Q4 2025 Leidos Holdings Inc Earnings Call

February 17, 2026

Operator: Mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you'll need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker, Stuart Davis, from Investor Relations. Stuart, you may begin.

After the speaker's presentation, there will be a question and answer session to ask a question during the session. You'll need to press star 1. 1 on your telephone, you will then hear an automated message. Advising your hand is raised to withdraw your question. Please press star 1 1 again, please be advised. That today's conference is being recorded, I would now like to hand the conference over to your first Speaker, Stuart Davis from investor relations, Stuart you may begin

Thank you, operator, and good morning everyone. I'd like to welcome you to our fourth quarter and fiscal year 2025 earnings conference call.

Joining me today are Tom Bell. Our CEO and Chris cage our CFO.

Today's call is being webcast on the investor relations portion of our website where you'll also find the earnings release and supplemental Financial presentations, slides that we're using today.

Stuart Davis: Thank you, operator, and good morning, everyone. I'd like to welcome you to our Q4 and fiscal year 2025 earnings conference call. Joining me today are Tom Bell, our CEO, and Chris Cage, our CFO. Today's call is being webcast on the investor relations portion of our website, where you'll also find the earnings release and supplemental financial presentation slides that we're using today. Turning to slide 2 of the presentation, today's discussion contains forward-looking statements based on the environment as we currently see it, and as such, does include risks and uncertainties. Please refer to our press release for more information on the specific risk factors that could cause actual results to differ materially. Finally, as shown on slide 3, we'll discuss GAAP and non-GAAP financial measures. A reconciliation between the two is included in today's press release and presentation slides.

Turning the slide to the presentation today is discussion contains forward-looking statements based on the environment as we currently see it. And as such does include risks and uncertainties, please refer to our press release for more information on the specific risk factors that could cause actual results to differ materially.

Finally, as shown on slide 3, we'll discuss gaap and non-gaap financial measures a Reconciliation between the 2 is included. In today's press, release and presentation, slides with that. Let me turn the call over to Tom Bell. We'll begin on slide 4.

Thank you, Stuart and good morning, everyone.

I'm pleased, you've been able to join us to discuss another strong quarter for Lidos capping off an outstanding 2025.

Of course 2025 was a very Dynamic year.

Stuart Davis: With that, let me turn the call over to Tom Bell, who'll begin on slide 4.

The complexities of Doge early and the longest US Government shutdown toward the end.

Tom Bell: Thank you, Stuart, and good morning, everyone. I'm pleased you've been able to join us to discuss another strong quarter for Leidos, capping off an outstanding 2025. Of course, 2025 was a very dynamic year. The complexities of DOGE early and the longest US government shutdown toward the end. But despite these challenges, we were able to deliver on our promises, importantly, first to our customers and as a result, to our shareholders. We're pleased to have recorded 2025 revenue toward the top of our guidance, and earnings and cash ended the year above our guidance. 2025 adjusted EBITDA margin was 14.1%, a year-over-year increase of 120 basis points. Non-GAAP diluted earnings per share grew by 17%, and free cash flow grew by 26%.

but despite these challenges, we were able to deliver on our promises importantly, first to our customers and as a result to our shareholders

We're pleased to have recorded 2025 Revenue toward the top of our guidance.

And earnings in cash entered the year above our guidance.

2025, adjusted Eva to margin was, 14.1% a year-over-year increase of 120 basis points.

Non-gaap diluted earnings per share. Grew by 17%.

And precache flow grew by 26%.

Q4 Revenue was 4.2 billion. A year-over-year, decrease of 3.6%.

but normalized for the extra week in our fourth quarter of 2024 and the 6 week government shutdown in 2025

Q4 Revenue would have grown approximately 4%.

Chris will give you all the details on our financials later on this call.

Tom Bell: Q4 revenue was $4.2 billion, a year-over-year decrease of 3.6%. But normalized for the extra week in our fourth quarter of 2024 and the six-week government shutdown in 2025, Q4 revenue would have grown approximately 4%. Chris will give you all the details on our financials later on this call. In addition to those financials, another significant highlight of our fourth quarter was net bookings of $5.6 billion, delivering a book-to-bill ratio of 1.3x. This matched the 1.3 book-to-bill ratio we also delivered in the third quarter of 2025, and our year-over-year funded backlog is up 15%. This momentum illustrates our North Star strategy's strong alignment with administration priorities and enduring trends. Let me mention a few of our key awards in the quarter.

In addition to those financials another significant highlight of our fourth quarter was net, bookings of 5.6 billion, delivering a book to Bill ratio of 1.3 times.

This matched the 1.3 booked to Bill ratio. We also delivered in the third quarter of 2025

And our year-over-year funded backlog is up 15%.

This. Momentum. Illustrates our Northstar strategies, strong alignment with Administration, priorities, and enduring trends.

Let me mention a few of our key Awards in the quarter.

The Air Force. Awarded us a 5-year. 2.2 billion contract to deploy loces, passive radar systems for base defense against fixed and rotary Wing aircraft and cruise missiles.

This award validates years of investment in our Alps and marada systems that detect threats without emitting a signal.

Tom Bell: The Air Force awarded us a five-year, $2.2 billion contract to deploy Leidos' passive radar systems for base defense against fixed and rotary wing aircraft, and cruise missiles. This award validates years of investment in our ALPS and Marauder systems that detect threats without emitting a signal. Our continued IRAD investment in this powerful technology is precisely what the administration is asking for, and Leidos is pleased that the US Air Force has recognized our capabilities with this order. Leidos also won a new six-year, $455 million Air Force Cloud One Next Architecture and Common Shared Services program. Leveraging our experience in Zero Trust, automation, and multi-cloud brokering, we will deliver the ubiquitous, secure, commercial-grade technology the Department of War requires across the globe wherever the mission calls. We secured positions on two key 10-year IDIQs.

Our continued Ira investment in this powerful technology.

Is precisely what the administration is asking for.

And lytos is pleased that the US Air Force has recognized our capabilities with this order.

Lytos also won a new 6-year, 455 Million Air Force Cloud 1. Next architecture in common shared services program

Leveraging, our experience in zero, trust Automation and multicloud brokering. We will deliver the ubiquitous secure commercial-grade technology, the department of War requires the globe, wherever the mission calls.

We secured positions on 2 key 10-year idiq.

And the defense micro electronic activities.

25 billion program to modernize military technology through advanced engineering and prototyping.

Tom Bell: The Missile Defense Agency's $151 billion Shield program, supporting Golden Dome, and the Defense Microelectronic Activity's $25 billion program to modernize military technology through advanced engineering and prototyping. Though neither of these IDIQs are counted in our backlog numbers, both vehicles provide streamlined access for Leidos to bring innovative solutions to top-priority national security missions. I'm also especially pleased with the building blocks of profitable growth we are assembling. We are maintaining a productive working relationship with this administration, increasing the rate of investment in our growth pillars, and realigning our organization to best implement our NorthStar 2030 strategy. 2025 has proven that our efforts to anticipate the uniquely challenging national security environment we are in were spot on.

Though neither of these idiq are counted in our backlog numbers, both vehicles, provide streamlined access for Lidos to bring innovative solutions to top priority National Security missions.

I'm also especially pleased with the building blocks of profitable growth. We are assembling

we are maintaining a productive working relationship with this Administration.

Increasing the rate of investment in our growth pillars and realigning, our organization to best. Implement our Northstar 2030 strategy.

2025 has proven that our efforts to anticipate the uniquely challenging National Security environment. We are in were spot-on.

Our customers need a new kind of national security company that delivers Cutting Edge, hardware, and software combined.

To tackle challenges quickly. And at scale.

They need the best commercial Tech, integrated into those solutions from undersea to space to cyber.

Tom Bell: Our customers need a new kind of national security company that delivers cutting-edge hardware and software combined to tackle challenges quickly and at scale. They need the best commercial tech integrated into those solutions, from undersea, to space, to cyber. And they need industry partners that can secure the homeland while enabling global operations to secure the peace. Leidos brings the speed, scale, security, and portfolio that uniquely responds to today's environment. We are redefining what it means to be a national security company, and we are excited to be accelerating outcomes. So we are now firmly in strategy execution mode for our NorthStar 2030 strategy with a strong bias for velocity and a strong, productive sense of urgency. As evidence of this, let me recap a couple of the bigger steps we've taken in line with our NorthStar 2030 strategy.

And they need industry partners that can secure the Homeland while enabling Global operations to secure the peace.

Lidos brings the speed scale security and portfolio that uniquely responds to today's environment.

We are redefining what it means to be a national security company. And we are excited to be accelerating outcomes.

So we are now firmly in strategy, execution mode for our Northstar 2030 strategy with us, strong bias for velocity, and a strong productive sense of urgency.

As evidence of this, let me recap a couple of the bigger steps we've taken in line with our Northstar 2030 strategy.

In may we acquired kudu Dynamics.

Bringing Exquisite cyber capabilities to our cyber growth pillar and providing deep differentiators across the company.

Koodo represents a highly focused technology-rich company.

Through which we had a clear strategy to drive increased Lidos value.

The acquisition is already performing exceptionally well.

Tom Bell: In May, we acquired Kudu Dynamics, bringing exquisite cyber capabilities to our cyber growth pillar and providing deep differentiators across the company. Kudu represents a highly focused, technology-rich company through which we had a clear strategy to drive increased Leidos value. The acquisition is already performing exceptionally well, generating rapid growth, providing entry into new markets, and sustaining robust profitability. And we have taken steps to tightly align our business around our energy growth pillar. In October, we divested Varec, a non-core legacy energy asset. And last month, we agreed to acquire ENTRUST Solutions Group, and ENTRUST is a top energy engineering firm with a consistent track record of growth and strong profitability. Together, we have the scale to be a power engineering and design leader in the US.

Generating rapid growth. Providing entry into new markets and sustaining robust profitability.

And we have taken steps to tightly aligned our business around our energy growth pillar.

In October, we divested Barack a non-core legacy energy asset.

And last month, we agreed to acquire and Trust solutions group.

And trust is a top energy engineering firm with a consistent track record of growth and strong profitability.

Together, we have the scale to be a power engineering and design leader in the US.

And with the deals, clear cross, sell Revenue opportunities and cost synergies along with the deployment of our powerful AI enabled tools.

We will increase our competitiveness in this high growth Market.

These actions improve our business mix while maintaining our strong balance sheet.

Tom Bell: With the deals, clear cross-sell revenue opportunities and cost synergies, along with the deployment of our powerful AI-enabled tools, we will increase our competitiveness in this high-growth market. These actions improve our business mix while maintaining our strong balance sheet. In keeping with our strategy, we are also investing organically in support of our national security priorities. In 2025, we invested $312 million in IRAD and capital expenditures to fund amazing innovations and develop radical solutions. As a result, programs like IFPC, Wide Field of View, and Maritime Autonomy are ready to scale up to meet customer demand. In fact, we've increased our investments in solutions in each of the last three years, and that will continue in 2026.

Tom Bell: maintaining robust profitability. We have taken steps to tightly align our business around our energy growth pillar. In October, we divested Varec, a non-core legacy energy asset. Last month, we agreed to acquire ENTRUST Solutions Group. ENTRUST is a top energy engineering firm with a consistent track record of growth and strong profitability. Together, we have the scale to be a power engineering and design leader in the US. With the deals, clear cross-sell revenue opportunities, and cost synergies, along with the deployment of our powerful AI-enabled tools, we will increase our competitiveness in this high-growth market. These actions improve our business mix while maintaining our strong balance sheet. In keeping with our strategy, we are also investing organically in support of our national security priorities.

And in keeping with our strategy, we are also investing organically in support of our national security priorities.

We have taken steps to tightly align our business around our energy growth pillar.

In October we divested <unk>, a non core legacy energy asset.

In 2025, we invested 312 million in IRA and capital expenditures to fund. Amazing Innovations, and develop, radical Solutions.

And last month, we agreed to acquire in Trust solutions group.

And trust as a top energy engineering firm with a consistent track record of growth and strong profitability.

As a result programs, like if pick wide field of view and Maritime autonomy are ready to scale up to meet customer demand.

Together, we have the scale to be a power engineering and design leader in the U S.

in fact, we've increased our investments in Solutions in each of the last 3 years,

And that will continue in 2026.

And with the deals clear cross sell revenue opportunities and cost synergies along with the deployment of our powerful AI enabled tools.

As I said earlier, regarding the US Air Force award.

We will increase our competitiveness in this high growth market.

The administration is looking to partner with firms that are willing and able to lean into Innovation and put their money behind their technical prowess.

These actions improve our business mix, while maintaining our strong balance sheet.

And in keeping with our strategy. We are also investing organically in support of our national security priorities.

Tom Bell: As I said earlier regarding the US Air Force award, the administration is looking to partner with firms that are willing and able to lean into innovation and put their money behind their technical prowess. We are currently negotiating several important, exciting co-investment opportunities with this administration around critical warfighting and national needs, where we have unique capabilities in the defense, tech, and mission system space. So to continue to seize on the opportunities in front of us, we will triple our capital expenditure investments this year to $350 million. This will be used to make key capitalized investments, expand production capacity, and expand and upgrade our classified facilities. These investments are for key national priority, high-return projects for our customers that we expect to accelerate our growth in the near term.

We are currently negotiating. Several important exciting co-investment opportunities with this Administration around critical War, fighting and National needs where we have unique capabilities, in the defense Tech and mission system space.

Tom Bell: In 2025, we invested $312 million in IRAD and capital expenditures to fund amazing innovations and develop radical solutions. As a result, programs like IFPC, Wide Field of View, and Maritime Autonomy are ready to scale up to meet customer demand. In fact, we've increased our investments in solutions in each of the last three years, and that will continue in 2026. As I said earlier regarding the U.S. Air Force award, the administration is looking to partner with firms that are willing and able to lean into innovation and put their money behind their technical prowess. We are currently negotiating several important, exciting co-investment opportunities with this administration around critical warfighting and national needs, where we have unique capabilities in the defense, tech, and mission system space.

In 2025, we invested $312 million in Iraq, and capital expenditures to fund amazing innovations and develop radical solutions.

So to continue to seize on the opportunities. In front of us, we will triple our capital expenditure Investments. This year to 350 million.

As a result programs like if pik wide field of view and maritime autonomy are ready to scale up to meet customer demand.

This will be used to make key capitalized Investments, expand production capacity and expand and upgrade our classified facilities.

In fact, we've increased our investments in solutions in each of the last three years.

For our customers that we expect to accelerate our growth in the near term.

That will continue in 2026.

As I said earlier regarding the U S Air Force Award.

And we will accomplish all this while holding on to the profitability.

The administration is looking to partner with firms that are willing and able to lean into innovation and put their money behind their technical prowess.

that we've proven for this business over the recent years,

We are currently negotiating several important exciting co investment opportunities with this administration around critical war fighting and national needs, where we have unique capabilities in the defense Tech in mission systems space.

With our Northstar 2030 strategy in place. And gaining traction, organic and inorganic investments will become more prevalent in our Capital Management strategy.

Tom Bell: We will accomplish all this while holding on to the profitability that we've proven for this business over the recent years. With our NorthStar 2030 strategy in place and gaining traction, organic and inorganic investments will become more prevalent in our capital management strategy. Also, I'm pleased to advise that I have realigned our organization to best execute our growth strategy. Form follows function. We will continue to operate in five sectors that roll up into four reporting segments, and we believe this NorthStar 2030 organizational construct will best align how we report financial performance in line with our NorthStar strategy and business priorities. Defense, led by Cindy Gruensfelder, takes our portfolio of defense tech programs and adds Department of War programs in the areas of force protection, mission software, and logistics that were formerly in our national security sector.

also, I'm pleased to advise that I have, I realized our organization to best execute our growth strategy, form follows function

Tom Bell: So to continue to seize on the opportunities in front of us, we will triple our capital expenditure investments this year to $350 million. This will be used to make key capitalized investments, expand production capacity, and expand and upgrade our classified facilities. These investments are for key national priority, high-return projects for our customers that we expect to accelerate our growth in the near term. We will accomplish all this while holding on to the profitability that we've proven for this business over the recent years. With our NorthStar 2030 strategy in place and gaining traction, organic and inorganic investments will become more prevalent in our capital management strategy. Also, I'm pleased to advise that I have realigned our organization to best execute our growth strategy. Form follows function.

So to continue to seize on the opportunities in front of US we will triple our capital expenditure investments this year to $350 million.

We will continue to operate in 5 sectors that roll up into 4 reporting segments.

This will be used to make key capitalized investments expand production capacity and expand and upgrade our classified facilities.

And we believe this Northstar 2030 organizational. Construct. Will best align how we report financial performance in line with our Northstar strategy and business priorities.

These investments are for key national priority high return projects for our customers that we expect to accelerate our growth in the near term.

And we will accomplish all this while holding on to the profitability.

Defense led by Cindy grunsfeld takes our portfolio of Defense tech programs and adds Department of War. Programs in the areas of force protection Mission software and Logistics that were formerly in our national security sector.

That we've proven for this business over the recent years.

With our Northstar 2030 strategy in place and gaining traction organic and inorganic investments will become more prevalent in our capital management strategy.

This will better enable Cindy to prosecute, integrated Defence efforts like golden dome and c5isr.

This segment will continue to house our space and Maritime growth pillar.

