Slides
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February 17, 2026 Leidos Q4 FY25 Earnings Conference Call
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FORWARD-LOOKING STATEMENTS Leidos Q4 2025 Earnings Conference Call 2 international business; our ability to comply with the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act of 2010 and similar worldwide anti-corruption and anti-bribery laws and regulations; our ability to protect our intellectual property and other proprietary rights by third parties of infringement, misappropriation or other violations by us of their intellectual property rights; our ability to prevail in litigation brought by third parties of infringement, misappropriation or other violations by us of their intellectual property rights; our ability to declare or increase future dividends based on our earnings, financial condition, capital requirements and other factors, including compliance with applicable law and our agreements; our ability to grow our commercial health and infrastructure businesses, which could be negatively affected by budgetary constraints faced by hospitals and by developers of energy and infrastructure projects; our ability to successfully integrate acquired businesses; our ability to complete the acquisition of Entrust or successfully integrate Entrust to achieve the expected benefits of such acquisition; and our ability to execute our business plan and long-term management initiatives effectively and to overcome these and other known and unknown risks that we face. These are only some of the factors that may affect the forward- looking statements contained in this release. For further information concerning risks and uncertainties associated with our business, please refer to the filings we make from time to time with the U.S. Securities and Exchange Commission ("SEC"), including the "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Legal Proceedings" sections of our latest Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, all of which may be viewed or obtained through the Investor Relations section of our website atwww.leidos.com. All information in this release is as of February 17, 2026. Leidos expressly disclaims any duty to update the guidance or any other forward-looking statement provided in this release to reflect subsequent events, actual results or changes in Leidos' expectations. Leidos also disclaims any duty to comment upon or correct information that may be contained in reports published by investment analysts or others. LEIDOS Certain statements in this release contain or are based on "forward- looking" information within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by words such as "expects," "intends," "plans," "anticipates," "believes," "estimates," "guidance" and similar words or phrases. Forward-looking statements in this release include, among others, estimates of our future growth, strategy and financial and operating performance, including future revenues, adjusted EBITDA margins, diluted EPS (including on a non-GAAP basis) and cash flows provided by operating activities, as well as statements about our business contingency plans, government budgets and the ongoing Continuing Resolution, uncertainties in tax due to new tax legislation or other regulatory developments, strategy, planned investments, sustainability goals and our future dividends, share repurchases, capital expenditures, debt repayments, acquisitions (including the acquisition of Entrust), dispositions and cash flow conversion. These statements reflect our belief and assumptions as to future events that may not prove to be accurate. Actual performance and results may differ materially from those results anticipated by our guidance and other forward-looking statements made in this release depending on a variety of factors, including, but not limited to: developments in the U.S. government defense and non-defense budgets, including budget reductions, sequestration, implementation of spending limits or changes in budgetary priorities, initiatives aimed at improving government efficiency, delays in the U.S. government budget process or a government shutdown, or the U.S. government’s failure to raise the debt ceiling, which increases the possibility of a default by the U.S. government on its debt obligations, related credit-rating downgrades, or an economic recession; uncertainties in tax due to new tax legislation or other regulatory developments; deterioration of economic conditions or weakening in credit or capital markets; uncertainty in the consequences of current and future