LDOS · 10-Q · 2026Q4 · Full report

Operating Income and Margins

Leidos Holdings, Inc. · 2026-11-03 · Importance 37 · Surprise 32

Consolidated operating margin for the nine months ended October 2, 2026, was 11.6%, down from 12.6% a year earlier, while operating income declined 3.7%. Intelligence & Digital's nine-month margin improved to 10.1% from 9.4%, supported by program wins and improved program mix. Health's margin fell to 23.3% from 25.6% as managed health services volumes and related incentive fees declined. Homeland's margin was 7.2% versus 7.6%, while Defense's margin was 8.2% versus 8.4%; Defense said higher-margin contract completions offset program wins and improved performance.

Key facts

• Corporate operating loss decreased by $23 million in the three months ended October 2, 2026, primarily due to lower legal expenses versus the prior year. source
• Intelligence & Digital operating income increases in the three and nine months ended October 2, 2026, were primarily attributable to program wins and improved margins from program mix, partially offset by net decreases in volumes and completion of certain contracts. source
• Homeland three-month operating income growth was primarily attributable to increased volumes, partially offset by higher amortization, acquisition and restructuring expenses. source
• Homeland nine-month operating income growth was primarily attributable to increased volumes and program wins, partially offset by higher amortization, acquisition and restructuring expenses and a prior-year business divestiture. source
• Defense nine-month operating income remained consistent year over year as program wins and improved operating performance were offset by completion of higher-margin contracts. source
• Corporate operating loss increased in the nine months ended October 2, 2026, primarily due to increased acquisition and integration costs, partially offset by decreased current-year legal fees. source
• Defense three-month operating income growth was primarily attributable to program wins and increased volumes on existing contracts, partially offset by completion of certain contracts. source