Also I'm pleased to advise that <unk> realigned our organization to best execute our growth strategy.

Homeland brings together all losses, business that play a key role in securing the Homeland. The number 1 priority of this Administration,

<unk> follows function.

Tom Bell: This will better enable Cindy to prosecute integrated defense efforts like Golden Dome and C5ISR. This segment will continue to house our space and maritime growth pillar. Homeland brings together all Leidos' business that play a key role in securing the homeland, the number one priority of this administration. It combines our commercial and international business with our Homeland Security work, and air traffic management portfolio previously in National Security, and Health and Civil, respectively. This segment also includes our energy infrastructure growth pillar for a more resilient American energy infrastructure and our mission software for key customers like the FAA. With Vicki Schmanske retiring, Roy Stevens will lead Homeland. Intelligence sharpens our focus on innovative technologies and services for the US intelligence community.... This sector leads full-spectrum cyber growth pillar and aggressively advances mission software for our IC customers.

Tom Bell: We will continue to operate in 5 sectors that roll up into 4 reporting segments. We believe this North Star 2030 organizational construct will best align how we report financial performance in line with our North Star strategy and business priorities. Defense, led by Cindy Gruensfelder, takes our portfolio of defense tech programs and adds Department of War programs in the areas of force protection, mission software, and logistics that were formerly in our national security sector. This will better enable Cindy to prosecute integrated defense efforts like Golden Dome and C5ISR. This segment will continue to house our space and maritime growth pillar. Homeland brings together all Leidos' business that play a key role in securing the homeland, the number 1 priority of this administration.

We will continue to operate in five sectors that roll up into four reporting segments.

And we believe this Northstar 2030 organizational construct will best align how we report financial performance in line with our North Star strategy and business priorities.

It combines our commercial and international business with our homeland security work and air traffic management portfolio previously, in National Security and health and civil respectively.

Defense led by Cindy Grunsfeld or takes our portfolio of defense Tech programs and ads department of or programs in the areas of Forest Protection mission software and logistics that were formerly in our national security sector.

this segment also includes our energy infrastructure growth pillar for a more resilient American Energy infrastructure and our mission software for key customers like the FAA

with Vicky shamansky retiring, Roy Stevens will lead Homeland.

Intelligence sharpens, our focus on Innovative Technologies and services for the US intelligence community.

This will better enable cindy to prosecute integrated defense efforts like Golden Dome and <unk> ISR.

This segment will continue to house, our space in maritime growth pillar.

This sector leads full spectrum. Cyber growth pillar and aggressively advances Mission software for our IC customers.

Homeland brings together all of <unk> business that play a key role in securing the homeland. The number one priority of this administration.

Serving our intelligence agencies and making sure that we have the smartest government on the face of the earth is a real passion for me.

Tom Bell: It combines our commercial and international business with our Homeland Security work and air traffic management portfolio previously in national security and health and civil, respectively. This segment also includes our energy infrastructure growth pillar for a more resilient American energy infrastructure and our mission software for key customers like the FAA. With Vicki Schmanske retiring, Roy Stevens will lead Homeland. Intelligence sharpens our focus on innovative technologies and services for the US intelligence community. This sector leads full-spectrum cyber growth pillar and aggressively advances mission software for our IC customers. Serving our intelligence agencies and making sure that we have the smartest government on the face of the earth is a real passion for me, and that passion is shared by Jason O'Connor, a longtime Leidosian, who also spearheaded the Kudu acquisition and has stepped up to lead our intelligence sector.

It combines our commercial and international business with our Homeland security work and air traffic management portfolio previously in National Security and health and civil respectively.

And that passion is shared by Jason oconor. A long time lissan who also spearheaded the kudu acquisition and has stepped up to lead our intelligence sector.

Tom Bell: Serving our intelligence agencies and making sure that we have the smartest government on the face of the earth is a real passion for me, and that passion is shared by Jason O'Connor, a longtime Leidosian, who also spearheaded the Kudu acquisition and has stepped up to lead our intelligence sector. Digital Modernization, led by Steve Hull, continues as a standalone growth pillar, delivering IT modernization services and solutions for all customers, while also providing CIO and CISO functions for Leidos. Steve and his team are embracing our AI-first philosophy to exploit AI for a more efficient Leidos and for more effective solutions to our customers. For financial reporting, the intelligence and digital modernization sectors roll up into the intelligence and digital segment. And last, but certainly not least, Health is led by Liz Porter. Liz is sharpening our focus on accelerating our managed health services growth pillar.

This segment also includes our energy infrastructure growth pillar for our more resilient American energy infrastructure and our mission software for key customers like the FAA.

Digital modernization led by Steve Hull continues. As a standalone growth pillar, delivering it modernization services and solutions for all customers while also providing CIO and ciso functions for Lidos

With Vicki <unk> retiring Roy Stevens will lead homeland.

Intelligence Sharpens, our focus on innovative technologies and services for the U S intelligence community.

Steven, his team are embracing. Our AI first philosophy to exploit AI for a more efficient Lidos and for more effective solutions to our customers.

This sector leads full spectrum cyber growth pillar and aggressively advances mission software for our IC customers.

For financial reporting. The intelligence and digital modernization sectors. Roll up into the intelligence and digital segment.

And last but certainly not least health is led by Liz Porter.

Serving our intelligence agencies, and making sure that we have the smartest government on the face of Europe is a real passion for me.

Liz is sharpening. Our focus on accelerating, our Managed Health Services growth pillar.

And that passion is shared by adjacent O'connor, a long timeline dose Ian who also spearheaded the kudu acquisition and has stepped up to lead our intelligence sector.

Tom Bell: Digital Modernization, led by Steve Hull, continues as a standalone growth pillar, delivering IT modernization services and solutions for all customers, while also providing CIO and CISO functions for Leidos. Steve and his team are embracing our AI-first philosophy to exploit AI for a more efficient Leidos and for more effective solutions to our customers. For financial reporting, the intelligence and digital modernization sectors roll up into the intelligence and digital segment. And last, but certainly not least, Health is led by Liz Porter. Liz is sharpening our focus on accelerating our managed health services growth pillar. Managed health is of keen importance to Leidos and the nation... and we are positioning to expand this business by improved access to rural care and growing our health footprint with both the Department of War and the Veterans Administration. I've also made two other changes to our leadership team.

Digital modernization led by Steve whole continues as a standalone growth pillar delivering it modernization services and solutions for all customers, while also providing CIO and <unk> functions for lighthouse.

Managed health is of keen importance to lytos and the nation. And we are positioning to expand this business by improved access to rural care and growing, our health footprint, with both the department of War and the Veterans Administration.

Also made 2 other changes to our leadership team.

Tom Bell: Managed health is of keen importance to Leidos and the nation, and we are positioning to expand this business by improved access to rural care and growing our health footprint with both the Department of Defense and the Veterans Administration. I've also made 2 other changes to our leadership team. First, Ted Tanner has joined us to be our new Chief Technology Officer. A veteran of multiple Silicon Valley startups, Ted brings a proven track record of bold innovation. He has led the development of AI and machine learning capabilities for the Department of Defense, intelligence, and civilian agencies. Ted embraces the hardest problems, brings clarity to complexity, elevates the teams around him, and delivers outcomes that matter. Ted succeeds Jim Carlini, whose leadership laid the technical foundation on which we're building our robust future.

First, Ted Tanner has joined us to be our new Chief technology officer.

Steve and his team are embracing our AI first philosophy to exploit AI for a more efficient light us and from our effective solutions to our customers.

A veteran of multiple Silicon Valley startups.

Ted brings a proven track record of bold innovation.

For financial reporting the intelligence and digital modernization sectors roll up into the intelligence and digital segments.

He has led the development of AI and machine learning capabilities for the Department of War, intelligence, and civilian agencies.

And last but certainly not least health is led by Liz Porter.

Ted Embraces. The hardest problems. Brings Clarity to complexity elevates the teams around him and delivers outcomes, that matter.

Liz is sharpening our focus on accelerating our managed health services growth pillar.

Ted succeeds. Jim Carlini, whose leadership laid? The technical foundation on which we are building our robust future.

Managed health has a keen importance to lighthouse and the nation and we are positioning to expand this business by improved access to rural repair and growing our help footprint with both the department of war and the Veterans Administration.

I've asked Jim to remain at Lidos as a special adviser to me on National Security and other matters.

will Johnson, another longtime

I've also made two other changes to our leadership team.

Tom Bell: First, Ted Tanner has joined us to be our new Chief Technology Officer. A veteran of multiple Silicon Valley startups, Ted brings a proven track record of bold innovation. He has led the development of AI and machine learning capabilities for the Department of Defense, intelligence, and civilian agencies. Ted embraces the hardest problems, brings clarity to complexity, elevates the teams around him, and delivers outcomes that matter. Ted succeeds Jim Carlini, whose leadership laid the technical foundation on which we're building our robust future. I've asked Jim to remain at Leidos as a special advisor to me on national security and other matters. Will Johnson, another longtime Leidosian, has taken on a new role as our Enterprise Transformation Leader. I'm charging Will with driving significant outcomes in workplace efficiency through business process reengineering, unlocked via the power of technology, particularly AI.

First Ted Turner has joined us to be our new Chief Technology Officer.

Tom Bell: I've asked Jim to remain at Leidos as a special advisor to me on national security and other matters. Will Johnson, another longtime Leidosian, has taken on a new role as our Enterprise Transformation Leader. I'm charging Will with driving significant outcomes in workplace efficiency through business process reengineering, unlocked via the power of technology, particularly AI. Will's mission is to deliver measurable, transformational cost reduction outcomes for us and then help transfer them into our customer solutions. So in summary, 2025 was another very positive year for Leidos, and given that what's past is prologue, I'm convinced that 2026 will be a year that traction from our strategic action becomes even more evident.

A veteran of multiple Silicon Valley startups Ted.

Engineering unlocked via the power of Technology, particularly AI.

Ted brings a proven track record of bold innovation.

Will's mission is to deliver, measurable transformational cost, reduction outcomes for us.

He has led the development of AI and machine learning capabilities for the department of or intelligence and civilian agencies.

And then help transfer them into our customer Solutions.

Ted embraces the hardest problems brings clarity to complexity elevates the teams around him and delivers outcomes that matter.

so, in summary, 2025 was another very positive year for Lidos

Ted succeeds, Jim Carlini, whose leadership laid the technical foundation on which we're building our robust future.

and given that what's past is prologue, I'm convinced that 2026 will be a year that traction from our strategic actions becomes even more evident

I've asked Jim to remain at light OS as a special advisor to me on National Security and other matters.

We will lock in the cultural and financial gains from 2 0, 2 3, 2 4.

We'll Johnson another longtime led ocean has taken on a new role as our enterprise transformation leader.

Demonstrate the power of Northstar 2030 strategy, its growth pillars, and our alignment with this administration's priorities.

Charging will with driving significant outcomes in workplace efficiency through business process reengineering unlocked via the power of technology, particularly AI.

and Propel ourselves into 2027 with even stronger, success, and momentum

Tom Bell: We will lock in the cultural and financial gains from 2023, 2024, and 2025, demonstrate the power of NorthStar 2030 strategy, its growth pillars, and our alignment with this administration's priorities, and propel ourselves into 2027 with even stronger success and momentum. With that, now I'll pass the call over to Chris for a deeper look at our 2025 results and our financial guidance for 2026. Chris?

With that. Now I'll pass the call over to Chris for a deeper. Look at our 2025 results and our financial guidance for 2026.

Chris.

Tom Bell: Will's mission is to deliver measurable, transformational cost reduction outcomes for us, and then help transfer them into our customer solutions. So in summary, 2025 was another very positive year for Leidos, and given that what's past is prologue, I'm convinced that 2026 will be a year that traction from our strategic action becomes even more evident. We will lock in the cultural and financial gains from 2023, 2024, and 2025. Demonstrate the power of NorthStar 2030 strategy, its growth pillars, and our alignment with this administration's priorities, and propel ourselves into 2027 with even stronger success and momentum. With that, now I'll pass the call over to Chris for a deeper look at our 2025 results and our financial guidance for 2026. Chris?

<unk> mission is to deliver measurable transformational cost reduction outcomes for us and then help transfer them into our customer solutions.

Thanks Tom and good morning, everyone.

So in summary, 2025 was another very positive year for lighthouse.

As Tom highlighted 2025 was an outstanding year for lettuce marking, the third straight year of double digit, non-gaap earnings and cash flow growth.

And given that whats past is prologue I am convinced that 2026 will be a year that traction from our strategic action becomes even more evident.

We are focused on and delivering sustainable growth over the long term.

Chris Cage: Thanks, Tom, and good morning, everyone. As Tom highlighted, 2025 was an outstanding year for Leidos, marking the third straight year of double-digit non-GAAP earnings and cash flow growth. We are focused on and delivering sustainable growth over the long term. Also, as Tom mentioned, despite external market pressures, performance exceeded initial projections across nearly all key metrics, enabling us to raise guidance twice this year and exceed the top end of our margin, earnings, and cash flow ranges this quarter. Our performance stands as a testament to the strength of our differentiated portfolio, the precision of our NorthStar 2030 strategy, and the discipline and agility of our entire team. Please turn to slide 5. For the year, revenues of $17.2 billion were up 3.1%. For the quarter, revenues of $4.2 billion were down 3.6%.

Also is Tom mentioned despite external Market pressures performance, exceeded initial projections across nearly all key metrics.

We will lock in the cultural and financial gains from 'twenty to 'twenty three 'twenty four 'twenty five.

Enabling us to raise guidance twice this year and exceed the top end of our margin earnings and cash flow ranges this quarter.

Demonstrate the power of Northstar 2030 strategy its growth pillars, and our alignment with this administration's priorities.

And propel ourselves into 2027, with even stronger success and momentum.

Our performance stands as a testament to the strength of our differentiated portfolio, the Precision of our Northstar 2030 strategy, and the discipline and Agility of our entire team.

Please turn the slide 5.

With that now I'll pass the call over to Chris for a deeper look at our 2025 results and our financial guidance for 2026.

For the year, revenues of 17.2 billion were up 3.1%.

Chris.

Thanks, Tom and good morning, everyone.

As Tom highlighted 2025 was an outstanding year for items, marking the third straight year of double digit non-GAAP earnings and cash flow growth we.

For the quarter revenues of 4.2 billion were down. 3.6% year-over-year comparisons include the impact of 2. Major factors the 6 week. Government shutdown in 2025 and an extra work week in 2024 is part of our 445 Financial calendar.

We are focused on and delivering sustainable growth over the long term.

Also as Tom mentioned, despite external market pressures performance exceeded initial projections across nearly all key metrics, enabling us to raise guidance twice this year and exceed the top end of our margin earnings and cash flow ranges in this quarter.

These impacts were concentrated in the fourth quarters and the extra work week is about twice as impactful as the shutdown.

Chris Cage: Year-over-year comparisons include the impact of two major factors, the six-week government shutdown in 2025 and an extra workweek in 2024 as part of our 4-4-5 Financial Calendar. These impacts were concentrated in the fourth quarters, and the extra workweek is about twice as impactful as the shutdown. Together, these two factors decreased revenue growth by about 7 percentage points for the quarter and 2 percentage points for the year. The underlying business grew strongly across the entire portfolio, with especially robust demand in integrated air defense, intelligence community mission support, energy infrastructure, and full-spectrum cyber. Adjusted EBITDA margin for the fourth quarter was 13.2%, up 160 basis points year-over-year.

Together. These 2 factors decreased Revenue, growth by about 7 percentage points for the quarter and 2 percentage points for the year.

Our performance stands as a testament to the strength of our differentiated portfolio. The precision of our Northstar 2030 strategy and the discipline and agility of our entire team.

The underlying business grew strongly across the entire portfolio. With a specially robust demand in integrated air defense intelligence Community Mission support energy infrastructure and full spectrum cyber

Please turn to slide five.

For the year revenues of $17 2 billion were up three 1% for.

Adjusted Eva margin for the fourth quarter was 13.2% up 160 basis, points year-over-year.

For the quarter revenues of $4 2 billion were down three 6%.

Chris Cage: Year-over-year comparisons include the impact of two major factors: the 6-week government shutdown in 2025, and an extra workweek in 2024 as part of our 4-4-5 Financial Calendar. These impacts were concentrated in the Q4s, and the extra workweek is about twice as impactful as the shutdown. Together, these two factors decreased revenue growth by about 7 percentage points for the quarter and 2 percentage points for the year. The underlying business grew strongly across the entire portfolio, with especially robust demand in integrated air defense, intelligence community mission support, energy infrastructure, and full spectrum cyber. Adjusted EBITDA margin for the Q4 was 13.2%, up 160 basis points year-over-year.

On a full year basis. Adjusted Eva margin increased 120 basis points to 14.1%.

Year over year comparisons include the impact of two major factors. The six week government shutdown in 2025, and an extra workweek in 2024 as part of our 445 financial calendar.

Exceeding, the top end of our high 13s guidance from the last call.

Our margin expansion, Journey has meaningfully changed, how we view what is possible and that changed permeates the entire company.

These impacts were concentrated in the fourth quarters and the extra workweek is about twice as impactful as the shutdown.

