Leidos lifts annual forecasts on strong defense demand

Leidos Holdings reported record Q2 2026 revenue of $4.6 billion and a 1.1 book-to-bill ratio, with Defense at a 2.2 book-to-bill. Full-year revenue guidance was raised by $100 million at the midpoint. Health faces VA incentive payment suspension, while Homeland grew 32%. Capex guidance was cut to about $250 million and share repurchases were authorized.

DHS awarded 14 positions on a $1.5B counter-drone IDIQ, split into Track 1 (ceiling $1.01B) for hardware and services and Track 2 (ceiling $489M) for comprehensive services, per USAspending. Leidos and BAE Systems won both tracks; others received single-track spots. Ordering runs Aug. 1, 2026 to July 31, 2031, with a $250M minimum guarantee at award.

Leidos said it won a contract with the Office of Naval Intelligence worth up to $64.8 million, including a base year and four option years, to continue modernizing naval intelligence communications infrastructure. The work builds on Leidos efforts since 2021 and supports the Hopper Global Communications Center, aimed at secure information sharing and technology integration, according to the company.

Stifel cut its Leidos Holdings (NYSE:LDOS) price target to $142 from $193 and kept a Hold rating, citing concerns about the company’s Health segment despite strong Q2 results. Leidos reported adjusted EPS of $3.26 vs $2.91 expected and revenue of $4.56B vs $4.44B, raised full-year 2026 guidance, and saw organic revenue growth of 4% YoY.

Leidos Holdings (LDOS) shares rose about 9.3% after the company reported Q2 2026 results and raised guidance again, according to Leidos. Revenue was $4.56B (+7% YoY). Non-GAAP EPS guidance increased to $12.20 to $12.50, with operating cash flow around $1.85B. Net bookings were $4.9B and backlog $48.7B.

Leidos said on its Q2 earnings call that the Defense Health Agency’s plan to move the MHS Genesis electronic health record from a lead systems integrator model to direct contracts with tech providers could increase government in-sourcing of integration and commercial technology. DHA plans bridge contracts with Leidos and targets 2027 for provider transitions. Leidos reported Q2 revenue of $4.5B and adjusted EBITDA $631M, and raised full-year revenue guidance to $18.2B-$18.4B.