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November 3, 2026 LEIDOS Q3 FY26 EARNINGS CONFERENCE CALL
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Q3 FY26 EARNINGS CONFERENCE CALL 2 FORWARD-LOOKING STATEMENTS risks associated with our 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; 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 at www.leidos.com. All information in this release is as of November 3, 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. 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 spending, uncertainties in tax due to new tax legislation or other regulatory developments, strategy, planned investments including the pending joint venture, sustainability goals and our future dividends, share repurchases, capital expenditures, debt repayments, acquisitions, 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, potential future U.S. government shutdown and other or future delays in the U.S. government budget process, 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; 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 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
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Q3 FY26 EARNINGS CONFERENCE CALL 3 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 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.
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Q3 FY26 EARNINGS CONFERENCE CALL 4 CEO HIGHLIGHTS Sharpening the Portfolio } Divested SES—significant equity stake in JV enables shareholders to capture long-term upside } Focus our people and investments to create value Notching Defense Tech Wins } SDA AMDT3 infrared space-sensing payloads } Significant new OTAs: } Havoc Spear } Navy's nuclear-armed sea-launched cruise missiles } New Army program of record for passive sensing Advancing Commercial Offerings } MySTR/Military OneSource—invest, leverage, scale } Parcata—revolutionary AI-powered patching } Building a new, repeatable technology foundation for One Leidos Building an Energy Powerhouse Strong results driven by resilient portfolio and NorthStar 2030 Strategy } Expanded SkyWire AI engineering tool to gas and power generation use cases } Opportunities in power generation for data centers } Positioned for coming wave to secure the grid Strong Q3 Results—Third Consecutive Quarter Enhancing 2026 Guidance Highlights of NorthStar 2030 Strategy in Action
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Q3 FY26 EARNINGS CONFERENCE CALL 5 Q3 FY26 RESULTS: INCOME STATEMENT ADJUSTED EBITDA MARGIN NON-GAAP DILUTED EPS REVENUES (M) Q3 FY25 Q3 FY26 Q3 FY25 Q3 FY26 Q3 FY25 $4,469 $4,630 Q3 FY26 13.8% 13.9% $3.05 $3.62 +3.6% +10 bps +18.7% OPERATING CASH FLOW (M) Q3 FY25 Q3 FY26 $711 $523 -26.4%
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Q3 FY26 EARNINGS CONFERENCE CALL 6 Q3 FY26 RESULTS: SEGMENT VIEW $1,525 $1,546 $1,210 $1,068 $775 $1,024 Revenue (M)Non-GAAP OI % +1.4% +32.1% Q3 FY25 Q3 FY26 $959 $992 +3.4% INTELLIGENCE & DIGITAL HEALTH HOMELAND DEFENSE 9.9% 11.5% 27.3% 22.8% 7.5% 11.3% +160 bps -450 bps +380 bps 9.8% 9.7% -10 bps Q3 FY25 Q3 FY26 Q3 FY25 Q3 FY26 Q3 FY25 Q3 FY26 -11.7%
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Q3 FY26 EARNINGS CONFERENCE CALL 7 Q3 FY26 RESULTS: CAPITAL ALLOCATION & STRUCTURE } Strong and flexible balance sheet Balance SheetCapital Deployment } Strong cash flow } Step up in capital investments } Robust return to shareholders Capital expenditures $47M Open market share repurchases $500M Total return to shareholders $556M Cash flows used in financing activities $549M Strong liquidity ~$2.0B Total debt $6.0B Leverage ratio (gross) 2.5x Leverage ratio (net) 2.2x } SES assets/liabilities held for sale at quarter end—41.5% equity ownership of JV as of Q4
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Q3 FY26 EARNINGS CONFERENCE CALL 8 2026 GUIDANCE MEASURE CURRENT PRIOR Revenues (B) $18.00 - $18.20 $18.20 - $18.40 Adjusted EBITDA Margin Mid 13% Mid 13% Non-GAAP Diluted EPS $12.50 - $12.70 $12.20 - $12.50 Cash Flows Provided by Operating Activities (B) Approximately $1.90 Approximately $1.85 Improved Guidance, Reflects the Reset of SES JV Closure KEY DRIVERS AND ASSUMPTIONS } Continuing Resolution through 2026 } Weighted average diluted share count of 126M } Effective non-GAAP tax rate ~20%
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9Q3 FY26 EARNINGS CONFERENCE CALL NON-GAAP RECONCILIATIONS APPENDIX
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Q3 FY26 EARNINGS CONFERENCE CALL 10 ORGANIC GROWTH (in millions, except growth rates) Q3 FY26 Q3 FY25 % Change Intelligence & Digital Revenues, as reported $ 1,546 $ 1,525 1.4 % Health Revenues, as reported 1,068 1,210 (11.7) % Homeland Revenues, as reported 1,024 775 32.1 % Acquisition and divestiture revenues(1)(2) 142 7 Organic revenues 882 768 14.8 % Defense Revenues, as reported 992 959 3.4 % Total Operations Revenues, as reported 4,630 4,469 3.6 % Acquisition and divestiture revenues(1)(2) 142 7 Organic revenues $ 4,488 $ 4,462 0.6 % 1. Current period acquisition revenues reflects revenues in the current as reported figures for 12 months from closing of each acquisition. Acquisition revenues for the three months ended October 2, 2026, for the Homeland segment includes Entrust (acquired March 27, 2026). 2. Prior period divestiture revenues reflect revenues from assets subsequently divested. Divestiture revenues for the three months ended October 3, 2025, for the Homeland segment include an immaterial business not aligned to the Company's long term strategy (divested October 31, 2025).