Chris Cage: On a full year basis, adjusted EBITDA margin increased 120 basis points to 14.1%, exceeding the top end of our high 13s guidance from the last call. Our margin expansion journey has meaningfully changed how we view what is possible, and that change permeates the entire company. The sectors are more focused on program execution, with 6 consecutive quarters of positive net EACs, and all of our functional organizations are continually pursuing operating efficiencies. Non-GAAP diluted EPS was $2.76 for the quarter and $11.99 for the year. In 2025, non-GAAP diluted EPS was up 17%, $1.78 above 2024, and $0.24 above the high end of our prior guidance range. The primary driver of the robust EPS growth was consistently strong EBITDA.

Together. These two factors decreased revenue growth by about seven percentage points for the quarter and two percentage points for the year.

The sectors are more focused on program execution. With 6 consecutive quarters of positive, net, eac's, and all of our functional organizations are continually pursuing operating efficiencies

The underlying business grew strongly across the entire portfolio with especially robust demand in integrated air defense.

Non-gaap diluted EPS was $2.76 for the quarter and $11.99 for the year.

Intelligence community mission support energy infrastructure and full spectrum cyber.

In 2025 non-gaap diluted EPS was up. 17% a dollar and 78, cents above 2024 and 24 cents above the high, end of our prior guidance range.

Adjusted EBITDA margin for the fourth quarter was 13, 2% up 160 basis points year over year.

The primary driver of the robust, EPS growth was consistently, strong Ava.

Chris Cage: On a full year basis, Adjusted EBITDA margin increased 120 basis points to 14.1%, exceeding the top end of our high thirteens guidance from the last call. Our margin expansion journey has meaningfully changed how we view what is possible, and that change permeates the entire company. The sectors are more focused on program execution, with 6 consecutive quarters of positive Net EACs, and all of our functional organizations are continually pursuing operating efficiencies. Non-GAAP diluted EPS was $2.76 for the quarter and $11.99 for the year. In 2025, Non-GAAP diluted EPS was up 17%, $1.78 above 2024, and $0.24 above the high end of our prior guidance range. The primary driver of the robust EPS growth was consistently strong EBITDA.

On a full year basis, adjusted EBITDA margin increased 120 basis points to 14, 1% exceeding the top end of our high thirteen's guidance from the last call.

Growth was propelled further by a creative Capital deployment.

We retired 4.4% of our diluted share count over the year which contributed about 50 cents to eps.

Our margin expansion journey has meaningfully changed how we view it as possible and that changed permeates the entire company.

Turning now to an overview of our segment results on slide 6.

I'm proud that all 4 segments contributed to our strong results.

Our sectors are more focused on program execution with six consecutive quarters of positive net EAC.

Chris Cage: Growth was propelled further by accretive capital deployment. We retired 4.4% of our diluted share count over the year, which contributed about $0.50 to EPS. Turning now to an overview of our segment results on Slide 6. I'm proud that all four segments contributed to our strong results. Every segment grew revenues for the year and improved margins for the quarter and the year. Looking at the year-over-year revenue comparison, the extra workweek and shutdown had roughly the same impact on the sector as the company as a whole, with one exception. Commercial International was unaffected by the shutdown, and the extra workweek lowered growth by about 5 points for the quarter and 1 point for the year. National Security and Digital showed strong and consistent underlying growth.

Every segment grew revenues for the year and improved margins for the quarter and the year.

All of our functional organizations are continually pursuing operating efficiencies.

non-GAAP diluted EPS was $2 76 for the quarter and $11 99 for the year in.

Looking at the year-over-year revenue comparisons the extra work week and shutdowns had roughly the same impact on the sector as the company, as a whole, with 1 exceptionalists.

In 2025, non-GAAP diluted EPS was up 17% or $1, 78% above 2024, and 24 above the high end of our prior guidance range.

Commercial International was unaffected by the shutdown and the extra work week. Lowered growth by about 5 Points for the quarter, and 1 point for the year.

The primary driver of the robust EPS growth was consistently strong EBITDA.

To contributions from kudu. We had sustained uplift from the robust Business Development results over the past year.

Chris Cage: Growth was propelled further by accretive capital deployment. We retired 4.4% of our diluted share count over the year, which contributed about $0.50 to EPS. Turning now to an overview of our segment results on slide 6. I'm proud that all four segments contributed to our strong results. Every segment grew revenues for the year and improved margins for the quarter and the year. Looking at the year-over-year revenue comparison, the extra workweek and shutdown had roughly the same impact on the sector as the company as a whole, with one exception. Commercial International was unaffected by the shutdown, and the extra workweek lowered growth by about 5 points for the quarter and 1 point for the year. National Security and Digital showed strong and consistent underlying growth.

Growth was propelled further by accretive capital deployment.

We retired four 4% of our diluted share count over the year, which contributed about 50 EPS.

Segment non-gaap operating income. Margins Rose 160 basis points in the quarter and 20 basis points for the year, reflecting a more profitable business, mix and excellent execution.

Turning now to an overview of our segment results on slide six.

Chris Cage: In addition to contributions from Kudu, we had sustained uplift from the robust business development results over the past year. Segment non-GAAP operating income margins rose 160 basis points in the quarter and 20 basis points for the year, reflecting a more profitable business mix and excellent execution. Health and Civil revenues were up a bit for the year and down a bit for the quarter, absent the extra workweek and shutdown. The Managed Health Services business was a moderate headwind in the quarter and a moderate tailwind for the full year, and volumes on DIMSUM were lower as the electronic health record transitioned to a sustainment phase. Health and Civil non-GAAP operating margins increased 80 basis points in the quarter and 170 basis points for the year as the result of strong program and cost management, as well as technology-driven efficiencies.

Proud that all four segments contributed to our strong results.

Health and civil revenues were up a bit for the year and down a bit for the quarter absent, the extra work week in shutdown.

Every segment grew revenues for the year and improved margins for the quarter and the year.

Looking at the year over year revenue comparison, the extra work week in shutdown had roughly the same impact on the sector as the company as a whole with the one exception commercial international was unaffected by the shutdown and the extra work week lowered growth by about five points for the quarter and one point for the year.

The Managed Health Services business was a moderate headwind in the quarter and a moderate Tailwind for the full year. And volumes on dim sum were lower, as the electronic health record transitioned to a sustainment phase.

Health and civil non-gaap operating margins increased, 80 basis points in the quarter, and 170 basis points for the year, as the result of strong program and cost management as well as technology-driven efficiencies.

National Security and digital showed strong and consistent underlying growth. In addition to contributions from <unk>, we had sustained uplift from the robust business development the results over the past year.

Chris Cage: In addition to contributions from Kudu, we had sustained uplift from the robust business development results over the past year. Segment non-GAAP operating income margins rose 160 basis points in the quarter and 20 basis points for the year, reflecting a more profitable business mix and excellent execution. Health and Civil revenues were up a bit for the year and down a bit for the quarter, absent the extra workweek in shutdown. The Managed Health Services business was a moderate headwind in the quarter and a moderate tailwind for the full year, and volumes on MHS were lower as the electronic health record transitioned to a sustainment phase. Health and Civil non-GAAP operating margins increased 80 basis points in the quarter and 170 basis points for the year as the result of strong program and cost management, as well as technology-driven efficiency.

Accounting for the extra work week, commercial and international revenues, grew nicely in the quarter and the year.

Segment, non-GAAP operating income margins rose 160 basis points in the quarter and 20 basis points for the year, reflecting a more profitable business mix and excellent execution.

Segment growth was led by improved performance in the UK and increased engineering support for commercial utilities, which offset the varrock de vesture.

Chris Cage: Accounting for the extra workweek, Commercial and International revenues grew nicely in the quarter and the year. Segment growth was led by improved performance in the UK and increased engineering support for commercial utilities, which offset the Varec divestiture. Segment non-GAAP operating margins jumped 180 basis points in the quarter and 230 basis points for the year, with better performance across the C&I portfolio, driven by strong execution and business mix in the UK and Australia, operational gains in SES, and increased use of AI to accelerate grid engineering execution within commercial energy. Lastly, Defense Systems remains aligned with administration priorities and sustained robust revenue growth throughout 2025. Q4 performance was bolstered by accelerated production of small glide body munitions and ITPIC Increment 2 systems, as well as preparing for 2026 production on a range of systems.

Health and civil revenues were up a bit for the year and down a bit for the quarter absent the extra work week and shut down the managed services business was a moderate headwind in the quarter and a moderate tailwind for the full year and volumes on them. Some were lower as the electronic health record transitioned to a sustainment base.

Segment, non-gaap operating margins. Jumped 180 basis points in the quarter and 230 basis points for the year, with better performance across the cni portfolio. Driven by strong execution and business mix in the UK and Australia,

Operational gains in sees and increase use of AI to accelerate grid engineering execution within Commercial Energy.

Health and civil non-GAAP operating margin increased 80 basis points in the quarter and 170 basis points for the year as the result of strong program and cost management as well as technology driven efficiencies.

Lastly, defense systems remains aligned with the ministration priorities in sustained robust Revenue, growth throughout 2025.

Q4 performance was bolstered by accelerated production of small Glide. Yachty munitions.

And ific increment 2 systems.

Chris Cage: Accounting for the extra workweek, commercial and international revenues grew nicely in the quarter and the year. Segment growth was led by improved performance in the UK and increased engineering support for commercial utilities, which offset the Varec divestiture. Segment non-GAAP operating margins jumped 180 basis points in the quarter and 230 basis points for the year, with better performance across the C&I portfolio, driven by strong execution and business mix in the UK and Australia, operational gains in SES, and increased use of AI to accelerate grid engineering execution within commercial energy. Lastly, Defense Systems remains aligned with administration priorities and sustained robust revenue growth throughout 2025. Q4 performance was bolstered by accelerated production of small glide body munitions and IFPC Increment Two systems, as well as preparing for 2026 production on a range of systems.

Accounting for the extra workweek commercial and international revenues grew nicely in the quarter and the year.

As well as preparing for 2026 production on a range of systems.

Segment growth was led by improved performance in the U K and increased engineering support for commercial utilities, which offset the varick divestiture.

Segment, non-gaap operating margins Rose. 680 basis points in the quarter and 160 basis points for the year. As we moved into the production, phase on several Key Programs.

Segment, non-GAAP operating margins jumped 180 basis points in the quarter and 230 basis points for the year with better performance across the C&I portfolio, driven by strong execution and business mix in the U K and Australia operational gains and Ses and increased use of AI to ask.

Turning now to cash flow in the balance sheet on slide 7.

Chris Cage: Segment non-GAAP operating margins rose 680 basis points in the quarter and 160 basis points for the year as we moved into the production phase on several key programs. Turning now to cash flow and the balance sheet on Slide 7. Cash generation is a hallmark of Leidos, and we generated record fourth quarter and full-year operating cash flows of $495 million and $1.75 billion, respectively. Outperforming our cash flow guidance by $100 million reflects our commitment to profitable growth and $150 million in cumulative Section 174 cash tax savings, of which $75 million was realized in Q4. Netting out capital expenditures, free cash flow for the quarter was $452 million, or 127% of non-GAAP net income.

Cash generation is a Hallmark of letters and we generated records fourth quarter and full year operating cash flows of 495 million and 1.75 billion respectively.

<unk> grid engineering execution within commercial energy.

Lastly, defense systems remains aligned with the administration priorities and sustained robust revenue growth throughout 2025.

Outperforming our cash flow guidance by 100 million, reflects our commitment to profitable growth and 150 million in cumulative, section, 174 cash, tax savings of which 75 million was realized in Q4.

Q4 performance was bolstered by accelerated production of small glide body munitions and epic increment two systems as well as preparing for 2026 production on a range of system.

Netting out, Capital expenditures free. Cash flow for the quarter was 452 million or 127% of non-gaap net income.

Chris Cage: Segment non-GAAP operating margins rose 680 basis points in the quarter and 160 basis points for the year as we moved into the production phase on several key programs. Turning now to cash flow and the balance sheet on slide 7. Cash generation is a hallmark of Leidos, and we generated record fourth quarter and full-year operating cash flows of $495 million and $1.75 billion, respectively. Outperforming our cash flow guidance by $100 million reflects our commitment to profitable growth and $150 million in cumulative Section 174 cash tax savings, of which $75 million was realized in Q4. Netting out capital expenditures, free cash flow for the quarter was $452 million, or 127% of non-GAAP net income.

Segment, non-GAAP operating margins rose 680 basis points in the quarter and 160 basis points for the year as we moved into the production phase on several key programs.

For the year, free cash flow was 1.63 billion for a 104% conversion rate.

Turning now to cash flow and the balance sheet on slide seven.

In the fourth quarter, we repurchased 305 Million worth of shares and paid 55 million in dividends to end the year with 1.1 billion in cash and cash, equivalents

Cash generation is a hallmark of lighters, and we generated record fourth quarter and full year operating cash flows of $495 million and $1 75 billion respectively.

Chris Cage: For the year, free cash flow was $1.63 billion, for a 104% conversion rate. In the fourth quarter, we repurchased $305 million worth of shares and paid $55 million in dividends to end the year with $1.1 billion in cash and cash equivalents, $4.6 billion in debt, and a leverage ratio of 1.9x gross debt to Adjusted EBITDA. As Tom mentioned, we're excited to take advantage of our balance sheet to further the strategy through the acquisition of Entrust. We plan to pay the all-cash purchase price of $2.4 billion, with $500 million of cash on hand, $500 million in commercial paper that we will pay down during 2026, and $1.4 billion in new bonds.

4.6 billion in debt and a leverage ratio of 1.9 times gross debt to adjusted Ava.

As Tom mentioned, we're excited to take advantage of our balance sheet, to further the strategy, through the acquisition of Interest.

Outperforming our cash flow guidance by $100 million reflects our commitment to profitable growth and $150 million in cumulative section 174 cash tax savings of which $75 million was realized in Q4.

We plan to pay the all-cash purchase price of 2.4 billion with 500 million of cash on hand. 500 million in commercial paper that we will pay down during 2026 and 1.4 billion in new bonds.

Netting out capital expenditures free cash flow for the quarter was $452 million or 127% of non-GAAP net income for.

We expect the transaction to close in Q2 subject to regulatory approval and other customary closing conditions.

Chris Cage: For the year, free cash flow was $1.63 billion, for a 104% conversion rate. In the fourth quarter, we repurchased $305 million worth of shares and paid $55 million in dividends to end the year with $1.1 billion in cash and cash equivalents, $4.6 billion in debt, and a leverage ratio of 1.9 times gross debt to adjusted EBITDA. As Tom mentioned, we're excited to take advantage of our balance sheet to further the strategy through the acquisition of ENTRUST. We plan to pay the all-cash purchase price of $2.4 billion, with $500 million of cash on hand, $500 million in commercial paper that we will pay down during 2026, and $1.4 billion in new bonds.

For the year free cash flow was 163 billion for a 104% conversion rate.

At the time of close, our pro-forma, gross leverage will be, 2.6 times comfortably below our 3 times Target.

In the fourth quarter, we repurchased $305 million worth of shares and paid $55 million in dividends to end the year with $1 1 billion in cash and cash equivalents.

Chris Cage: We expect the transaction to close in Q2, subject to regulatory approval and other customary closing conditions. At the time of close, our pro forma gross leverage will be 2.6 times, comfortably below our 3 times target, affording us the capacity to capitalize on organic growth and potential future M&A opportunities in line with NorthStar 2030. Now on to the forward outlook on Slide 8. In 2025, our diversified portfolio proved resilient in evolving market conditions. As Tom said, 2026 will be the year that the impact of concentrating corporate investments and shaping the portfolio towards the growth pillars shows clear dividends as we accelerate growth throughout the year and further separate from the pack in 2027.

Affording us the capacity to capitalize on organic growth and potential future m&a opportunities in line with Northstar 2030.

Now, on to the forward, outlook on slide 8.

$4 6 billion in debt and a leverage ratio of one nine times gross debt to adjusted EBITDA.

In 2025 our Diversified portfolio. Proved resilient in evolving market conditions.

As Tom mentioned, we're excited to take advantage of our balance sheet to further this strategy through the acquisition of entrust with.

We plan to pay the all cash purchase price of $2 4 billion with $501 million of cash on hand $500 million in commercial paper that we will pay down during 2026 and $1 4 billion in new bonds.

As Tom said, 2026 will be the year that the impact of concentrating corporate Investments and shaping the portfolio towards the growth pillars shows, clear dividends as we accelerate growth throughout the year and further separate from the pack in 2027.

Chris Cage: We expect the transaction to close in Q2, subject to regulatory approval and other customary closing conditions. At the time of close, our pro forma gross leverage will be 2.6 times, comfortably below our 3 times target, affording us the capacity to capitalize on organic growth and potential future M&A opportunities in line with NorthStar 2030. Now on to the forward outlook on slide 8. In 2025, our diversified portfolio proved resilient in evolving market conditions. As Tom said, 2026 will be the year that the impact of concentrating corporate investment and shaping the portfolio towards the growth pillars shows clear dividends as we accelerate growth throughout the year and further separate from the pack in 2027.

We expect the transaction to close in Q2 subject to regulatory approval and other customary closing conditions.

Getting to the specifics for 2026, we expect revenues between 17.5 and 17.9 billion reflecting growth of up to 4% over 2025.

At the time of close our pro forma gross leverage will be two six times comfortably below our three times target.

