Leidos Holdings has adjusted its 2026 financial outlook upward, raising the lower end of its adjusted profit-per-share and revenue forecasts on the back of stronger demand for its defense-related offerings. The company said increased orders for military technology, continued work in energy and air traffic management, and support for intelligence missions underpinned the revision.
Market reaction was immediate: Leidos shares climbed nearly 10% during morning trading after the company disclosed the guidance change.
Guidance changes and analyst context
The firm lifted the lower bound of its adjusted earnings-per-share forecast for fiscal 2026 to $12.20 from $12.10 while leaving the upper bound unchanged at $12.50. Using the midpoint of the updated range, the company’s guidance now sits above the analysts’ consensus of $12.33 per share, according to data compiled by LSEG.
On the revenue side, Leidos now expects full-year sales between $18.2 billion and $18.4 billion, an increase on the lower end from the prior range of $18.0 billion to $18.4 billion.
Quarterly results
For the second quarter, Leidos reported revenue of $4.56 billion, a 7% increase from the same period a year earlier. That quarterly top line also exceeded Wall Street estimates of $4.44 billion.
Drivers cited by management
The company attributed the stronger-than-expected performance and the guidance adjustment to rising demand for its defense technology products and services, growth in energy-related work, expanded air traffic management solutions and continued contracts supporting intelligence missions. Leidos framed these demand trends against a broader backdrop of governments prioritizing military spending.
Specifically, the company noted that defense contractors in general have been benefiting as the U.S. government prioritizes military investment, referencing a proposed record military budget of $1.5 trillion for fiscal 2027.
Market implications
The combination of an EPS guidance bump, higher minimum revenue expectations and a quarterly revenue beat prompted the sharp intraday move in the company’s stock. Investors appeared to price in the stronger demand signals announced alongside the company’s results.