Leidos Holdings, Inc. reported a revenue increase of 3.7% for the first quarter of fiscal 2026, generating $4.4 billion compared to $4.25 billion in the same period last year. However, net income attributable to Leidos common stockholders decreased by 9.6%, falling to $328 million from $363 million. The company's operating income also saw a slight decline of 4.2%, totaling $508 million. The operating margin decreased to 11.5% from 12.5% in the prior year, reflecting increased costs associated with acquisitions and restructuring.
The financial results were influenced by several strategic developments, including the acquisition of Entrust for $2.4 billion, which was completed on March 27, 2026. This acquisition is expected to enhance Leidos' capabilities in energy infrastructure within its Homeland segment. Additionally, the company recognized $11 million in revenue from Entrust during the quarter. The acquisition of Kudu Dynamics, completed in May 2025, also contributed $22 million to revenue in the Intelligence & Digital segment.
Operationally, Leidos reported a significant increase in net bookings, which rose to $3.3 billion in the first quarter, up from $2.1 billion in the same period last year. The total backlog as of April 3, 2026, reached $48.4 billion, including $371 million from the Entrust acquisition. The company’s workforce remained stable at approximately 50,000 employees, supporting its operations across various segments, including Intelligence & Digital, Health, Homeland, and Defense.
The filing also highlighted changes in cash flow, with net cash provided by operating activities increasing to $301 million from $58 million year-over-year, primarily due to favorable changes in working capital. However, net cash used in investing activities surged to $2.36 billion, largely due to the Entrust acquisition. Financing activities generated $1.39 billion, reflecting increased debt issuance, including $600 million in senior notes and $800 million in additional notes to fund acquisitions and general corporate purposes.
Looking ahead, Leidos anticipates continued growth driven by its strategic acquisitions and a strong pipeline of government contracts. The company remains focused on aligning its offerings with U.S. government spending priorities, particularly in national security and homeland security sectors. The management expressed confidence in meeting liquidity needs through operational cash flow and existing credit facilities, positioning the company for future growth despite the challenges posed by market conditions.
About Leidos Holdings, Inc.
Leidos Holdings, Inc. is a technology and services company providing mission-critical solutions primarily to government agencies. Its core activities include defense, intelligence, cybersecurity, digital modernization, health, civil infrastructure, and security products. Leveraging advanced science, engineering, and IT capabilities, it delivers software, hardware, and integrated systems to enhance national security, public health, and infrastructure resilience worldwide.
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