Ending with sustained momentum. Double digits.

For guiding to Mid 13s. Adjusted ebata margin in 2026.

<unk> us the capacity to capitalize on organic growth and potential future M&A opportunities in line with Northstar 2030.

Chris Cage: Getting to the specifics, for 2026, we expect revenues between $17.5 and 17.9 billion, reflecting growth of up to 4% over 2025. We expect revenue growth will build throughout the year, ending with sustained momentum approaching double digits. We're guiding to mid-thirteens Adjusted EBITDA margin in 2026. This level normalizes some of the one-time benefits of 2025 and secures a sustainable baseline. We expect to continue to invest to accelerate our growth pillars, uphold our high level of program execution, maintain strong cost management, and drive indirect cost efficiencies through the enterprise transformation initiative. We expect non-GAAP diluted earnings per share between $12.05 and $12.45, which assumes interest expense of approximately $200 million and an effective tax rate of about 24%.

This level normalizes, some of the 1 time benefits of 2025 and secures a sustainable Baseline.

Now onto the forward outlook on slide eight.

In 2025, our diversified portfolio proved resilient and evolving market condition.

We expect to continue to invest to accelerate our growth pillars, uphold our high level of program execution.

As Tom said 2026 will be the year that the impact of concentrating corporate investment and shaping the portfolio towards the growth pillars shows clear dividend as we accelerate growth throughout the year and further separate from the pack in 2027.

Maintain strong cost management and drive indirect cost efficiencies through the Enterprise transformation initiative.

We expect non-gaap diluted earnings per share between 12 and 5 and $12.45.

Chris Cage: Getting to the specifics, for 2026, we expect revenues between $17.5 and 17.9 billion, reflecting growth of up to 4% over 2025. We expect revenue growth will build throughout the year, ending with sustained momentum approaching double digits. We're guiding to mid-13s Adjusted EBITDA margin in 2026. This level normalizes some of the one-time benefits of 2025 and secures a sustainable baseline. We expect to continue to invest to accelerate our growth pillars, uphold our high level of program execution, maintain strong cost management, and drive indirect cost efficiencies through the Enterprise Transformation Initiative. We expect non-GAAP diluted earnings per share between $12.05 and $12.45, which assumes interest expense of approximately $200 million and an effective tax rate of about 24%.

Getting to the specifics for 2026, we expect revenues between 17, 5% and $17 9 billion, reflecting growth of up to 4% over 2025.

Which assumes interest expense of approximately 200 million and an effective tax rate of about 24%.

We're also assuming a weighted average share count of approximately 129 million.

We expect revenue growth will build throughout the year ending with sustained momentum approaching double digits.

We expect another robust year of operating cash flow at 1.75 billion despite a NY Mills

We're guiding to mid thirteen's adjusted EBITDA margin in 2026 this level normalizes some of the onetime benefits of 2025.

Free cash flow will be down a bit as we triple our capex. Spend to 350 million.

Chris Cage: We're also assuming a weighted average share count of approximately 129 million. We expect another robust year of operating cash flow at $1.75 billion, despite a $90 million year-over-year headwind from Section 174 timing. Free cash flow will be down a bit as we triple our CapEx spend to $350 million. This guidance does not include any accommodation for the Entrust acquisition. We plan to update the guidance post-close, likely on our Q1 call. In 2026, we'll be operating in our new segment structure, and to help your modeling, we recast 2024 and 2025 financials in the new structure and filed them with our press release. Let me spend a few minutes outlining these segments and how we see them performing in 2026.

And secures a sustainable baseline.

We expect to continue to invest to accelerate our growth pillars.

This guidance does not include include any accommodation for the entrust acquisition. We plan to update the guidance, post close likely on our first quarter call.

All of our high level of program execution.

Maintaining strong cost management and drive indirect cost efficiencies through the enterprise transformation initiatives.

We expect non-GAAP diluted earnings per share between $12, five and $12 45.

In 2026. We'll be operating in our new segment structure and to help your modeling. We recast 2024 and 2025 financials in the new structure and filed them with our press release.

Let me spend a few minutes outlining these segments and how we see them performing in 26.

Which assumes interest expense of approximately $200 million and an effective tax rate of about 24%.

Chris Cage: We're also assuming a weighted average share count of approximately 129 million. We expect another robust year of operating cash flow at $1.75 billion, despite a $90 million year-over-year headwind from Section 174 timing. Free cash flow will be down a bit as we triple our CapEx spend to $350 million. This guidance does not include any accommodation for the EnTrust acquisition. We plan to update the guidance post-close, likely on our Q1 call. In 2026, we'll be operating in our new segment structure, and to help your modeling, we recast 2024 and 2025 financials in the new structure and filed them with our press release. Let me spend a few minutes outlining these segments and how we see them performing in 2026.

We're also assuming a weighted average share count of approximately $129 million.

The largest intelligence and digital was 5.7 billion in revenues in 2025 at 10.1% non-gaap operating income Market.

We expect another robust year of operating cash flow at 175 billion, despite a $90 million year over year headwind from section 174 times.

In 2026, we see mid to high single-digit Revenue growth at steady margins.

Free cash flow will be down a bit as we triple our capex spend to $350 million.

This trajectory is supported by a full year of kudu. The continued phase in of several large cyber and it Awards,

Chris Cage: The largest, Intelligence and Digital, was $5.7 billion in revenues in 2025 at 10.1% non-GAAP operating income margin. In 2026, we see mid- to high single-digit revenue growth at steady margins. This trajectory is supported by a full year of Kudu, the continued phase-in of several large cyber and IT awards, and an increasing velocity in our bid pipeline. Longer term, we expect to sustain mid-single-digit growth with opportunities for margin improvement. Last year, the health segment generated $4.7 billion in revenues, with non-GAAP operating income margin of 25.5%. In 2026, we expect modestly lower revenue and margin from the additional vendor on the VBA MDE work and continued transition on DIMSUM.

And an increasing velocity in our bid pipeline.

This guidance does not include any accommodation for the entrust acquisition.

Longer term. We expect to sustain mid single-digit, growth with opportunities for margin improvements.

We plan to update the guidance post close likely on our first quarter call.

In 2026, we'll be operating at our new segment structure and to help your modeling, we recast 2024, and 2025 financials and the new structure and filed them with our press release, let.

last year, the health segment generated 4.7 billion in revenues, with non-gaap operating income margin of 25.5%

in 2026, we expect modestly, lower revenue, and margin from the additional vendor on the VBA mde, work and continued, transition on dimsum

Let me spend a few minutes outlining these segments and how we see them performing in 2006.

Chris Cage: The largest, Intelligence and Digital, was $5.7 billion in revenues in 2025, at 10.1% non-GAAP operating income margin. In 2026, we see mid- to high single-digit revenue growth at steady margin. This trajectory is supported by a full year of Kudu, the continued phase-in of several large cyber and IT awards, and an increasing velocity in our bid pipeline. Longer term, we expect to sustain mid-single-digit growth with opportunities for margin improvement. Last year, the health segment generated $4.7 billion in revenues, with non-GAAP operating income margin of 25.5%. In 2026, we expect modestly lower revenue and margin from the additional vendor on the VBA MDE work and continued transition on DIMSUM.

The largest intelligence and digital was $5 $7 billion in revenues in 2025 at 10, 1% non-GAAP operating income margin.

In 2026, we see mid to high single digit revenue growth at steady margin.

Beyond 26, we see Health inflecting to growth and sustaining robust profitability above 20% as Administration priorities to unlock, make Market opportunities in Rural and Behavioral Health as well as enhanced automation to deliver better faster and cheaper solutions for our veterans.

This trajectory is supported by a full year of kudu. The continued phase in of several large cyber and it rewards and.

Chris Cage: Beyond 2026, we see Health inflecting to growth and sustaining robust profitability above 20% as administration priorities to unlock make market opportunities in rural and behavioral health, as well as enhanced automation to deliver better, faster, and cheaper solutions for our veterans. Homeland delivered $3.1 billion in revenues, with non-GAAP operating income margins of 9.2% in 2025. We expect growth to track the corporate average and keep that pace through the decade as global imperatives unfold. While margins are likely to be relatively stable in 2026, this portfolio's blend of fixed-price work and commercial exposure provides a clear opportunity for margin expansion over the longer term. In 2025, Defense accounted for $3.7 billion in revenues, with non-GAAP operating income margin of 10.1%.

Homeland delivered 3.1 billion in revenues, with non-gaap operating income margins of 9.2% in 25.

In an increasing velocity in our bid pipeline.

Longer term, we expect to sustain mid single digit growth with opportunities for margin improvement.

We expect growth to track the corporate average and keep that pace through the decade as Global imperatives unfold.

Last year, the health segment generated $4 7 billion in revenues with non-GAAP operating income margin of 25, 5%.

While margins are likely to be relatively stable in 26. This portfolio is blend of fixed price work and Commercial exposure provides a clear opportunity for margin expansion over the longer term.

In 2026, we expect modestly lower revenue and margin from the additional vendor on the BBA AMD work and continued transition on them some.

In 2025 defense, accounted for 3.7 billion in revenues, with non-gaap operating income margin of 10.1%.

Chris Cage: Beyond 26, we see health inflecting to growth and sustaining robust profitability above 20% as administration priorities to unlock make market opportunities in rural and behavioral health, as well as enhanced automation to deliver better, faster, and cheaper solutions for our veterans. Homeland delivered $3.1 billion in revenues, with non-GAAP operating income margins of 9.2% in 25. We expect growth to track the corporate average and keep that pace through the decade as global imperatives unfold. While low margins are likely to be relatively stable in 26, this portfolio's blend of fixed price work and commercial exposure provides a clear opportunity for margin expansion over the longer term. In 2025, defense accounted for $3.7 billion of revenues, with non-GAAP operating income margin of 10.1%.

Beyond 'twenty, six we see health inflicting to growth and sustaining robust profitability above 20% as administration priorities to unlock make market opportunities in rural and behavioral health as well as enhanced automation to deliver better faster and cheaper solutions for our veterans.

We anticipate Revenue growth above our corporate range in 26 with a modest decline in margins, as some high margin Airborne programs app. Looking further out, this segment with its more robust investment profile offers significant opportunity for growth and margin expansion through 2030 as increased Homeland defense opportunities, come online,

<unk> delivered $3 1 billion in revenues with non-GAAP operating income margins of nine 2% in 2005.

Chris Cage: We anticipate revenue growth above our corporate range in 2026, with a modest decline in margins as some high-margin airborne programs ebb. Looking further out, this segment, with its more robust investment profile, offers significant opportunity for growth and margin expansion through 2030 as increased homeland defense opportunities come online. With that, operator, we're ready for questions.

With that operator, we're ready for questions.

We expect growth to track the corporate average and keep that pace through the decade as global imperatives unfold.

While margins are likely to be relatively stable in 26. This portfolio is blend of fixed price work in commercial exposure provides a clear opportunity for margin expansion over the longer term.

Thank you as a reminder, to ask a question. Please press star 1, 1 on your telephone and wait for your name to be announced to withdraw your question. Please, press star 1 1, again please, stand by while we compile the Q&A roster.

Please limit yourselves to 1 question before getting back into the queue.

At this time, we will pause momentarily to assemble our Q&A roster.

In 2025 defense accounted for $3 7 billion of revenues with non-GAAP operating income margin of 10, 1% we.

Operator: Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Please limit yourselves to one question before getting back into the queue. At this time, we will pause momentarily to assemble our Q&A roster. Our first question will come from the line of Seth Seifman with JPMorgan. Your line is open. Please go ahead.

Our first question will come from the line of September with

JP Morgan. Your line is open. Please go ahead.

We anticipate revenue growth above our corporate range in 2006 with a modest decline in margins of some high margin airborne programs are looking further out this segment with its more robust investment profile offers significant opportunity for growth and margin expansion through 2030 as increased homeland defense.

Hey um, thanks very much and uh good morning.

<unk> come online.

With that operator, we're ready for questions.

Seth Seifman: Hey, thanks very much, and, good morning.

Chris Cage: Good morning, Seth.

Yeah.

Thank you as a reminder to ask a question. Please press star one on your telephone in late for your name to be announced to withdraw. Your question. Please press star one again, please stand by while we compile the Q&A roster. Please limit yourselves to one question before getting back into the queue.

Seth Seifman: I wanted to ask, starting off, could you talk a little bit about the investment areas that you're expecting to put additional CapEx in and the way that that supports, I assume, supports some of the ramp in the defense business, and to the extent that that may or may not be related to the co-investment opportunities you talked about with DOD?

I assume support some of the ramp in the uh in the in the defense business and, and to the extent that that may or may not be related to the co-investment opportunities. Uh, you talked about with with DOD.

At this time, we will pause momentarily to assemble the Q&A roster.

Yeah.

Our first question will come from the line of Seth Schiffman with.

Chris Cage: Sure. Let me, let me start by saying yes and. We are investing in potential co-development opportunities with the Department of Defense, but it's not exclusively with the Department of Defense. The Department of Transportation, the FAA, has significant program opportunities, as I'm sure you are aware, and we're very keen on investing in our health business to ensure that we continue to accelerate away from the pack in that important business to Leidos. So yes, as I said in my prepared remarks, Seth, we are negotiating several framework agreements with the Department of Defense when it comes to co-investment opportunities for exciting franchise programs for Leidos going forward.

Tom Bell: Sure. Let me, let me start by saying yes and. We are investing in potential co-development opportunities with the Department of Defense, but it's not exclusively with the Department of Defense. The Department of Transportation, the FAA, has significant program opportunities, as I'm sure you are aware, and we're very keen on investing in our health business to ensure that we continue to accelerate away from the pack in that important business to Leidos. So yes, as I said in my prepared remarks, Seth, we are negotiating several framework agreements with the Department of Defense when it comes to co-investment opportunities for exciting franchise programs for Leidos going forward.

J P. Morgan Your line is open. Please go ahead.

Seth Seifman: Hey, thanks very much, and good morning.

Hey, thanks, very much and good morning.

Chris Cage: Good morning, Seth.

Yes.

Seth Seifman: I wanted to ask, starting off, could you talk a little bit about the investment areas that you're expecting to put additional CapEx in, and the way that that supports, I assume supports some of the ramp in the defense business, and to the extent that that may or may not be related to the co-investment opportunities you talked about with the DOD?

I wanted to ask a start.

Starting off.

He can talk a little bit about the <unk>.

Investment areas that you're expecting to put additional capex in it and the way that that supports I assume support some of the ramp in the in the in the defense business and to the extent that that may or may not be related to the co investment opportunities.

Sure, let me let me start by saying yes and um, we are investing in potential. Co-development opportunities with the Department of War, but it's not exclusively with the Department of war, the Department of Transportation. The FAA has significant, uh, uh, program opportunities. As I'm sure you are aware. And, uh, we are very keen on investing in our health business. To ensure that we continue to accelerate away from the pack in that important business to lytos. So yes, as I said in my prepared remarks, Seth, uh, we are negotiating. Several framework agreements with the Department of War, when it comes to co-investment opportunities for exciting franchise programs for Lidos going forward,

You talked about with the T O D.

But that's not where all of that capex, and all of that investment is going. We're investing in all the growth pillars. Now that we have a sound key strategy to grow this company into the future,

Tom Bell: Sure. Let me start by saying yes and. We are investing in potential co-development opportunities with the Department of Defense, but it's not exclusively with the Department of Defense. The Department of Transportation, the FAA, has significant program opportunities, as I'm sure you are aware, and we're very keen on investing in our health business to ensure that we continue to accelerate away from the pack in that important business to Leidos. So yes, as I said in my prepared remarks, Seth, we are negotiating several framework agreements with the Department of Defense when it comes to co-investment opportunities for exciting franchise programs for Leidos going forward, but that's not where all of that CapEx and all of that investment is going.

Sure Let me, let me start by saying, yes and.

We are investing in potential co development opportunities with the department of war, but it's not exclusively with the Department of War and Department of Transportation. The FAA has significant.

Tom Bell: ... but that's not where all of that CapEx and all of that investment is going. We're investing in all the growth pillars now that we have a sound, key strategy to grow this company into the future.

Our program opportunities as I'm sure you are aware and we are very keen on investing in our health business to ensure that we continue to accelerate away from the pack in that important business Toledo's. So yes, as I said in my prepared remarks.

[Company Representative] (Leidos Holdings Inc): Yeah, Seth, I mean, just to dive a little deeper, and certainly in the defense area, that is the area that over the last few years, we've continued to ramp up our level of investment. You're seeing the results of that with the increasing growth rates. Looking ahead to 2026, certainly our maritime growth pillar is an area where you'll see an expansion of some of our facility space there. What we're doing in integrated air defense, the ABADs award is, again, a reinforcement that we have products that the government wants, and how do we ramp up our production capacity, hypersonics, et cetera. So there's a number of programs there that will support that investment, and we're looking forward to realizing the returns on those.

Chris Cage: Yeah, Seth, I mean, just to dive a little deeper, and certainly in the defense area, that is the area that over the last few years, we've continued to ramp up our level of investment. You're seeing the results of that with the increasing growth rates. Looking ahead to 2026, certainly our maritime growth pillar is an area where you'll see an expansion of some of our facility space there. What we're doing in integrated air defense, the ABADs award is, again, a reinforcement that we have products that the government wants, and how do we ramp up our production capacity, hypersonics, et cetera. So there's a number of programs there that will support that investment, and we're looking forward to realizing the returns on those.

