Leidos Holdings Reports Q2 2026 Results: Full Earnings Call Transcript

Leidos Holdings (NYSE: LDOS ) released second-quarter financial results and hosted an earnings call on Tuesday. Read the complete transcript below. This content is powered APIs. 8%.

05, and operating cash flow guidance by $50 million, indicating confidence in its North Star 2030 growth strategy. 2 book-to-bill ratio and notable contracts, including a $1 billion framework agreement with the Department of Defense. Health segment faced changes with the VA suspending incentive payments, but the company is confident in its positioning for the upcoming recompete. Leidos Holdings completed a $66 million share repurchase and plans to resume repurchases under a new authorization, highlighting strong capital deployment.

Future outlook is positive with expectations of continued bookings momentum and a diversified growth strategy across defense, energy, and cyber sectors. Full Transcript Stuart, Investor Relations Earnings conference call. The presentation slides we'll be using are on our investor relations website. Turning to Slide 2, today's discussion contains forward-looking statements based on the environment as we currently see it and thus includes risks and uncertainties.

Today's press release contains more information on the specific risk factors that could cause actual results to differ materially. Finally, on Slide 3, we'll discuss GAAP and non-GAAP financial measures. A reconciliation between the two is included in today's press release and presentation slides. With that, I'll turn the call over to CEO Tom Bell, who will begin on Slide 4.

Tom Bell, CEO Thanks, Stuart. I'm pleased to report another strong quarter for Leidos. 6 billion. 8%.

1 book-to-bill ratio. Customer procurement activity is beginning to accelerate, so we anticipate continued positive bookings momentum through the rest of this year. 05, and raise operating cash flow guidance by $50 million. Now let me take a few moments to highlight some important developments in two of our segments that I know are top of mind for our investors.

Defense and Health. In Defense, our team delivered another exceptional quarter. Revenue growth accelerated, margins expanded, and award velocity is accelerating. 9 book-to-bill ratio.

This level of customer traction gives us continued confidence in this segment's robust business outlook as a part of Leidos. And importantly, these bookings do not yet reflect the benefit from several major defense tech programs begun this year.

These include our over $1 billion framework agreement with the Department of Defense to deliver 3,000 low-cost containerized munitions by 2030; our unique position in the testing phase of the Navy's next-generation Medium Unmanned Surface Vessel, which positions us for a potential production award in Q4; and our recent award to provide the sensor payloads for an additional 18 missile warning and missile tracking satellites in support of Golden Dome. But in addition to these hardware successes, our defense team continues to leverage the unique power of One Leidos—bringing together hardware and software products and services—to win in ways few competitors can match. S.

Army. There, engineers from our Defense and Digital businesses worked side by side to rapidly develop and deploy secure, open application programming interfaces that enabled our hardware to integrate seamlessly with the Army's evolving command-and-control architecture. And perhaps more importantly, we demonstrated those same capabilities on non-Leidos systems, validating secure interoperability using open and documented standards. Our team was among the first to complete the Army's technical sprint objectives.

They consistently led Operation Jailbreak's progress metrics by demonstrating the speed, agility, and success that today's software-defined battlefield demands. That performance reinforced Leidos' leadership roles in open architectures, and it represents a major step in helping the Pentagon rid themselves of a huge issue. That issue is the prevention of seamless battlefield understanding and seamless command and control due to proprietary software vendor lock. By bringing together advanced hardware, mission software, systems integration, and deep operational expertise—all housed within One Leidos—we deliver differentiated capabilities at the speed our customers require.

We believe this truly positions us to lead in the defense tech of the future, and our performance during this hackathon is garnering us more and more customer interaction and customer traction. Now in Health, demand for our VBA Medical Disability Exam business remains strong through the second quarter, and we are now actively positioning this business for the customer's upcoming recompete. The VA recently advised that it is reviewing