geopolitical events; inflationary pressures and fluctuations in interest rates; delays in the U.S. government contract procurement process or the award of contracts and delays or loss of contracts as a result of competitor protests; changes in U.S. government procurement rules, regulations and practices, including its organizational conflict of interest rules;changes in global trade policies, tariffs and other measures that could restrict international trade; increased preference by the U.S. government for minority-owned, small and small disadvantaged businesses; fluctuations in foreign currency exchange rates; our compliance with various U.S. government and other government procurement rules and regulations; governmental reviews, audits and investigations of our company; our ability to effectively compete and win contracts with the U.S. government and other customers; our ability to respond rapidly to emerging technology trends, including the use of artificial intelligence; our reliance on information technology spending by hospitals/healthcare organizations; our reliance on infrastructure investments by industrial and natural resources organizations; energy efficiency and alternative energy sourcing investments; investments by U.S. government and commercial organizations in environmental impact and remediation projects; the effects of an epidemic, pandemic or similar outbreak may have on our business, financial position, results of operations and/or cash flows; our ability to attract, train and retain skilled employees, including our management team, and to obtain security clearances for our employees; our ability to accurately estimate costs, including cost increases due to inflation, associated with our firm- fixed-price contracts and other contracts; resolution of legal and other disputes with our customers and others or legal or regulatory compliance issues; cybersecurity, data security or other security threats, system failures or other disruptions of our business; our compliance with international, federal, state and local laws and regulations regarding privacy, data security, protection, storage, retention, transfer, disposal and other processing, technology protection and personal information; the damage and disruption to our business resulting from natural disasters and the effects of climate change; our ability to effectively acquire businesses and make investments; our ability to manage risks associated with our joint ventures, including those in which we are a minority owner and do not operate the assets; our ability to maintain relationships with prime contractors, subcontractors and joint venture partners; our ability to manage performance and other risks related to customer contracts; the failure of our inspection or detection systems to detect threats; the adequacy of our insurance programs, customer indemnifications or other liability protections designed to protect us from significant product or other liability claims, including cybersecurity attacks; our ability to manage risks associated with our
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NON-GAAP FINANCIAL MEASURES This presentation includes certain non-GAAP financial measures, such as organic growth, non-GAAP operating income, non-GAAP operating margin, non-GAAP effective tax rate, non-GAAP diluted earnings per share (EPS), adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted EBITDA margin, non-GAAP free cash flow and non-GAAP free cash conversion. These are not measures of financial performance under generally accepted accounting principles in the U.S. and, accordingly, these measures should not be considered in isolation or as a substitute for the comparable GAAP measures and should be read in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP. Management believes that these non-GAAP measures provide another representation of Leidos' results of operations and financial condition, including its ability to comply with financial covenants. These non-GAAP measures are frequently used by financial analysts covering Leidos and its peers. Leidos' computation of its non-GAAP measures may not be comparable to similarly titled measures reported by other companies, thus limiting their use for comparability. LEIDOS 3 Leidos does not provide a reconciliation of forward-looking adjusted EBITDA margins or non-GAAP diluted EPS to GAAP net income, due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation. Because certain deductions for non-GAAP exclusions used to calculate projected net income may vary significantly based on actual events, Leidos is not able to forecast on a GAAP basis with reasonable certainty all deductions needed in order to provide a GAAP calculation of projected net income at this time. The amounts of these deductions may be material and, therefore, could result in projected GAAP net income and diluted EPS being materially less than projected adjusted EBITDA margins and non-GAAP diluted EPS. A reconciliation between all non-GAAP measures used in this presentation to the most directly comparable GAAP measure is contained in the appendix. Leidos Q4 2025 Earnings Conference Call