We are negotiating several framework agreements with the department of war when it comes to co investment opportunities for exciting franchise programs for <unk> going forward.

Yes, Seth. I mean just in, just to dive a little deeper and certainly in the defense area that is the area that over the last few years, we've continued to ramp up our level of investment and you're seeing the results of that, with the increase in growth rates, looking ahead to 26. Certainly our Maritime growth builders in area where you'll see an expansion of some of our facility space there. Uh, what we're doing integrated air defense. The aads award is again a reinforcement that we have products that the government wants, and how do we ramp up our production capacity? Hypersonics Etc. So there's a number of programs there that will support that investment and, uh, we're looking forward to realizing the Returns on those

Great, great. And then maybe just as a quick follow-up, a little bit more, um, model.

But that's not where all of that Capex and all of that investment is going we're investing in all of the growth pillars now that we have a sound key strategy to grow this company into the future.

Tom Bell: We're investing in all the growth pillars now that we have a sound, key strategy to grow this company into the future.

Chris Cage: Yeah, Seth, I mean, just to, and just to dive a little deeper, and certainly in the defense area, that is the area that over the last few years we've continued to ramp up our level of investment, and you're seeing the results of that with the increasing growth rates. Looking ahead to 2026, certainly our maritime growth pillar is an area where you'll see an expansion of some of our facility space there. What we're doing in integrated air defense, the ABADS award is, again, a reinforcement that we have products that the government wants, and how do we ramp up our production capacity, hypersonics, et cetera. So there's a number of programs there that will support that investment, and we're looking forward to realizing the returns on those.

Seth I mean, just and just to dive a little deeper and certainly in the defense area that is the area that they over the last few years, we've continued to ramp up our level of investment and Youre seeing the results of that with the increasing growth rates looking ahead to 2006, certainly our maritime growth pillar is an area, where you'll see an expansion in some of our facility space there what we're doing.

Seth Seifman: Great. Great. And then maybe just as a quick follow-up, a little bit more, model oriented. You know, you talked about, growth accelerating through the year, exiting double digit, or approaching, a double digit, so strong exit rate. But I guess the implication is, you know, much softer growth in the beginning of the year. Kind of how should we think about the, the early part of the year and, and which of the segments is seeing that weakness?

Or oriented, you know, you talked about, um, growth accelerating through the year, exiting double digit, um, or approaching, uh, a double digit. Um, so, so strong exit rate. But I, I guess the implication is, um, you know, much softer growth in the beginning of the year. Um, kind of kind of, how should we think about the, the early part of the year and, and which of the segments of seeing that weakness.

The integrated Air Defense. The <unk> Award is a again a reinforcement that we have products that the government wants and how do we ramp up our production capacity.

Yes, that's so. I mean, I think the pattern is right. I mean, lower growth in the first half of the Year acceleration in the back half of the Year, some of the things that we've been talking about over the last several quarters. We haven't seen, you know, any significant money yet. Put towards some of the golden dome initiatives, the FAA modernization, etc. Those are catalysts that can help Propel the second half. We've got some new program wins. That will be starting up.

Personics et cetera, so there's a number of programs there that will support that investment and we're looking forward to realizing the returns on those.

[Company Representative] (Leidos Holdings Inc): Yeah, Seth, so I mean, I think the pattern is right. I mean, lower growth in the first half of the year, acceleration in the back half of the year. Some of the things that we've been talking about over the last several quarters, we haven't seen, you know, any significant money yet put towards some of the Golden Dome initiatives, the FAA modernization, et cetera. Those are catalysts that can help propel the second half. We've got some new program wins that we'll be starting up. Tom talked about a couple of those, so you'll see that pattern increase in the back half of the year. And then, you know, we've got a very robust business development pipeline. Obviously, we're pleased with the 1.3 in Q4, back-to-back quarters of 1.3 book-to-bill and the team.

Chris Cage: Yeah, Seth, so I mean, I think the pattern is right. I mean, lower growth in the first half of the year, acceleration in the back half of the year. Some of the things that we've been talking about over the last several quarters, we haven't seen, you know, any significant money yet put towards some of the Golden Dome initiatives, the FAA modernization, et cetera. Those are catalysts that can help propel the second half. We've got some new program wins that we'll be starting up. Tom talked about a couple of those, so you'll see that pattern increase in the back half of the year. And then, you know, we've got a very robust business development pipeline. Obviously, we're pleased with the 1.3 in Q4, back-to-back quarters of 1.3 book-to-bill and the team.

Seth Seifman: Great. Great. And then maybe just as a quick follow-up, a little bit more model oriented. You know, you talked about growth accelerating through the year, exiting double digit or approaching a double digit, so strong exit rate. But I guess the implication is you know, much softer growth in the beginning of the year. Kind of how should we think about the early part of the year, and which of the segments is seeing that weakness?

Great Great and then maybe just as a quick follow up a little bit more model oriented you talked about growth accelerating through the year exiting in double digit.

Georgia approaching double digit so a strong exit rate, but I guess the implication is.

Much softer growth in the beginning of the year.

How should we think about the early part of the year and which of the segments is seeing that weakness.

Chris Cage: ... Yes, Seth, so, I mean, I think the pattern is right. I mean, lower growth in the first half of the year, acceleration in the back half of the year. Some of the things that we've been talking about over the last several quarters, we haven't seen, you know, any significant money yet put towards some of the Golden Dome initiatives, the FAA modernization, et cetera. Those are catalysts that can help propel the second half. We've got some new program wins that we'll be starting up. Tom talked about a couple of those, so you'll see that pattern increase in the back half of the year. And then, you know, we've got a very robust business development pipeline. Obviously, we're pleased with the 1.3 in Q4, back-to-back quarters of 1.3 book-to-bill, and the team.

Yes, so I mean, I think the pattern is right I mean lower growth in the first half of the year acceleration in the back half of the year. Some of the things that we've been talking about over the last several quarters, we haven't seen any significant money yet put towards some of the golden dome initiatives. The FAA modernization et cetera. Those are catalysts that can help propel.

[Company Representative] (Leidos Holdings Inc): That's despite the fact that we saw a lot of slippage into 2026 from the award pipeline. So you'll see some of those across a number of the business segments, drive growth in the second half of next year.

Chris Cage: That's despite the fact that we saw a lot of slippage into 2026 from the award pipeline. So you'll see some of those across a number of the business segments, drive growth in the second half of next year.

Tom Bell: Yeah, and just to put a little added context on that, Seth, you know, we saw about $7 billion in awards slip from Q4 into this quarter, and our-- we have now $20 billion of pending awards and a $49 billion backlog. So we have high proposal activity. Yes, there is a lag, probably because of that long government shutdown we discussed in the, in the Q4, but we expect those awards to start coming in, and that'll feed growth through the end of the year as those programs get onto execution. Thanks, Seth.

The second half we've got some new program wins that will be starting up on talked about a couple of those so youll see that pattern increase.

Tom talked about a couple of those. So you'll see that pattern increase, uh, in the back half of the year and then, you know, we've got a very robust Business Development pipeline. Obviously, we're pleased with the 1.3 and Q4 back-to-back, quarters of 1.3 book to Bill, and the team, that's despite the fact that we saw a lot of slippage into 2026 from the award pipeline. So, you'll see some of those across a number of the business segments, uh, Drive growth in the second half of next year. Yeah, and just to put a little added context on that. Seth, you know, we saw about 7 billion dollars in rewards slip from Q4 into this quarter and our we have now, 20 billion of pending Awards in a 49 billion dollar of backlog. So we have, uh, hi proposal activity. Uh, yes, there is a lag, probably, because of that long government shutdown. We discussed in the, in the fourth quarter, but we expect those Awards to start coming in and that'll feed growth through the end of the year as those programs.

Programs. Get onto execution. Thanks Seth.

Great. Thank you.

In the back half of the year and then we've got a very robust business development pipeline. Obviously, we're pleased with the one three in Q4 back to back quarters, a one three book to Bill and the team. That's despite the fact that we saw a lot of slippage into 2026 from the <unk> pipeline. So youll see some of those across a number of the business segments drive.

Thank you. And 1 moment for our next question.

Our next question comes from the line of John Goten with City. Your line is open, please go ahead.

Chris Cage: That's despite the fact that we saw a lot of slippage into 2026 from the award pipeline. So you'll see some of those across a number of the business segments drive growth in the second half of next year.

In the second half of next year, and just to put a little added context on that Seth weise.

Tom Bell: Yeah, and just to put a little added context on that, Seth, you know, we saw about $7 billion in awards slip from Q4 into this quarter, and our-- we have now $20 billion of pending awards and a $49 billion of backlog. So we have high proposal activity. Yes, there is a lag, probably because of that long government shutdown we discussed in the Q4. But we expect those awards to start coming in, and that'll feed growth through the end of the year as those programs get onto execution. Thanks, Seth.

Seth Seifman: Great. Thank you.

Operator: Thank you. And one moment for our next question. Our next question comes from the line of John Godden with Citi. Your line is open. Please go ahead.

We saw about $7 billion in awards slipped from Q4 into this quarter.

And are we have now 20 billion of pending awards and a $49 billion backlog.

Jason Gursky: Hey, guys. Thanks for taking my question. I wanted to pick up on those last comments around book-to-bill. When I think of what we've seen from other services players, we've seen a dip and then an expectation of a bounce in book-to-bill. You guys have performed very well, so there's no dip. But despite that, it sounds like you still think that the award activity and the bookings backdrop is gonna accelerate from here, based on what you just said. And I was just hoping you could maybe elaborate on that and shed some additional color on what the shape of that might be through the year?

John Godyn: Hey, guys. Thanks for taking my question. I wanted to pick up on those last comments around book-to-bill. When I think of what we've seen from other services players, we've seen a dip and then an expectation of a bounce in book-to-bill. You guys have performed very well, so there's no dip. But despite that, it sounds like you still think that the award activity and the bookings backdrop is gonna accelerate from here, based on what you just said. And I was just hoping you could maybe elaborate on that and shed some additional color on what the shape of that might be through the year?

We have high pros.

Sure.

Yes, there is a lag probably because of that long government shutdown we've discussed.

Hey guys, thanks for taking my question. Um, I I wanted to pick up on on those last comments when I'm booked to bill. Um, when I think of what we've seen from, um, other services players, we've seen a dip and then an expectation of a bounce in book to bill, you guys have performed very well. So there's no, there's no dip. But despite that it sounds like you still think that the award activity and and the bookings backdrop is going to accelerate um, from from here based on what you just said. And and I was just hoping you can maybe elaborate on that and and shed some additional color on on uh, on on what the shape of that might be through the year.

In the fourth quarter, but we expect those awards to start coming in and that will feed growth through the end of the year.

As programs get onto execution.

Chris Cage: Great. Thank you.

Thank you.

Operator: Thank you, and one moment for our next question. Our next question comes from the line of John Godden with Citi. Your line is open. Please go ahead.

Our next question.

Our next question comes from the line of John <unk> with Citi. Your line is open. Please go ahead.

Jason Gursky: Hey, guys. Thanks for taking my question. I wanted to pick up on those last comments around book-to-bill. When I think of what we've seen from other services players, we've seen a dip and then an expectation of a bounce in book-to-bill. You guys have performed very well, so there's no dip. But despite that, it sounds like you still think that the award activity and the bookings backdrop is gonna accelerate from here, based on what you just said, and I was just hoping you can maybe elaborate on that and shed some additional color on what the shape of that might be through the year.

John Godden: Hey, guys. Thanks for taking my question. I wanted to pick up on those last comments around book-to-bill. When I think of what we've seen from other services players, we've seen a dip and then an expectation of a bounce in book-to-bill. You guys have performed very well, so there's no dip. But despite that, it sounds like you still think that the award activity and the bookings backdrop is gonna accelerate from here, based on what you just said, and I was just hoping you can maybe elaborate on that and shed some additional color on what the shape of that might be through the year.

Hey, guys. Thanks for taking my question.

Tom Bell: Thanks, John. Certainly. Well, first of all, let's put this in context. We've been investing in our growth segment and our growth function for the better part of two and a half, three years now. We recognized that this was an area where we needed to make sure we had the best-in-class capabilities to help our customers understand how Leidos can make their solutions better, faster, and cheaper. And so we've been investing in this function. We've brought in a lot of new leadership. And so the 1.3 book-to-bill ratio in both Q3 and Q4 of last year is no accident. It's no—it's not happenstance. It's the purposeful effect of a purposeful plan to invest in our growth function, and then the manifestation of those efforts coming through the past.

I wanted to pick up on those last comments around book to Bill when I think of what we've seen from.

Other services players we've seen a dip and then an expectation of a bounce in book to Bill you guys have performed very well so theres no theres no debt, but despite that it sounds like you still think that the award activity and the bookings backdrop is going to accelerate.

Im here based on what you just said and I was just hoping you can maybe elaborate on that and shed some additional color on.

On what the shape of that might be through the year.

Tom Bell: Thanks, John. Certainly. Well, first of all, let's put this in context. We've been investing in our growth segment and our growth function for the better part of 2.5 to 3 years now. We recognized that this was an area where we needed to make sure we had the best-in-class capabilities to help our customers understand how Leidos can make their solutions better, faster, and cheaper. And so we've been investing in this function. We've brought in a lot of new leadership, and so the 1.3 book-to-bill ratio in both the Q3 and Q4 of last year is no accident. It's no-- It's not happenstance. It's the purposeful effect of a purposeful plan to invest in our growth function, and then the manifestation of those efforts coming through the pass.

Thanks, John certainly well first of all let's put this in context, we've been investing in our growth.

Segment, and our growth function for the better part of 253 years now we recognize that this was an area where we needed to make sure. We had the best in class capabilities to help our customers understand how <unk> can make their solutions better faster and cheaper and so we've been investing.

Tom Bell: Yes, as I just said to Seth, we still see a robust pipeline, an order backlog, and we expect those orders to continue. We're very happy with both our recompete win rate and our takeaway win rate. And so we feel very good about the capacity we have built in our growth function, and we expect that to continue to pay dividends.

How lytos can make their Solutions better, faster and cheaper. And so, we've been investing in, in this function, we've brought in uh, a lot of new leadership and so the 1.3 book to Bill ratio in both the third and fourth quarters of last year is no accident. It's no, it's not happen stantial. It's the it's the purposeful effect of a purposeful plan to invest in our growth function and then the manifestation of those efforts coming through the past. Yes, as I just said to Seth, uh, we still see a robust pipeline, an order backlog, and we expect uh, those orders to continue. We're very happy with both our recompete win rate and our takeaway win rate. And so we feel very good about, uh, the capacity we have built in our in our growth function and we expect that to continue to pay dividends. Yeah, John, I would only add that. I mean, looking at the trends here, the the next

In this function.

Brought in a lot of new leadership and so the one three book to Bill ratio in both the third and fourth quarters of last year is no accident. It's no it's not happenstance.

[Company Representative] (Leidos Holdings Inc): Yeah, John, I would only add that, I mean, looking at the trends here, the next twelve-month pipeline of submittal activity is the highest point of the year in Q4. So we've seen that crescendo, and looking at the percentage of activity, we expect the bulk of that, three-quarters of that to be geared towards new business and takeaway. So there is, you know, some recompete turf to protect, but that's, again, like we like to see a smaller percentage in next year's bid pipeline, and all of our segments have a robust number of opportunities that they're pursuing.

Chris Cage: Yeah, John, I would only add that, I mean, looking at the trends here, the next twelve-month pipeline of submittal activity is the highest point of the year in Q4. So we've seen that crescendo, and looking at the percentage of activity, we expect the bulk of that, three-quarters of that to be geared towards new business and takeaway. So there is, you know, some recompete turf to protect, but that's, again, like we like to see a smaller percentage in next year's bid pipeline, and all of our segments have a robust number of opportunities that they're pursuing.

It's the purposeful effect of a purposeful plan to invest in our growth function and then the manifestation of those efforts coming through the past year.

Health 12-month pipeline of some middle activity, is the highest point of the year in the fourth quarter. So, we've seen that Crescendo and looking at the percentage of activity. We expect the bulk of that 3, quarters of that, to be geared towards new business and takeaways. So there is, you know, some free compete Turf to protect but that's again like we like to see a smaller percentage in next year's bid Pipeline and all of our segments have a robust number of opportunities that they're pursuing.

Like John, that's fantastic. Thank you.

Tom Bell: Yes, as I just said to Seth, we still see a robust pipeline, an order backlog, and we expect those orders to continue. We're very happy with both our recompete win rate and our takeaway win rate, and so we feel very good about the capacity we have built in our growth function, and we expect that to continue to pay dividends.

Yes, as I, just said to Seth we still see a robust pipeline and order backlog and we expect.

1 moment for our next question.

Our next question comes from the line. I've got some kinda with TD cow in your line is open. Please go ahead.

Those orders to continue we're very happy with both our recompete win rate and our takeaway win rate and so we feel very good about.

Yeah, thanks. Good morning, guys.

Good morning.

The capacity, we have built in our in our growth function and we expect that to continue to pay dividends.

Tom Bell: Thanks, John.

Wanted to just ask you about the uh VA medical exam recompete. What your expectations are for.

