Leidos Raises Annual Guidance as Adjusted EPS Jumps 19% to $3.62

Key Facts

Leidos reported revenue of $4.6 billion in the third quarter of fiscal 2026, up 4% year over year, and raised its full-year guidance, according to a summary of its statement published via PR Newswire. Diluted non-GAAP earnings per share were $3.62, up 19% from the same period. The company also reported net income of $413 million, or $3.28 per diluted share under GAAP. The figures show a divergence between revenue growth and the pace of adjusted earnings growth. The statement summary did not specify the new annual guidance range or the reason for the revision.

Adjusted earnings before interest, taxes, depreciation and amortization totaled $644 million, while the margin was 13.9%, according to the two non-GAAP measures cited in the summary. These indicators complement revenue and net income, but use adjusted definitions that differ from GAAP measures. Adjusted earnings per share rose alongside revenue growth, but the available statement does not attribute the increase to a specific factor. Adjusted earnings and net income therefore remain separate benchmarks for assessing the quarter’s results. The company said in the summary that adjusted diluted earnings per share were "$3.62, up 19% year over year."

Cash flow from operations totaled $523 million during the quarter. Free cash flow was $476 million, a non-GAAP measure, according to the statement summary. The two figures reflect different measures of cash generation, so free cash flow is not the same as operating cash flow. The company reported both measures alongside income and earnings-per-share results. The available summary did not provide further detail explaining the difference between them or the factors affecting either measure.

The results followed Leidos’ report of revenue of $4.558 billion in the second quarter of fiscal 2026, up 7% year over year, compared with $4.253 billion in the second quarter of 2025. Third-quarter revenue growth, at 4%, was slower than the previous quarter’s rate. In the second quarter, net income fell 9% and GAAP diluted earnings per share declined 7% year over year, while non-GAAP diluted earnings per share rose 2% to $3.26. This puts the third-quarter 19% increase in adjusted earnings per share in the context of an acceleration from the growth rate recorded in the previous quarter. The comparison is between two consecutive fiscal periods, each with a different year-over-year comparison base.

In August, the company had raised its fiscal 2026 revenue guidance to a range of $18.20–$18.40 billion, from $18.00–$18.40 billion. It also increased its non-GAAP diluted earnings-per-share range to $12.20–$12.50, compared with $12.10–$12.50 previously. Its estimate for cash flow from operating activities rose to about $1.85 billion, from about $1.80 billion. These figures are the August baseline, before the annual guidance improvement announced in the third-quarter statement headline. But the available summary does not provide the revised figures following that announcement or specify the size or components of the new increase.

Against the backdrop of second-quarter results, Chief Executive Tom Bell said the company booked $5 billion in contracts, pointing to growth in defense technology, energy infrastructure and cybersecurity. Net bookings for that quarter were $4.9 billion, with a book-to-bill ratio of 1.1. Total backlog reached $48.7 billion, including $10.2 billion funded. At the time, these figures indicated the scale of contracts booked and work on hand, but they relate to the second quarter and do not represent third-quarter bookings. The available summary of the third-quarter results did not include new booking or backlog figures.

Leidos shares closed at $144.16 in the November 2, 2026 session, according to EL7 data. That was the day before the third-quarter earnings call, scheduled for November 3 at 8:00 a.m. Eastern time. The company said it would issue its results statement before the call and provide a live webcast, replay and accompanying materials through its investor relations website. The call was thus the next opportunity to discuss the results with investors. The available results summary did not include the trading range during the November 2 session.