Leidos Holdings, Inc. raised its 2026 earnings and operating cash-flow targets while trimming its revenue forecast after third-quarter results showed higher sales and profit but lower cash generation.
The company now expects fiscal 2026 revenue of $18 billion to $18.2 billion, compared with its previous range of $18.2 billion to $18.4 billion. Its forecast for non-GAAP diluted earnings per share rose to $12.50 to $12.70 from $12.20 to $12.50. Leidos also lifted its operating cash-flow estimate to about $1.9 billion from about $1.85 billion and kept its adjusted EBITDA margin outlook in the mid-13% range.
Leidos said the updated guidance reflects its results so far this year, its latest outlook and an Oct. 5 transaction with Altaris. Under the deal, Leidos contributed its Security Enterprise Solutions and Industrial Automation businesses to a new joint venture.
For the quarter ended Oct. 2, revenue rose 3.6% from a year earlier to $4.63 billion. Net income increased to $413 million from $369 million, and diluted earnings per share reached $3.28, up from $2.82. Non-GAAP diluted earnings per share rose 19% to $3.62.
Leidos credited demand for defense technology, air traffic management and intelligence support, as well as ENTRUST Solutions, for the revenue gain. The company said those contributions helped offset declines in some managed health and federal civilian IT programs. Leidos acquired ENTRUST in March.
Homeland revenue climbed 32% to $1.02 billion, including $142 million from ENTRUST. Health revenue fell about 12% to $1.07 billion. Defense revenue rose 3.4% to $992 million, while Intelligence & Digital revenue increased 1.4% to $1.55 billion.
Operating cash flow was $523 million, down from $711 million a year earlier. Non-GAAP free cash flow also declined, to $476 million from $680 million.
A Form 8-K filed with the U.S. Securities and Exchange Commission on Nov. 3 lists the results under Item 2.02 and financial statements and exhibits under Item 9.01. Leidos scheduled its results call for 8 a.m. ET on Nov. 3, after outlining the report timetable in an earlier announcement ahead of its results.