Jason Gursky: That's fantastic. Thank you.

John Godyn: That's fantastic. Thank you.

Chris Cage: Yeah, John, I would only add that, I mean, looking at the trends here, the next 12-month pipeline of submittal activity is the highest point of the year in Q4. So we've seen that crescendo, and looking at the percentage of activity, we expect the bulk of that, three-quarters of that, to be geared towards new business and takeaway. So there is, you know, some recompete turf to protect, but that's, again, like we like to see, a smaller percentage in next year's bid pipeline, and all of our segments have a robust number of opportunities that they're pursuing.

Operator: One moment for our next question. Our next question comes from the line of Gautam Khanna with TD Cowen. Your line is open. Please go ahead.

Yes, John I would only add that I mean looking at the trends here.

You know how the terms might change, what you guys are doing to?

The next 12 month pipeline of some middle activity is the highest point of the year in the fourth quarter. So we've seen that crescendo and looking at the percentage of activity. We expect the bulk of that three quarters of that to be geared towards new business and takeaway. So there is some recompete TERP to protect but that's again like we like to see.

maybe you know stay in the profitability of it because typically we compete, you know, got to sharpen the pencil and um

Gautam Khanna: Yeah, thanks. Good morning, guys.

Tom Bell: Good morning.

[Company Representative] (Leidos Holdings Inc): Morning.

Chris Cage: Morning.

And then, if you want, you know, timing uh, any updates on that, thank you.

Gautam Khanna: I wanted to just ask you about the VA medical exam recompete, what your expectations are for, you know, how the terms might change, what you guys are doing to maybe, you know, sustain the profitability of it? Because typically, recompetes, you know, got to sharpen the pencil. And any view on, you know, timing, any updates on that? Thank you.

See a smaller percentage and next year's bid pipeline in all of our segments have a robust number of opportunities that are pursuing.

Tom Bell: Thanks, John.

Thanks, John.

Jason Gursky: That's fantastic. Thank you.

John Godden: That's fantastic. Thank you.

Fantastic. Thank you.

Operator: One moment for our next question. Our next question comes from the line of Gautam Khanna with TD Cowen. Your line is open. Please go ahead.

One moment for our next question.

Tom Bell: ... Sure. Well, first of all, we're very proud of Liz and Larry and the LQTC and health business that we run. We've got a fantastic execution machine there that has helped our customer, decrease backlog of veterans awaiting exams by almost 60%. And so, we're very proud of what we've been able to do to serve that customer and serve this nation. Certainly, as we announced health as being one of our growth pillars, we have no intention to, to cede this market space, despite, as Chris mentioned in his commentary, the entry of the fourth vendor and the possibility of a work share reallocation. That being said, we see volume continuing to go up, and therefore, we think we have everything to compete and win for, to continue to serve our customers best and the, this nation's veterans best.

Our next question comes from the line of Gautam Khanna with TD Cowen. Your line is open. Please go ahead.

Gautam Khanna: Yeah, thanks. Good morning, guys.

Yeah. Thanks, good morning, guys.

Tom Bell: Good morning.

Chris Cage: Morning.

Morning.

Gautam Khanna: I wanted to just ask you about the VA medical exam recompete, what your expectations are for, you know, how the terms might change what you guys are doing to maybe, you know, sustain the profitability of it? Because typically recompetes, you know, you got to sharpen the pencil. And, and any view on, you know, timing, any updates on that? Thank you.

I wanted to just ask you about the VA medical exam Recompete, what your expectations are for.

How the terms might change what you guys are doing to.

Sure. Uh well, first of all, we're very proud of Liz and Larry and the lqt and health business that we run. We've got a fantastic execution machine there. That has helped our customer, uh, decrease backlog of veterans, awaiting exams, by almost 60%. And so, uh, we're very proud of what we've been able to do to serve that customer and serve this nation. Certainly uh, as we announced Health as being 1 of our growth pillars, we have no intention to uh to seed this Market space despite, as Chris mentioned, in his commentary, the entry of the fourth vendor and the possibility of a workshare. Reallocation that being said, we see volume.

Maybe sustain the profitability of it because typically re competes.

Sharpen the pencil and.

And any view on timing.

Thank you.

Tom Bell: Sure. Well, first of all, we're very proud of Liz and Larry and the LTTC and health business that we run. We've got a fantastic execution machine there that has helped our customer decrease backlog of veterans awaiting exams by almost 60%. And so, we're very proud of what we've been able to do to serve that customer and serve this nation. Certainly, as we announced health as being one of our growth pillars, we have no intention to cede this market space, despite, as Chris mentioned in his commentary, the entry of the fourth vendor and the possibility of a workshare reallocation. That being said, we see volume continuing to go up, and therefore, we think we have everything to compete and win for, to continue to serve our customers best and the, this nation's veterans best.

Sure well first of all we're very proud of Liz and Larry in the LTC and health business that we run we've got a fantastic execution machine there that has helped our customer.

Decreased backlog of veterans awaiting exams by almost 60% and so.

We're very proud of what we've been able to do to serve that customer and serve this nation certainly.

Tom Bell: We have, as we've said, 2 prime focuses for how we're going to grow our health business. One is rural health transformation, and the other is behavioral and integrated health exams and services. But on your specific question on the medical disability exams, we do see that in the middle of this year, we expect an RFP and a bid for the next phase of that program. Details at this point are pretty light about exactly what the customer is looking for, but we're actively engaged with them as we speak. And as we've been saying for a number of years now, we continue to invest differentially in our medical disability exam business to make sure that we can make sure veteran exams are done better, are done faster, and are done less expensively for the Veterans Administration.

As we announced health as being one of our growth pillars, we have no intention to.

To see this market space, despite as Chris mentioned in his commentary the entry of the fourth vendor and the possibility of work share reallocation that being said, we see volume continuing to go up and therefore, we think we have everything to compete and win for to continue to serve our customers better.

Continuing to go up and therefore we think we have everything to compete and win for to continue to serve our customers best and this nation's veterans best. We have uh as we've said, 2 Prime focuses for how we're going to grow our health. Business 1 is rural Health transformation and the other is behavioral and Integrated Health exams, and and and services. But on your specific ex uh question on the uh medical uh disability exams. We we do see that in the middle of this year, we expect in RFP and a bid for the the the next phase of that program details at this point are pretty light about exactly what the customer is looking for but we're actively engaged with them as we speak.

And this nation's veterans best.

Tom Bell: We have, as we've said, two prime focuses for how we're gonna grow our health business. One is rural health transformation, and the other is behavioral and integrated health exams and services. But on your specific question on the medical disability exams. We do see that in the middle of this year, we expect an RFP and a bid for the next phase of that program. Details at this point are pretty light about exactly what the customer is looking for, but we're actively engaged with them as we speak. And as we've been saying for a number of years now, we continue to invest differentially in our medical disability exam business to make sure that we can make sure veteran exams are done better, are done faster, and are done less expensively for the Veterans Administration.

As we've said two prime focuses for how we're going to grow our health business. One is rural health transformation and the other is behavioral and integrated health exams.

And services, but on your specific.

Question on the.

And as we've been saying for a number of years, now we continue to invest differentially in our medical disability exam business, to make sure that we can make sure veteran exams are done better are done faster and are done less expensively for the veterans administration. And we expect those will be the 3 things that, uh, uh, the the the veteran benefit agency wants to see. They want to see costs come down. They want to see the number of veterans that get Services, go up, and they want to see the efficiency and effectiveness of those exams.

Medical.

Disability exams.

We do see that in the middle of this year, we expect an RFP in a bid for the next phase of that program details at this point are pretty light about exactly what the customers looking for but we are actively engaged with them as we speak.

Tom Bell: And we expect those will be the three things that the Veteran Benefit Agency wants to see. They want to see costs come down, they want to see the number of veterans that get services go up, and they want to see the efficiency and effectiveness of those exams be less mistake-prone. And so that's everything we're focused on and what we expect to see. We'll update you as the year goes on. As we say, we expect a recompete and a bid somewhere in the summer, and we'll keep you very well informed on that. Chris, anything to add?

As we've been saying for a number of years now we continue to invest differentially in our medical disability exam business to make sure that we can make sure veteran exams are done better are done faster and are done less expensively for the veterans administration.

Ramsby uh, less mistake prone. And so that's everything we're focused on. And what we expect to see will will update you as the year goes on. As we say, we expect uh, a recompete and a bid somewhere in the summer and we'll keep you very well informed on that. Chris, anything to add just 2, quick points goth. I might add number 1. We just recompete the program and look at our performance, right? So we we've proven

Tom Bell: And we expect those will be the three things that the Veteran Benefit Agency wants to see. They want to see costs come down, they want to see the number of veterans that get services go up, and they want to see the efficiency and effectiveness of those exams be less mistake prone. And so that's everything we're focused on and what we expect to see. We'll update you as the year goes on. As we say, we expect a recompete and a bid somewhere in the summer, and we'll keep you very well informed on that. Chris, anything to add?

[Company Representative] (Leidos Holdings Inc): Just two quick points, Gautam, I'd add. Number one, we just recompeted the program and look at our performance, right? So we've proven that every time we can sharpen the pencil, we can deliver for the customer and for Leidos and our shareholders. Number two, if you go back to my prepared remarks, you know, we kind of gave a horizon view and looking at health beyond 2026, robust profitability above 20%. That certainly contemplates how we envision this recompete unfolding over time, right? That this is an area that we can sustain very attractive returns in, and we're excited to demonstrate that.

We expect those will be the three things that.

Chris Cage: Just two quick points, Gautam, I'd add. Number one, we just recompeted the program and look at our performance, right? So we've proven that every time we can sharpen the pencil, we can deliver for the customer and for Leidos and our shareholders. Number two, if you go back to my prepared remarks, you know, we kind of gave a horizon view and looking at health beyond 2026, robust profitability above 20%. That certainly contemplates how we envision this recompete unfolding over time, right? That this is an area that we can sustain very attractive returns in, and we're excited to demonstrate that.

The veteran benefit agency wants to see they want to see costs come down they want to see the number of veterans that guest services go up and they want to see the efficiency and effectiveness of those exams b.

Sharpen the pencil we can deliver for the customer and for Lidos and our shareholders. Number 2. If you go to back to my repair remarks, you know, we kind of gave her Horizon View and looking at Health Beyond 26. Robust profitability above 20%. That certainly contemplates. How we envision this recompete unfolding over time, right? That this is an area that we can sustain uh very attractive returns in and we're excited to demonstrate that.

Thank you, Gotham. Thank you.

Thank you. And 1 moment for our next question.

Less mistake prone and so that's everything we're focused on and what we expect to see.

Our next question comes from the line of Colin Canfield with caner. Your line is open, please go ahead.

Hey, thank you so much for the question.

We will update you as the year goes on as we say we expect a.

Recompete in a bid somewhere in the summer and we will keep you very well informed on that Chris anything to add just two quick points Gotham I'd add number one we just recompete of the program and look at our performance right. So we've proven that every time, we can sharpen the pencil we can deliver for the customer and for <unk> and our shareholders number two if you go back to my role.

Tom Bell: Thank you, Gautam.

[Analyst]: Thank you.

Gautam Khanna: Thank you.

Operator: Thank you, and one moment for our next question. Our next question comes from the line of Colin Canfield with Cantor. Your line is open. Please go ahead.

Um maybe turning to the efforts. 26 growth guidance, as well as margin. Uh, perhaps, if you could talk us through where you are forecasting, the greatest degree of conservatism and what are the key Milestones that you need to see in order to lift both growth and margin guidance?

Colin Canfield: Hey, thank you so much for the question. Maybe turning to the FY 2026 growth guidance as well as margin, perhaps if you could talk us through where you are forecasting the greatest degree of conservatism, and what are the key milestones that you need to see in order to lift both growth and margin guidance? And then essentially, as we think of that bridging into next year, is it fair to assume any outperformance of this year's guidance is a higher basis for next year, or are there any kind of one-time things in nature that might pull in this year versus next year? Thank you.

And then essentially as we think of that bridging into next year, is it fair to assume any outperformance of this year's guidance.

Fair remarks, we kind of gave her horizon view in looking at health beyond 'twenty six robust profitability above 20%. That's certainly contemplates how we envision this recompete unfolding overtime right. This is an area that we can sustain very attractive returns in and we're excited to demonstrate that.

Is a higher basis for next year, or are there any kind of 1-time things in nature that might pull in this year versus next year? Thank you.

Yeah. Uh hey Colin. This is Chris. Um,

Tom Bell: Mm-hmm. Thank you, Gautam.

I think you've got competition. Thank you.

Chris Cage: Thank you.

Operator: Thank you, and one moment for our next question. Our next question comes from the line of Colin Canfield with Cantor. Your line is open. Please go ahead.

Thank you and one moment for our next question.

Our next question comes from the line of Colin Canfield with Cantor. Your line is open. Please go ahead.

[Company Representative] (Leidos Holdings Inc): Yeah. Hey, Colin, this is Chris. You know, the conservatism, I like the way you framed that. I mean, there's certainly a lot of irons in the fire and a lot of make market opportunities that we're chasing. Clearly, defense has demonstrated a robust track record. That's probably the area that, you know, if some decisions get made, if a beautiful bill funding rolls out, Golden Dome activities accelerate, especially in maritime, you could see that growth trend pick up more quickly. So there are some opportunities there that we're just monitoring. And then the FAA one, as Tom mentioned, you know, the teams are ready to execute. We've put in very compelling offers to the customer. We've, you know, built demonstration-ready capabilities. We're ready to go. So those things could be pulled forward, and we could see some uplift.

Chris Cage: Yeah. Hey, Colin, this is Chris. You know, the conservatism, I like the way you framed that. I mean, there's certainly a lot of irons in the fire and a lot of make market opportunities that we're chasing. Clearly, defense has demonstrated a robust track record. That's probably the area that, you know, if some decisions get made, if a beautiful bill funding rolls out, Golden Dome activities accelerate, especially in maritime, you could see that growth trend pick up more quickly. So there are some opportunities there that we're just monitoring. And then the FAA one, as Tom mentioned, you know, the teams are ready to execute. We've put in very compelling offers to the customer. We've, you know, built demonstration-ready capabilities. We're ready to go. So those things could be pulled forward, and we could see some uplift.

Okay. Thank you so much for the question.

Turning to the FY 'twenty growth guidance as well as margin.

Perhaps if you could talk us through where you are forecasting the greatest degree of conservatism and what are the key milestones that you need to see in order to lift both growth and margin guidance and.

And then essentially as we think of that bridging into next year is it fair to assume any outperformance of this year's guidance.

As a higher basis for next year or are there any kind of one time things in nature that might pull it in this year versus next year. Thank you.

Chris Cage: Yeah, hey, Colin, this is Chris. You know, the conservatism, I like the way you framed that. I mean, there's certainly a lot of irons in the fire and a lot of make-market opportunities that we're chasing. Clearly, defense has demonstrated a robust track record. That's probably the area that, you know, if some decisions get made, if a beautiful bill funding rolls out, Golden Dome activities accelerate, especially in maritime, you could see that growth trend pick up more quickly. So there are some opportunities there that we're just monitoring. And then the FAA one, as Tom mentioned, you know, the teams are ready to execute. We've put in very compelling offers to the customer. We've, you know, built demonstration-ready capabilities. We're ready to go. So those things could be pulled forward, and we could see some uplift.

Yeah, Hey, Collin this is Chris.

You know the conservatism uh, like the way you frame that, I mean there's certainly a lot of irons in the fire and a lot of make Market opportunities that we're chasing clearly defenses demonstrate a robust track record. That's probably the area that you know if some decisions get made if uh a beautiful Bill funding rolls out golden dome activities uh accelerate um especially in Maritime, you can see that growth Trend pick up more quickly. Uh, so there's some opportunities there that were just monitoring and then the FAA 1 is Tom mentioned, you know, the teams are ready to execute, uh, we put in very compelling, uh, offers to the customer we you know, built demonstration, ready capabilities, we're ready to go, so those things could be pulled forward and we could see some uplift. Um, on the margin front, I think, you know the commentary we just had on on health. Certainly is the area that uh we you know, we built into what we believe. The, the business will be running at from A reduced volume and accommodated that if if that plays out a little differently,

The conservatism like the way you frame that I mean, there is certainly a lot of irons in the fire and a lot of make market opportunities that we're chasing clearly defense has demonstrated a robust track record and that's probably the area that.

there could be some upside there.

[Company Representative] (Leidos Holdings Inc): On the margin front, I think, you know, the commentary we just had on health certainly is the area that, we, you know, we built into what we believe that the business will be running at from a reduced volume and accommodated that. If that plays out a little differently, there could be some upside there. So, you know, we think we factored all that in. As it relates to one-timers, none of those are contemplated in this guide that we've rolled out. So, you know, as we deliver over the course of the year, I do believe that points the direction of how the momentum will carry into 2027 and beyond for NorthStar 2030.

Chris Cage: On the margin front, I think, you know, the commentary we just had on health certainly is the area that, we, you know, we built into what we believe that the business will be running at from a reduced volume and accommodated that. If that plays out a little differently, there could be some upside there. So, you know, we think we factored all that in. As it relates to one-timers, none of those are contemplated in this guide that we've rolled out. So, you know, as we deliver over the course of the year, I do believe that points the direction of how the momentum will carry into 2027 and beyond for NorthStar 2030.