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Q3 FY26 EARNINGS CONFERENCE CALL 11 NON-GAAP INCOME METRICS Three Months Ended October 2, 2026 Three Months Ended October 3, 2025 (in millions, except per share amounts) As reported Acquisition, integration and restructuring costs Amortization of acquired intangibles Asset impairment charges Non-GAAP results As reported Acquisition, integration and restructuring costs Amortization of acquired intangibles Asset impairment charges Non-GAAP results Operating income $ 553 $ 12 $ 35 $ 7 $ 607 $ 535 $ 4 $ 33 $ 3 $ 575 Non-operating expense, net (71) — — — (71) (51) — — — (51) Income before income taxes 482 12 35 7 536 484 4 33 3 524 Income tax expense(1) (69) (1) (9) (2) (81) (115) (1) (8) (1) (125) Net income 413 11 26 5 455 369 3 25 2 399 Less: net income attributable to non-controlling interest 3 — — — 3 2 — — — 2 Net income attributable to Leidos common stockholders $ 410 $ 11 $ 26 $ 5 $ 452 $ 367 $ 3 $ 25 $ 2 $ 397 Diluted EPS attributable to Leidos common stockholders(2) $ 3.28 $ 0.09 $ 0.21 $ 0.04 $ 3.62 $ 2.82 $ 0.02 $ 0.19 $ 0.02 $ 3.05 Diluted shares 125 125 125 125 125 130 130 130 130 130 Income before income taxes 482 12 35 7 536 484 4 33 3 524 Depreciation expense 41 — — — 41 40 — — — 40 Amortization of intangibles 35 — (35) — — 34 — (33) — 1 Interest expense, net 67 — — — 67 51 — — — 51 Adjusted EBITDA $ 625 $ 12 $ — $ 7 $ 644 $ 609 $ 4 $ — $ 3 $ 616 Adjusted EBITDA margin(3) 13.5 % 13.9 % 13.6 % 13.8 % 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 adjustment presented and therefore may not sum to the total non-GAAP earnings per share due to rounding. 3. Adjusted EBITDA divided by revenues (slide 5).
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Q3 FY26 EARNINGS CONFERENCE CALL 12 NON-GAAP SEGMENT OPERATING INCOME Three Months Ended October 2, 2026 (in millions, except margin percentages) 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) Intelligence & Digital $ 171 $ 2 $ 5 $ — $ 178 11.5 % Health 240 (1) 5 — 244 22.8 % Homeland 81 13 15 7 116 11.3 % Defense 86 — 10 — 96 9.7 % Corporate (25) (2) — — (27) NM Total $ 553 $ 12 $ 35 $ 7 $ 607 13.1 % Three Months Ended October 3, 2025 (in millions, except margin percentages) Operating income (loss) Acquisition, integration and restructuring costs Amortization of acquired intangibles Asset impairment charges Non-GAAP operating income (loss) Non-GAAP operating margin(2) Intelligence & Digital $ 141 $ 2 $ 8 $ — $ 151 9.9 % Health 324 — 6 — 330 27.3 % Homeland 50 1 7 — 58 7.5 % Defense 79 — 12 3 94 9.8 % Corporate (59) 1 — — (58) NM Total $ 535 $ 4 $ 33 $ 3 $ 575 12.9 % 1. Asset markdowns associated with restructuring activities were recorded to "Cost of revenues" in the condensed consolidated statements of operations. 2. Non-GAAP operating income divided by revenues (slides 5 and 6). NM - Not Meaningful
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Q3 FY26 EARNINGS CONFERENCE CALL 13 NON-GAAP FREE CASH FLOW 1. After-tax expenses excluded from non-GAAP net income. 2. Net cash provided by operating activities divided by net income attributable to Leidos common stockholders. 3. Free cash flow divided by non-GAAP net income attributable to Leidos common stockholders. Three Months Ended (in millions, except conversion ratio) October 2, 2026 October 3, 2025 Net cash provided by operating activities $ 523 $ 711 Payments for property, equipment and software (47) (31) Non-GAAP free cash flow $ 476 $ 680 Net income attributable to Leidos common stockholders $ 410 $ 367 Acquisition, integration and restructuring costs(1) 11 3 Amortization of acquired intangibles(1) 26 25 Asset impairment charges(1) 5 2 Non-GAAP net income attributable to Leidos common stockholders $ 452 $ 397 Operating cash flow conversion ratio(2) 128 % 194 % Non-GAAP free cash flow conversion ratio(3) 105 % 171 %