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Leidos Proprietary - Limited Distribution 4LEIDOS Strong Q4; Outstanding 2025 - 17% YoY Earnings Growth - 26% YoY FCF Growth - Book-to-Bill of 1.3 for Q4; >1.0 for 2025 Investing for Growth - Increased investment to match the moment — 3x CapEx in '26 - Negotiating with DoW on exciting co-investment opportunities around defense tech innovations - Capital allocation tied to rigorous ROIC analysis CEO KEY MESSAGES Accelerating Strategy - Cyber Growth Pillar — Kudu acquisition - Energy Growth Pillar - Divested Varec, acquiring ENTRUST Aligning Organization to Strategy - Organizing around Growth Pillars - New CTO to accelerate innovation journey - Enterprise Transformation Office to increase internal efficiency through AI-enabled Business Process Re-engineering Leidos Q4 2025 Earnings Conference Call
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FY25 AND Q4 RESULTS: INCOME STATEMENT Adjusted EBITDA Margin Non-GAAP Diluted EPSRevenues FY24 FY25 FY24 FY25 FY24 FY25 LEIDOS 5 $16,662M $17,174M 12.9% 14.1% $10.21 $11.99 $4,365M $4,207M 11.6% 13.2% $2.37 $2.76 Fiscal YearQ4 (3.6)% +160 bps +16.5% +3.1% +120 bps +17.4% Leidos Q4 2025 Earnings Conference Call
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Q4 AND FY25 SEGMENT RESULTS 6 Revenue (M)Non-GAAP OI % $1,894 $1,846 $7,365 $7,611 $1,328 $1,205 $5,015 $5,069 $604 $610 $2,252 $2,315 +3.3% +1.1% +2.8% $539 $546 $2,030 $2,179 +7.3% National Security & Digital Health & Civil Commercial & International Defense Systems LEIDOS Leidos Q4 2025 Earnings Conference Call 9.7% 11.3% 10.2% 10.4% 21.6% 22.4% 22.5% 24.2% 7.9% 9.7% 6.4% 8.7% +20 bps +170 bps +230 bps 3.5% 10.3% 7.9% 9.5% +160 bps (2.5)% Q4 FY24 Q4 FY25 FY24 FY25 Q4 FY24 Q4 FY25 FY24 FY25 Q4 FY24 Q4 FY25 FY24 FY25 (9.3)% +1.0% +1.3% Q4 FY24 Q4 FY25 FY24 FY25 +160 bps +80 bps +180 bps +680 bps
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FY25 AND Q4 RESULTS: CASH FLOW / BALANCE SHEET Record Q4 and full year cash flows driven by strong EBITDA performance, collections, and working capital management Entered into an agreement after quarter close to acquire Entrust for an all-cash purchase price of $2.4B Cash Flow Generation Balance Sheet Capital Deployment LEIDOS 7 Q4 FY25 - Total return to shareholders $360M $1,155M - CapEx & net debt repayment $48M $147M - Share repurchases $305M $944M Q4 FY25 - Operating cash flow $495M $1,750M - Non-GAAP free cash flow $452M $1,625M - DSO of 59 days, 1-day sequential improvement - Strong liquidity >$1.5B - Total debt $4.6B - Leverage ratio (net) 1.5x - Leverage ratio (gross) 1.9x Leidos Q4 2025 Earnings Conference Call Strong balance sheet provides significant capacity to capitalize on organic growth and potential future M&A aligned to NS2030
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2026 GUIDANCE Measure FY26 Guidance Revenues (B) $17.5 - $17.9 Adjusted EBITDA Margin Mid 13% Non-GAAP Diluted EPS $12.05 - $12.45 Cash Flows Provided by Operating Activities (B) Approximately $1.75 LEIDOS 8 Key Assumptions – Growth underscored by strategic investments and portfolio shaping aligned to NS2030 – Expect revenue to accelerate throughout the year, approaching double-digit growth – Margins balance investments and strong program execution & cost management – 24% Effective Tax Rate – Weighted average diluted share count of 129M – Excludes pending ENTRUST Solutions Group acquisition Leidos Q4 2025 Earnings Conference Call
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Non-GAAP Reconciliations APPENDIX 9LEIDOS Leidos Q4 2025 Earnings Conference Call