Some decisions get made.

Beautiful Bill funding rolls out Golden dome activities accelerate.

So, you know, we think we've factored all that in, as it relates to 1 timers, none of those are contemplated in this guide that we've rolled out. So, you know, as we deliver over the course of the year, I do believe that points the direction of how the momentum will carry into 27 and beyond for Northstar 2030.

That's great. Chris. Thank you.

Especially in maritime you can see that growth trend pick up more quickly.

Thanks. Thank you. And 1 moment for our next question.

So there are some opportunities there that we're just monitoring and then the FAA one as Tom mentioned you know the teams are ready to execute.

Our next question is going to come from the line of Toby Sr with truist. Your line is open, please go ahead.

We've put in very compelling offers to the customer.

Demonstration ready capabilities, we're ready to go so those things could be pulled forward and we can see some uplift.

Chris Cage: On the margin front, I think, you know, the commentary we just had on, on health certainly is the area that, we, you know, we built into what we believe that the business will be running at from a reduced volume and accommodated that. If, if that plays out a little differently, there could be some upside there. So, you know, we think we factored all that in. As it relates to one-timers, none of those are contemplated in this guide that we've rolled out. So, you know, as we deliver over the course of the year, I do believe that points the direction of how the momentum will carry into 2027 and beyond for NorthStar 2030.

Colin Canfield: That's great, Chris. Thank you.

On the margin front I think the commentary we just had an angel certainly is the area that.

[Company Representative] (Leidos Holdings Inc): Thanks.

Chris Cage: Thanks.

Operator: Thank you, and one moment for our next question. Our next question is going to come from the line of Toby Sommer with Truist. Your line is open. Please go ahead.

We built into what we believe the business will be running at from a reduced volume and accommodated that if if that plays out a little differently there could be some upside there.

Thank you in, in the, uh, sort of product and defense Tech area. I was wondering if you could give us an update on, uh, the areas that you think have hit their stride with sort of programs of record and in areas that um, are are still developing that may uh,

Tom Bell: Thank you. In the sort of product and defense tech area, I was wondering if you could give us an update on the areas that you think have hit their stride with sort of programs of record and areas that are still developing that may demonstrate some progress here in 2026 in that direction. Thank you. Yeah, sure. Thank you, Toby. Let's see. Well, first, let's start with IFPC. You know, we were awarded a $4.1 billion IDIQ to ramp production, and that is going well.

Tobey Sommer: Thank you. In the sort of product and defense tech area, I was wondering if you could give us an update on the areas that you think have hit their stride with sort of programs of record and areas that are still developing that may demonstrate some progress here in 2026 in that direction. Thank you.

That may demonstrate some progress here in 26 in that direction. Thank you.

So we think we've factored all that in as it relates to one timers.

None of those are contemplated in this guide that we've rolled out so as we deliver over the course of the year I do believe that points to the direction of how the momentum will carry into 2007 and beyond for North Star 2030.

Yeah.

Colin Canfield: That's great, Chris. Thank you.

That's great Chris Thank you.

Chris Cage: Thanks.

Thanks.

Operator: Thank you, and one moment for our next question. Our next question is going to come from the line of Toby Sommer with Truist. Your line is open. Please go ahead.

Tom Bell: Yeah, sure. Thank you, Toby. Let's see. Well, first, let's start with IFPC. You know, we were awarded a $4.1 billion IDIQ to ramp production, and that is going well.

One moment for our next question.

Our next question is going to come from the line of Tobey Sommer with Suntrust. Your line is open. Please go ahead.

Yeah.

Thank you.

<unk>.

Sure product in Defense Tech area I was wondering if you could.

Tom Bell: We have a target procurement of some 317 systems to be delivered by 2030, and we think that, with the readying of the Defense Industrial Base, FMS possibilities, and of course, Golden Dome, that is a very good bet for us to continue to grow. So, we're very bullish on IFPC. You see the customer investing in a second interceptor. That solidifies their seriousness of the system as a whole, and as the lead systems integrator for that, we sit in service to our customer to make sure that that system is all that they want it to be. Hypersonics was mentioned earlier. Obviously, the Department of Defense is fast-tracking some 6 tech priorities to include scaled hypersonics, so that shows you that they're serious about it.

Give us an update on.

The areas that you think have hit their stride with sort of programs of record and.

Yeah sure. Thank you, Toby. Um, let's see. Well first let's start with if pick uh, you know we were awarded a 4.1 billion dollar idiq to ramp production and that is going, well, we have a Target procurement of some 317 systems to be delivered by 2030 and we think that, uh, with uh, the readying of the defense industrial base FMS possibilities, and of course golden dome. Uh, that is a, uh, a very good bet for us, to continue to grow. So, uh, we're we're very bullish on if pick. You see the customer investing in a second Interceptor, that that solidifies their seriousness of the system as a whole, and as the lead systems integrator,

In areas that.

Are still developing that may.

That may demonstrate some progress here in 2006 in that direction. Thank you.

Tom Bell: Yeah, sure. Thank you, Toby. Let's see. Well, first, let's start with IFPC. You know, we were awarded a $4.1 billion IDIQ to ramp production, and that is going well. We have a target procurement of some 317 systems to be delivered by 2030, and we think that, with the readying of the Defense Industrial Base, FMS possibilities, and of course, Golden Dome, that is a very good bet for us to continue to grow. So, we're very bullish on IFPC. You see the customer investing in a second interceptor.

Sure. Thank you Tobey let's.

Let's see well first let's start with epic.

We were awarded a $4 $1 billion IDI Q to ramp production and that is going well, we have a target procurement of some 317 systems to be delivered by 2030, and we think that with the readying of the defense industrial base.

M S possibilities and of course Golden Dome.

That is a very good bet for us to continue to grow. So we're very bullish on if you see the customer investing in a second interceptor.

Tom Bell: Our recent awards of SLCCM-N and JAHTO OTAs, those mirror the Army's success of the Dark Eagle program, and so we're very happy with where that program is going from here. I mentioned in my prepared remarks the ABADs award, although we can't say much more about that. Again, homeland security and base defense are where those programs excel, and both of those things are very high priorities for the Department of War. Wide field of view in the space area. You know, we are very bullish on our opportunities to serve the Space Force's needs there. They have a budget climbing toward $40 billion, and we are a vital partner for the technical contributions across the Space Development Agency and all their tranches to date.

Tom Bell: That solidifies their seriousness of the system as a whole, and as the lead systems integrator for that, we sit in service to our customer to make sure that that system is all that they want it to be. Hypersonics was mentioned earlier. Obviously, the Department of Defense is fast-tracking some six tech priorities to include scaled hypersonics, so that shows you that they're serious about it. And our recent awards of SLICM-N and JAHTO OTAs. Those mirror the Army's success of the Dark Eagle program, and so we're very happy with where that program is going from here. I mentioned in my prepared remarks the ABADS award, although we can't say much more about that.

Solidifies their seriousness of the system as a whole and as the lead systems integrator for that we sit in and service to our customer to make sure that that system is all that they wanted to be.

Defense are where those programs Excel and both of those things are very high priorities for the Department of War.

uh,

Hypersonic was mentioned earlier, obviously, we the department of war is fast tracking some six tech priorities to include scaled hypersonic. So that shows you that they're serious about it and our recent awards of Silicon and Jack.

Had two otas those those mirror the army's success of the Darcie Eagle program. So we're very happy with where that program is going from here.

Mentioned in my prepared remarks, the beds award, although we can't say much more about that again homeland security and base defense or were those programs excel and both of those things are very high priorities for the department of war.

Tom Bell: Again, homeland security and base defense are where those programs excel, and both of those things are very high priorities for the Department of Defense. Wide Field of View in the space area. You know, we are very bullish on our opportunities to serve the Space Force's needs there. They have a budget climbing toward $40 billion, and we are a vital partner for the technical contributions across the Space Development Agency and all their tranches to date. So we've been accelerating internal investment there. The SDA's Tranche Zero mission has been successful, and we are a key part of that. We've delivered 2 Tranche One payloads to Northrop, with the remaining ones coming this year.

Tom Bell: So we've been accelerating internal investment there. The SDA's Tranche Zero mission is been successful, and we are a key part of that. We've delivered 2 Tranche One payloads to Northrop, with the remaining ones coming this year. Following a successful critical design review, which we published in the press, we remain on track to deliver 18 satellites for the SDA for Tranche Two by the end of the year. And we're positioning for growth for Tranche Three and for Tranche Four to make sure that our payloads that are serving this nation now in space continue to do so into the future. What I'm not talking about is the 2 IDIQs I mentioned, the Shield IDIQ and the Microelectronics IDIQ. Again, these are areas where we've been investing in.

wide field of view in the space area. You know, we we are, uh, we are very bullish on our opportunities to serve, uh, the space forces, uh, needs their. Uh, they are they have a budget climbing toward forty billion dollars and uh, we are a vital partner for the technical, uh, contributions across the space development agency and all their tanches to date. So, we've been accelerating internal investment. There, the sda's, tranche, zero mission is been successful. Uh, and we are a key part of that leave delivered 2lo to Northrup with the remaining ones coming this year. Uh, following a successful critical design review, which we published in the Press. Uh we remain on track to deliver, 18 satellites for the SDA for tranche 2 by the end of the year and we're positioning for growth with uh uh for tranche 3. And for trunk.

Uh huh.

Wide field of view in the space area.

We are we are very bullish on our opportunities to serve the space forces needs. There are they are they have a budget climbing towards $40 billion and.

We are a vital partner for the technical.

Contributions across the space development agency and all their tranches to date. So we've been accelerating internal investments there. The SDA is tranche zero emission has been successful.

And we are a key part of that we've delivered two tranche one payloads to Northrop with the remaining ones coming this year.

Tom Bell: Following a successful critical design review, which we published in the press, we remain on track to deliver 18 satellites for the SDA for Tranche Two by the end of the year. And we're positioning for growth with, for Tranche Three and for Tranche Four, to make sure that our payloads that are serving this nation now in space continue to do so into the future. What I'm not talking about is the two IDIQs I mentioned, the Shield IDIQ and the Microelectronics IDIQ. Again, these are areas where we've been investing in. Us being in those IDIQs gives us the opportunity to help the customer serve the nation through task orders therein, and we are very bullish about that.

Tom Bell: Our being in those IDIQs gives us the opportunity to help the customer serve the nation through task orders therein, and we are very bullish about that. So, we're very excited about several of the framework agreements that we have in negotiation and conversation with the Department of Defense, to, as I said earlier, continue to build programs of record for our defense business. So we're very bullish on being a defense tech company, and we're very excited about the opportunities for us to continue to grow that business under Cindy's leadership.

Following a successful critical design review, which we published in the press.

We remain on track to deliver 18 satellites for the SDA for tranche two by the end of the year and we're positioning for growth with.

Branch 4 to make sure that uh, our payloads that are serving this nation. Now in space, continue to do so into the future. What I'm not talking about is that 2 IDI, I mentioned the shield idiq and the micro Electronics, idiq again, these are areas where we've been investing in us being in those idiq. Gives us the opportunity to uh, help the customer, serve the nation through task orders therein. And we, we are very bullish about that. And so, um, we're we're very excited about several of the framework agreements that we have uh, in negotiation and conversation with the Department of War. Uh to as I said earlier uh continue to build programs of records for our defense business. So we're very bullish on being a defense tech company and we're very excited about the opportunities for us to continue to grow that business under Cindy's leadership.

For tranche, three and four tranche four to make sure that.

Our payloads that are serving this nation now in space continue to do so into the future.

I'm not talking about is the two IDI cues I mentioned the shield idea IQ in the microelectronics idea IQ again these are areas, where we've been investing in us being in those IDI cues gives us the opportunity to help the customers serve the nation through task orders there in and.

Yeah. Toby I'd only add you know Tom had a robust list there and there's others. Maritime certainly is 1 of those areas with our seed Art Product ADC, Mark 5 or talking about with medium, unmanned surface vessels. Those are the ones that, you know, have more Runway and variance for the UK and Australia customer as well. Um, so excited about the prospects in our Maritime part of the portfolio. There is 2

[Company Representative] (Leidos Holdings Inc): Yeah, Toby, I'd only add, you know, Tom had a robust list there, and there's others. Maritime certainly is one of those areas with our CDAR product, ADC Mark V, what we're talking about with medium unmanned surface vessels. Those are the ones that, you know, have more runway and variance for the UK and Australia customers as well. So excited about the prospects in our maritime part of the portfolio there, too.

Chris Cage: Yeah, Toby, I'd only add, you know, Tom had a robust list there, and there's others. Maritime certainly is one of those areas with our CDAR product, ADC Mark V, what we're talking about with medium unmanned surface vessels. Those are the ones that, you know, have more runway and variance for the UK and Australia customers as well. So excited about the prospects in our maritime part of the portfolio there, too.

Thank you very much.

Thank you. Thank you. And 1 moment for our next question.

We are very bullish about that and so.

Our next question will come from the line of can Herbert with.

Tom Bell: And so, we're very excited about several of the framework agreements that we have in negotiation and conversation with the Department of Defense, to, as I said earlier, continue to build programs of record for our defense business. So we're very bullish on being a defense tech company, and we're very excited about the opportunities for us to continue to grow that business under Cindy's leadership.

We are very excited about several of the framework agreements that we have.

CB or RBC Capital markets. Your line is open. Please go ahead.

In negotiation in conversation with the Department of War.

Yes, thank you. Good morning. Uh, Tom and Chris um morning.

Two as I said earlier.

Tom Bell: Mm-hmm.

Continue to build programs of records for our defense business. So we're very bullish on being a defense Tech company and we're very excited about the opportunities for us to continue to grow that business under <unk> leadership.

[Analyst]: Thank you very much.

Tobey Sommer: Thank you very much.

yeah, maybe if you could address Capital allocation, I think you said you'll be

Tom Bell: Thank you.

Operator: Thank you, and one moment for our next question. Our next question will come from the line of Ken Herbert with RBC Capital Markets. Your line is open. Please go ahead.

Chris Cage: Yeah, Toby, I'd only add, you know, Tom had a robust list there, and there's others. Maritime certainly is one of those areas with our SeaDar product, ADC Mark Five, what we're talking about with medium unmanned surface vessels. Those are the ones that, you know, have more runway and variants for the UK and Australia customers as well. So excited about the prospects in our maritime part of the portfolio there, too. Mm-hmm.

Yes, Tobey I would only add Tom had a robust list there and theres others Maritime certainly is one of those areas with our SEDAR product ADC Mark five what we're talking about with medium unmanned surface vessels. Those are the ones that have more runway and variance for the U K and Australia customer as well.

gross. Uh gross lover about 2.6 times on a performance basis after entrust. How are you thinking about incremental m&a opportunities this year, where your priorities and what is the guidance imply for BuyBacks this year?

[Analyst]: Yes, thank you. Good morning, Tom and Chris.

Ken Herbert: Yes, thank you. Good morning, Tom and Chris.

Tom Bell: Morning, Ken.

[Analyst]: Maybe... Yeah, maybe if you could address capital allocation. I think you said you'll be gross levered about 2.6 times on a pro forma basis after ENTRUST. How are you thinking about incremental M&A opportunities this year? Where are your priorities, and what does the guidance imply for buybacks this year?

Ken Herbert: Maybe... Yeah, maybe if you could address capital allocation. I think you said you'll be gross levered about 2.6 times on a pro forma basis after ENTRUST. How are you thinking about incremental M&A opportunities this year? Where are your priorities, and what does the guidance imply for buybacks this year?

So excited about the prospects in our maritime part of the portfolio there too.

Colin Canfield: Thank you very much.

Tobey Sommer: Thank you very much.

Thank you very much.

Tom Bell: Thank you.

Thank you. Thank you and one moment for our next question.

Chris Cage: Thank you.

Operator: Thank you, and one moment for our next question. Our next question will come from the line of Ken Herbert with RBC Capital Markets. Your line is open. Please go ahead.

Tom Bell: Yeah, thanks. So first of all, again, this is a long arc that I think if you go back to the earnings calls past, I've transmitted pretty clearly that while we were searching for our growth strategy, we would have a capital deployment strategy that was very shareholder-friendly. We still have a rigorous return on investment capital analysis for any investment and any outflow of Leidos dollars, and we will continue to do that. But now with our NorthStar 2030 strategy in hand and we've been firmly in strategy execution mode, meeting the moment also of this administration, we're very well poised to deliver on and invest in those growth pillars that we've discussed. So we've increased investment over the last three years. We will continue to increase investment.

Our next question will come from the line of Ken Herbert with <unk>.

CB <unk> RBC capital markets. Your line is open. Please go ahead.

Ken Herbert: Yes, thank you. Good morning, Tom and Chris.

Yes. Thank you good morning, Tom and Chris Good morning.

Tom Bell: Morning, Ken.

Ken Herbert: Maybe, yeah, maybe if you could address capital allocation. I think you said you'll be grossly levered about 2.6 times on a pro forma basis after Entrust. How are you thinking about incremental M&A opportunities this year? Where are your priorities, and what does the guidance imply for buybacks this year?

Yes, maybe if you could address capital allocation I think you said you'll be.

