LDOS · 10-Q · 2026Q3 · Full report

Operating Margin Drivers

Leidos Holdings, Inc. · 2026-08-04 · Importance 36 · Surprise 40 · From source text

Consolidated operating margin decreased to 11.3% from 13.4% in the quarter and to 11.4% from 13.0% for the six months ended July 3, 2026. Intelligence & Digital's six-month operating margin improved to 9.6% from 9.5% because of improved margins from program mix, despite completed contracts. Health's operating margin fell to 23.4% from 25.8% in the quarter and to 23.7% from 25.0% year to date because of net volume decreases. Homeland's six-month margin declined to 6.8% from 8.1% as increased amortization, acquisition and restructuring expenses partially offset volume growth, program wins and Entrust's contribution, while Defense's six-month margin fell to 7.9% from 8.5% after higher-margin contracts ended.

Key facts

• Corporate operating loss was $(58) million for the three months ended July 3, 2026 and $(9) million for the three months ended July 4, 2025; the increase was primarily attributable to a $25 million insurance reimbursement in the prior year and increased acquisition and integration costs in the current year. source
• Operating margin was 11.3% for the three months ended July 3, 2026 and 13.4% for the three months ended July 4, 2025. source
• Operating margin was 11.4% for the six months ended July 3, 2026 and 13.0% for the six months ended July 4, 2025. source
• The increase in corporate operating loss for the six months ended July 3, 2026 was primarily attributable to higher insurance reimbursements for legal costs in the prior year, and increased acquisition and integration costs in the current year. source

Impact estimates