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ORGANIC GROWTH Note: 1. Current period acquisition revenues reflect revenues in the current as reported figures for 12 months from closing of each acquisition. Acquisition revenues for the three months and year ended January 2, 2026, for the National Security & Digital segment include Kudu Dynamics (acquired May 23, 2025). 2. Prior period divestiture revenues reflect revenues from assets subsequently divested. Divestiture revenues for the three months and twelve months ended January 3, 2025, for Commercial and International segment include an immaterial business not aligned to the Company's long term strategy (divested October 31, 2025). LEIDOS 10Leidos Q4 2025 Earnings Conference Call (in millions, except growth rates) Q4 FY25 Q4 FY24 % Change FY25 FY24 % Change National Security & Digital Revenues, as reported $ 1,846 $ 1,894 (3)% $ 7,611 $ 7,365 3% Acquisition revenues(1) 22 — 60 — Organic revenues $ 1,824 $ 1,894 (4)% $ 7,551 $ 7,365 3% Health & Civil Revenues, as reported $ 1,205 $ 1,328 (9)% $ 5,069 $ 5,015 1% Commercial & International Revenues, as reported $ 610 $ 604 1% $ 2,315 $ 2,252 3% Divestiture revenues(2) — 6 — 6 Organic revenues $ 610 $ 598 2% $ 2,315 $ 2,246 3% Defense Systems Revenues, as reported $ 546 $ 539 1% $ 2,179 $ 2,030 7% Total Operations Revenues, as reported $ 4,207 $ 4,365 (4)% $ 17,174 $ 16,662 3% Acquisition and divestiture revenues(1)(2) 22 6 60 6 Organic revenues $ 4,185 $ 4,359 (4)% $ 17,114 $ 16,656 3%
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Q4 NON-GAAP INCOME METRICS Three Months Ended January 2, 2026 Three Months Ended January 3, 2025 (in millions, except per share amounts) As reported Acquisition, integration and restructuring costs Amortization of acquired intangibles Asset impairment charges Gain on sale of business Non- GAAP results As reported Acquisition, integration and restructuring costs Amortization of acquired intangibles Asset impairment charges Non- GAAP results Operating income $ 473 $ 8 $ 34 $ 1 $ — $ 516 $ 421 $ 2 $ 37 $ 5 $ 465 Non-operating expense, net (44) — — — (5) (49) (46) — — — (46) Income before income taxes 429 8 34 1 (5) 467 375 2 37 5 419 Income tax expense(1) (94) (2) (8) — 1 (103) (93) — (9) (1) (103) Net income 335 6 26 1 (4) 364 282 2 28 4 316 Less: Net income (loss) attributable to non-controlling interest 8 — — — — 8 (2) — — — (2) Net income attributable to Leidos common stockholders $ 327 $ 6 $ 26 $ 1 $ (4) $ 356 $ 284 $ 2 $ 28 $ 4 $ 318 Diluted EPS attributable to Leidos common stockholders(2) $ 2.53 $ 0.05 $ 0.20 $ 0.01 $ (0.03) $ 2.76 $ 2.12 $ 0.01 $ 0.21 $ 0.03 $ 2.37 Diluted shares 129 129 129 129 129 129 134 134 134 134 134 Income before income taxes 429 8 34 1 (5) 467 375 2 37 5 419 Depreciation expense 41 — — — — 41 42 — — — 42 Amortization of intangibles 34 — (34) — — — 37 — (37) — — Interest expense, net 48 — — — — 48 47 — — — 47 EBITDA $ 552 $ 8 $ — $ 1 $ (5) $ 556 $ 501 $ 2 $ — $ 5 $ 508 EBITDA margin(3) 13.1 % 13.2 % 11.5 % 11.6 % Notes: 1. Calculation uses an estimated statutory tax rate on non-GAAP adjustments. 2. Earnings per share is computed independently for each of the non-GAAP adjustments presented and therefore may not sum to the total non-GAAP earnings per share due to rounding. 3. EBITDA divided by revenues (slide 5) LEIDOS 11Leidos Q4 2025 Earnings Conference Call
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FULL YEAR NON-GAAP INCOME METRICS Notes: 1. Calculation uses an estimated statutory tax rate on non-GAAP adjustments. 2. Earnings per share is computed independently for each of the non-GAAP adjustments presented and therefore may not sum to the total non-GAAP earnings per share due to rounding. 3. Asset markdowns associated with restructuring activities were recorded to "Cost of revenues" in the consolidated statements of operations. 4. EBITDA divided by revenues (slide 5) LEIDOS 12Leidos Q4 2025 Earnings Conference Call Year Ended January 2, 2026 Year Ended January 3, 2025 (in millions, except per share amounts) As reported Acquisition, integration and restructuring costs(3) Amortization of acquired intangibles Asset impairment charges Gain on sale of business Non- GAAP results As reported Acquisition, integration and restructuring costs(3) Amortization of acquired intangibles Asset impairment charges Gain on sale of intangible assets Non- GAAP results Operating income $ 2,109 $ 19 $ 129 $ 4 $ — $ 2,261 $ 1,827 $ 22 $ 147 $ 11 $ — $ 2,007 Non-operating expense, net (200) — — — (5) (205) (188) — — — (2) (190) Income before income taxes 1,909 19 129 4 (5) 2,056 1,639 22 147 11 (2) 1,817 Income tax expense(1) (447) (4) (32) (1) 1 (483) (388) (5) (37) (3) 1 (432) Net income 1,462 15 97 3 (4) 1,573 1,251 17 110 8 (1) 1,385 Less: Net income (loss) attributable to non-controlling interest 14 — — — — 14 (3) — — — — (3) Net income attributable to Leidos common stockholders $ 1,448 $ 15 $ 97 $ 3 $ (4) $ 1,559 $ 1,254 $ 17 $ 110 $ 8 $ (1) $ 1,388 Diluted EPS attributable to Leidos common stockholders(2) $ 11.14 $ 0.12 $ 0.75 $ 0.02 $ (0.03) $ 11.99 $ 9.22 $ 0.13 $ 0.81 $ 0.06 $ (0.01) $ 10.21 Diluted shares 130 130 130 130 130 130 136 136 136 136 136 136 Income before income taxes 1,909 19 129 4 (5) 2,056 1,639 22 147 11 (2) 1,817 Depreciation expense 160 — — — — 160 143 — — — — 143 Amortization of intangibles 130 — (129) — — 1 147 — (147) — — — Interest expense, net 203 — — — — 203 193 — — — — 193 EBITDA $ 2,402 $ 19 $ — $ 4 $ (5) $ 2,420 $ 2,122 $ 22 $ — $ 11 $ (2) $ 2,153 EBITDA margin(4) 14.0 % 14.1 % 12.7 % 12.9 %
