Leidos Holdings, Inc. Q3 2026 Earnings Recap

Leidos shares fell 6.5% after earnings. Despite higher full-year guidance and solid quarterly cash flow, investors may have focused on the modest 4% revenue growth and uncertainty around the VBA MDE recompete, whose final RFP is still pending.

Key Takeaways

• Revenue grew 4%; adjusted EBITDA margin was 13.9%, and non-GAAP diluted EPS rose 19% year over year.
• Free cash flow was $476 million for the quarter and $1.5 billion year to date, surpassing the company’s original full-year target.
• Net awards were $5.5 billion, for a 1.2x book-to-bill ratio; Defense’s ratio was 1.9x in the quarter and 2.0x year to date.
• Management said it enhanced 2026 guidance, but the transcript provides no revised guidance figures.
• The VBA MDE final RFP is expected later this month; Leidos said existing contracts are highly likely to be extended through the first half of 2027, ahead of the planned July 2027 start for new contracts.