLikelihood: Medium
Most revenue comes from federal customers, so budget cuts, delays, or procurement changes can reduce demand quickly.
Exposure: 87% of fiscal 2024 revenue came from U.S. government contracts
- Competitive contract bidding and pricing pressureImpact: HighLikelihood: Medium
Leidos competes against large defense, IT, and consulting firms, which can reduce win rates and margins.
Exposure: Government and commercial contract awards
- Goodwill and impairment riskImpact: MediumLikelihood: High
Past impairment charges show that acquired assets and reporting units can be written down if performance weakens.
Exposure: Goodwill and acquired businesses
- AI and technology adoption riskImpact: MediumLikelihood: Medium
The company uses artificial intelligence and must keep pace with competitors while managing legal, ethical, and operational exposure.
Exposure: Trusted mission AI and digital modernization offerings
- Reputational and ESG compliance riskImpact: MediumLikelihood: Low
Negative stakeholder views or non-compliance with evolving ESG expectations could affect hiring, customer trust, and investor sentiment.
Exposure: Public-sector and sensitive mission work
Accounting
Judgemental itemsGovernment and mission services contracts often recognize revenue over time, so estimates of progress and costs affect reported results.
Impact: Can shift revenue and margin between periods
Management uses backlog to indicate future revenue, but it depends on contract funding, options, and task order assumptions.
Impact: Affects visibility into future sales
Acquired businesses and reporting units must be tested for impairment, and weak performance can lead to large write-downs.
Impact: Can materially reduce earnings and equity
Workforce and footprint changes can create one-time expenses that affect comparability across periods.
Impact: Distorts operating income in affected periods
Contract-related guarantees, claims, and lawsuits require judgment in estimating liabilities.
Impact: Can affect accrued liabilities and cash needs
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Last updated: 24/09/2026