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Q4 SEGMENT NON-GAAP OPERATING INCOME Three Months Ended January 2, 2026 (in millions) Operating income (loss) Acquisition, integration and restructuring costs Amortization of acquired intangibles Asset impairment charges Non-GAAP operating income (loss) Non-GAAP operating margin(1) National Security & Digital $ 196 $ 2 $ 9 $ 1 $ 208 11.3 % Health & Civil 264 — 6 — 270 22.4 % Commercial & International 51 1 7 — 59 9.7 % Defense Systems 44 — 12 — 56 10.3 % Corporate (82) 5 — — (77) NM Total $ 473 $ 8 $ 34 $ 1 $ 516 12.3 % Three Months Ended January 3, 2025 (in millions) Operating income (loss) Acquisition, integration and restructuring costs Amortization of acquired intangibles Asset impairment charges Non-GAAP operating income (loss) Non-GAAP operating margin(1) National Security & Digital $ 175 $ — $ 6 $ 3 $ 184 9.7 % Health & Civil 279 — 6 2 287 21.6 % Commercial & International 40 — 8 — 48 7.9 % Defense Systems 2 — 17 — 19 3.5 % Corporate (75) 2 — — (73) NM Total $ 421 $ 2 $ 37 $ 5 $ 465 10.7 % Notes: 1. Non-GAAP operating income (loss) divided by revenues (slides 5 and 6) NM - Not Meaningful LEIDOS 13Leidos Q4 2025 Earnings Conference Call
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FULL YEAR SEGMENT NON-GAAP OPERATING INCOME Year Ended January 2, 2026 (in millions) Operating income (loss) Acquisition, integration and restructuring costs(1) Amortization of acquired intangibles Asset impairment charges Non-GAAP operating income (loss) Non-GAAP operating margin(2) National Security & Digital $ 760 $ 4 $ 29 $ 1 $ 794 10.4 % Health & Civil 1,202 — 24 — 1,226 24.2 % Commercial & International 166 7 28 — 201 8.7 % Defense Systems 156 — 48 3 207 9.5 % Corporate (175) 8 — — (167) NM Total $ 2,109 $ 19 $ 129 $ 4 $ 2,261 13.2 % Year Ended January 3, 2025 (in millions) Operating income (loss) Acquisition, integration and restructuring costs(1) Amortization of acquired intangibles Asset impairment charges Non-GAAP operating income (loss) Non-GAAP operating margin(2) National Security & Digital $ 720 $ — $ 23 $ 5 $ 748 10.2 % Health & Civil 1,095 — 27 4 1,126 22.5 % Commercial & International 104 9 30 2 145 6.4 % Defense Systems 94 — 67 — 161 7.9 % Corporate (186) 13 — — (173) NM Total $ 1,827 $ 22 $ 147 $ 11 $ 2,007 12.0 % Notes: 1. Asset markdowns associated with restructuring activities were recorded to "Cost of revenues" in the consolidated statements of operations. 2. Non-GAAP operating income (loss) divided by revenues (slides 5 and 6) NM - Not Meaningful LEIDOS 14Leidos Q4 2025 Earnings Conference Call
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NON-GAAP FREE CASH FLOW Notes: 1. Net cash provided by operating activities for the three and twelve months ended January 3, 2025, was recast to reflect a change in accounting policy. 2. After-tax expenses excluded from non-GAAP net income. 3. Asset markdowns associated with restructuring activities were recorded to "Cost of revenues" in the consolidated statements of operations. 4. Net cash provided by operating activities divided by net income attributable to Leidos common stockholders. 5. Free cash flow divided by non-GAAP net income attributable to Leidos common stockholders. LEIDOS 15 Three Months Ended Year Ended (in millions, except conversion ratio) January 2, 2026 January 3, 2025 January 2, 2026 January 3, 2025 Net cash provided by operating activities(1) $ 495 $ 294 $ 1,750 $ 1,435 Payments for property, equipment and software (43) (86) (125) (149) Non-GAAP free cash flow $ 452 $ 208 $ 1,625 $ 1,286 Net income attributable to Leidos common stockholders $ 327 $ 284 $ 1,448 $ 1,254 Acquisition, integration and restructuring costs(2)(3) 6 2 15 17 Amortization of acquired intangibles(2) 26 28 97 110 Asset impairment charges(2) 1 4 3 8 Gain on sale of intangible assets(2) (4) — (4) (1) Non-GAAP net income attributable to Leidos common stockholders $ 356 $ 318 $ 1,559 $ 1,388 Operating cash flow conversion ratio(4) 151 % 104 % 121 % 114 % Non-GAAP free cash flow conversion ratio(5) 127 % 65 % 104 % 93 % Leidos Q4 2025 Earnings Conference Call