Yeah, thanks. Um, so first of all, again, this is a long Arc uh, that I think if you go back to the earnings calls passed, I've uh, transmitted pretty clearly that while we, uh, were searching for our growth strategy, we would have a capital deployment strategy, that was very shareholder friendly. We still have a rigorous return on investment Capital analysis for any investment, and any outflow of Lidos dollars. And we will continue to do that. But now with our, uh, Northstar 2030 strategy in hand, and we've been firmly in strategy, execution mode, uh, meeting the moment also of this Administration. We are

<unk> gross of over about two six times on a pro forma basis. After entrust how are you thinking about incremental M&A opportunities. This year, where are your priorities and what does the guidance imply for buybacks this year.

Tom Bell: Yeah, thanks. So first of all, again, this is a long arc that I think if you go back to the earnings calls past, I've transmitted pretty clearly, that while we were searching for our growth strategy, we would have a capital deployment strategy that was very shareholder friendly. We still have a rigorous return on investment capital analysis for any investment and any outflow of Leidos dollars, and we will continue to do that. But now with our NorthStar 2030 strategy in hand, and we've been firmly in strategy execution mode, meeting the moment also of this administration, we're very well poised to deliver on and invest in those growth pillars that we've discussed. So we've increased investment over the last three years. We will continue to increase investment.

Yeah. Thanks, So first of all again.

This is a long arc.

I think if you go back to the earnings calls past.

Transmitted pretty clearly.

While we.

We're searching for our growth strategy, we would have our capital deployment strategy that was very shareholder friendly we still have a rigorous return on investment capital analysis for any investment in any outflow of light us dollars and we will continue to do that but now with our north star.

Very well poised to deliver on and invest in those growth pillars that we've discussed. So, we've increased Investments over the last 3 years, we will continue to increase investment and yes in organic and organic investments will be the Lion's Share of how we deploy our capital in the near term. That being said, we will continue to our our dividend program and we will look opportunistically for other shareholder friendly. Deployments of capital as the, uh, as the

Tom Bell: And yes, inorganic and organic investments will be the lion's share of how we deploy our capital in the near term. That being said, we will continue to our dividend program, and we will look opportunistically for other shareholder-friendly deployments of capital as the need arises.

Uh, need arises Chris. Yeah I mean can to get to your specific question on the repos, we haven't baked any into the guide that we gave you for this year. I mean, you can see that within trust coming online. There's a lot of capital going to that but

<unk> 2030 strategy in hand, and we've been firmly in strategy execution mode.

We have more capacity and the priorities are what Tom laid out uh and we'll monitor things as the year unfolds.

Thank you.

Meeting the moment also of this administration, we are very well poised to deliver on and invest in those growth pillars that we've discussed so we've increased.

Thank you. And 1 moment for our next question.

[Company Representative] (Leidos Holdings Inc): Chris? Yeah, I mean, Ken, to get to your specific question on the repos, we haven't baked any into the guide that we gave you for this year. I mean, you can see that, with ENTRUST coming online, there's a lot of capital going to that, but, we have more capacity and the priorities are what Tom laid out, and we'll monitor things as the year unfolds.

Chris Cage: Chris? Yeah, I mean, Ken, to get to your specific question on the repos, we haven't baked any into the guide that we gave you for this year. I mean, you can see that, with ENTRUST coming online, there's a lot of capital going to that, but, we have more capacity and the priorities are what Tom laid out, and we'll monitor things as the year unfolds.

Our next question comes from the line of Scott, Mika, Swiss Milius research. Your line is open, please go ahead.

Increased investments over the last three years, we will continue to increase investment and yes, inorganic and organic investments will be the lion's share of how we deploy our capital in the near term that being said, we will continue our dividend program and we will look opportunistically for other sure.

Morning, Tom and Chris. Um,

Jason Gursky: Thank you.

Ken Herbert: Thank you.

Tom Bell: Thank you.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Scott Mika with Milleas Research. Your line is open. Please go ahead.

Holder friendly deployments of capital as the as the.

Scott Mikus: Morning, Tom and Chris.

Need arises Chris Yes, I mean, Ken to get to your specific question on the repos, we haven't baked any into the guide that we gave you for this year I mean, you can see that with entrust coming online. There is a lot of capital to go into that but.

Tom Bell: Morning, Scott.

Tom we've seen um a lot of software stocks come under pressure here to date because of concerns that AI could drive down the cost for companies to develop software internally. We also hear from defense companies that AI will accelerate the shift towards outcome based Contracting. But are you concerned that AI could cause a race to the bottom on price, particularly for digital modernization programs?

Chris Cage: Yeah, I mean, Ken, to get to your specific question on the repos, we haven't baked any into the guide that we gave you for this year. I mean, you can see that, with EnTrust coming online, there's a lot of capital going to that, but, we have more capacity and the priorities are what Tom laid out, and we'll monitor things as the year unfolds.

Scott Mikus: Tom, we've seen a lot of software stocks come under pressure year to date because of concerns that AI could drive down the costs for companies to develop software internally. We also hear from defense companies that AI will accelerate the shift towards outcome-based contracting. But are you concerned that AI could cause a race to the bottom on price, particularly for digital modernization programs?

We have more capacity and the priorities are what Tom laid out and we will monitor things as the year unfolds.

Ken Herbert: Thank you.

Thank you.

Tom Bell: Thank you.

Thank you.

Operator: Thank you, and one moment for our next question. Our next question comes from the line of Scott Mikus with Melius Research. Your line is open. Please go ahead.

Thank you and one moment for our next question.

Okay.

Tom Bell: Thanks. Yes, Scott, I see and hear and certainly see the stock market effect of the fear of AI overtaking the world, and understand why some people might say that. But for us, the proliferation of AI isn't a threat; it's a force multiplier for everything we've always wanted to do. So we continue to lean into all commercial technologies. It is part of the business model that has made Leidos successful, and we don't see AI as being any different. We want to look at it, understand it, exploit it, and be able to serve our customers with it, no matter which model of AI they want to, they want to embrace. That is why Will Johnson and our DigMod business embrace AI internally.

Our next question comes from the line of Scott <unk> with Melius Research. Your line is open. Please go ahead.

Scott Mikus: Morning, Tom and Chris.

Tom and Chris.

Tom Bell: Morning, Scott.

Hey, Scott.

Scott Mikus: Tom, we've seen a lot of software stocks come under pressure year to date because of concerns that AI could drive down the cost for companies to develop software internally. We also hear from defense companies that AI will accelerate the shift towards outcome-based contracting. But are you concerned that AI could cause a race to the bottom on price, particularly for digital modernization programs?

Tom we've seen.

A lot of software stocks come under pressure here to date because of concerns that AI can drive down the costs for companies to develop software internally. We also hear from defense companies that AI.

Thanks, uh, yes, Scott. I I I see and hear, and certainly, uh, see the stock market effect of the fear of AI overtaking? The world and uh, understand why some people might say that but for us the proliferation of AI isn't a threat, it's a force multiplier for everything. We've always wanted to do so we continue to lean into all commercial Technologies. It is part of the business model that has made Lidos successful and we don't see AI as being any different. We want to look at it, understand it, exploit it and be able to serve our customers with it. No matter which model of AI they want to uh, they want to embrace. That is why will Johnson

Accelerate the shift towards outcome based contracting but are you concerned that AI could cause a race to the bottom on price, particularly for digital modernization programs.

Tom Bell: Thanks. Yes, Scott, I see the stock market effect of the fear of AI overtaking the world, and understand why some people might say that. But for us, the proliferation of AI isn't a threat; it's a force multiplier for everything we've always wanted to do. So we continue to lean into all commercial technologies. It is part of the business model that has made Leidos successful, and we don't see AI as being any different. We want to look at it, understand it, exploit it, and be able to serve our customers with it, no matter which model of AI they want to embrace. That is why Will Johnson and our DigMod business embrace AI internally.

Thanks Scott.

Scott.

I see and hear and certainly see the stock market effect of the fear of AI overtaking the world.

And understand why some people might say that but for us the proliferation of AI isn't a threat it's <unk>.

<unk> multiplier for everything we've always wanted to do so we continue to lean into all commercial technologies. It is part of the business model that has made <unk> successful and we don't see AI as being any different we want to look at it understand it exploited and be able to serve.

Tom Bell: We're very keen to make sure that we're the beta tester of how AI makes organizations, faster and more efficient. And we expect that, beta testing AI internally to Leidos will not only deliver bottom-line results for us, but also help us prototype and then deliver top-line benefits for our customers as they seek to exploit AI to make their operations more efficient. So ultimately, we see AI as an opportunity to help our customers shift budgets away from maintenance and into high-value mission outcomes, which is, of course, the business we're in, making their, their outcomes smarter and more efficient. I hope that helps, Scott.

Our customers with it no matter, which model of AI. They want to they want to embrace that is why we will Johnson and.

And uh, uh uh our our Digimon business Embrace, uh, AI internally. We're very keen to make sure that we are the beta tester of how AI makes organizations, uh, faster and more efficient. And we expect that, uh, beta testing AI internally to lytos, will not only deliver bottom line results for us, but also help us prototype and then deliver Topline benefits for our customers as they seek to exploit AI to make their operations more efficient. So, ultimately, uh, we see AI as an opportunity to help our customers shift budgets away from maintenance and into high value Mission outcomes which is of course the business we're in making their their outcomes smarter and more efficient. I hope that helps Scott

Yes.

Our <unk>.

<unk> business embrace.

AI internally, we're very keen to make sure that we are the beta tester of how AI makes organizations.

Yes, it does. And then a quick question, you noted. The backlog figures did not include anything from the golden dome idiq or the micro Electronics idiq, which is the guide assume that you will receive task orders this year that will uh, convert to revenue, or is that purely upside to the guide?

Faster and more efficient.

And we expect that beta testing AI internally to light of us will not only deliver bottom line results for us, but also help US prototype and then deliver topline benefits for our customers as they seek to exploit AI to make their operations more efficient so ultimately.

Scott Mikus: Yeah, it does. And then a quick question. You noted the backlog figures do not include anything from the Golden Dome IDIQ or the microelectronics IDIQ, but does the guide assume that you will receive task orders this year that will convert to revenue, or is that purely upside to the guide?

<unk>.

Tom Bell: Yeah, we don't ever include IDIQs. We only include the task orders when they come in. Of course, our business development and our sectors all want to assume that they get task orders that deliver revenue and profit in the year, and that's what they hunt for every year.

We see AI as an opportunity to help our customers shift budgets away from maintenance and into high value mission outcomes, which is of course the business, we're in making their their outcomes smarter and more efficient.

I hope that helps Scott.

Scott Mikus: Yeah, it does. And then a quick question. You noted the backlog figures do not include anything from the Golden Dome IDIQ or the microelectronics IDIQ, but does the guide assume that you will receive task orders this year that would convert to revenue, or is that purely upside to the guide?

Yeah, we we we don't ever include idiq. We only include the task orders when they come in, of course, our business development and our sectors, all want to assume that they get, task orders, that deliver revenue and profit in the year. And that's, that's what they hunt for every year and Scott just, I mean, as with any annual guide that we put out there, always is some element of new business that has to be won throughout the year, whether that comes from golden dome or comes from the robust number of other submittals that we have in the pipeline, you know, uh, it can be any number of those sources, but yeah, if golden dome ramps up in any material way? We see upside from that golden dome FAA.

Yes. It does and then a quick question you noted the backlog figures do not include anything from the Goldman <unk> IQ or the microelectronics IQ, but does the guide assume that you will receive task orders this year.

[Company Representative] (Leidos Holdings Inc): And Scott, just to, I mean, as with any annual guide that we put out, there always is some element of new business that has to be won throughout the year, whether that comes from Golden Dome or comes from the robust number of other submittals that we have in the pipeline, you know, it can be any number of those sources. But yeah, if Golden Dome ramps up in any material way, we see upside from that.

Chris Cage: And Scott, just to, I mean, as with any annual guide that we put out, there always is some element of new business that has to be won throughout the year, whether that comes from Golden Dome or comes from the robust number of other submittals that we have in the pipeline, you know, it can be any number of those sources. But yeah, if Golden Dome ramps up in any material way, we see upside from that.

The micro Electronics, all of them there. There's a ton of opportunities out there where we're poised to exploit over the coming months.

Thank you.

Convert to revenue or is that purely upside to the guide.

Thank you. 1 moment for our next question.

Yes, we don't ever include IDI cues. We only include the task orders when they come in of course, our business development in our sectors all want to assume that they get task orders that deliver revenue and profit in the year and Thats Thats, what they hunt for every year.

Our next question will be from the line of Jonathan Sigmund with stifel. Your line is open. Please go ahead.

Tom Bell: Golden Dome, FAA, the microelectronics, all of them. There's a ton of opportunities out there where we're poised to exploit over the coming months.

Good morning, Tom Chris, and Stuart. Thanks for taking my question.

Good morning.

Scott Mikus: Thank you.

Operator: Thank you. One moment for our next question. Our next question will be from the line of Jonathan Siegman with Stifel. Your line is open. Please go ahead.

Chris Cage: And Scott, just, I mean, as with any annual guide that we put out, there always is some element of new business that has to be won throughout the year, whether that comes from Golden Dome or comes from the robust number of other submittals that we have in the pipeline. You know, it can be any number of those sources. But yeah, if Golden Dome ramps up in any material way, we see upside from that.

Scott just I mean as with any annual guide that we've put out there always is some element of new business that has to be won throughout the year, whether that comes from Golden dome or it comes from the robust number of other <unk> that we have in the pipeline.

You you've highlighted Maritime as an area that could be potential for this year incrementally. Just can you talk a little bit about where the government is in the progress and and identifying programs? Um and when we might expect to actually hear something on some of these, thank you.

Jonathan Siegmann: Good morning, Tom, Chris, and Stuart. Thanks for taking my question.

Tom Bell: Good morning.

[Company Representative] (Leidos Holdings Inc): Good morning.

Chris Cage: Good morning.

Jonathan Siegmann: You've highlighted maritime as an area that could be potential for this year incrementally. Just, can you talk a little bit about where the government is in the progress in identifying programs, and when we might expect to actually hear something on some of these? Thank you.

It can be any number of those sources, but yes, if golden dome ramps up in any material way, we see upside.

Tom Bell: Golden Dome, FAA, the microelectronics, all of them. There, there's a ton of opportunities out there where we're poised to exploit over the coming months.

Golden Dome FAA.

The microelectronics.

All of them there is a ton of opportunities out there, where we're poised to exploit over the coming months.

Tom Bell: Yeah, thank you. Yes, the Department of the Navy has a well-understood and publicized MUSV program for a large quantity of medium unmanned surface vehicles. We have had robust dialogue with the Department of the Navy and INDOPACOM, the combatant commanders who want to have this capability. And what we are actually talking about, Jonathan, is not only how we can help make sure that there are vessels built, but the critical secret sauce for Leidos that we've been talking and has been exciting customers greatly, is the payload and mission packages that makes those vessels effective in a war scenario. And so, what our secret sauce is, is not only how we can partner with private equity and shipyards around the United States to either retrofit or new build unmanned surface vessels. Frankly, that's not hard.

Scott Mikus: Thank you.

Thank you.

Operator: Thank you. One moment for our next question. Our next question will be from the line of Jonathan Siegmann with Stifel. Your line is open. Please go ahead.

Thank you one moment for our next question.

Our next question will be from the line of Jonathan Siegman with Stifel. Your line is open. Please go ahead.

Yeah, thank you. Yes, the department of Navy has a well understood and publicized musvorologist.

Good morning, Tom Christian Stuart Thanks for taking my question.

Jonathan Siegmann: Good morning, Tom, Chris, and Stuart. Thanks for taking my question.

Tom Bell: Good morning.

Chris Cage: Good morning.

Good morning.

Jonathan Siegmann: You've highlighted maritime as an area that could be potential for this year incrementally. Just can you talk a little bit about where the government is in the progress in identifying programs, and when we might expect to actually hear something on some of these? Thank you.

Probably a lot of maritime as an area there could be potential for this year incrementally just can you talk a little bit about where the government is in progress.

Indemnifying programs.

And when we might expect to actually hear something on some of these thank you.

Yes. Thank you, yes, the department of Navy has a well understood and publicized Mus V program for.

A large quantity of medium unmanned surface vehicles.

We have had robust dialogue with the department of NATO Department of the Navy and.

Indo pay com the combatant commanders, who wants to have this capability and what we are actually talking about Jonathan is not only how we can help make sure that there are vessels built.

Tom Bell: The hard part is: How do you make those vessels effective in the battle of the future? What INDOPACOM and other combatant commanders are anxious about. And that's where Leidos' long-term investments in our R&D, in C5ISR, in space really give us a differentiator in terms of how that vessel becomes effective for the combatant commander. Now, as far as timing, we're eager also. The dialogue in the Department of Navy is robust. We expect them to come forward with their firm plans soon, but we're still waiting. I hope that helps, Jonathan.

But the critical key source for light us that we've been talking and has been exciting customers greatly.

Greatly is the payload and Mission packages that makes those vessels effective in a war scenario. And so, uh, what our secret sauce is is not only how we can partner with private equity and shipyards around the United States, to either retrofit or new build, uh, unmanned surface vessels. Uh, frankly that's not hard. The hard part is, how do you make those vessels effective in the battle of the future? What Indo paycom, and other combatant commanders are are anxious about and that's where losses long-term investments in, uh, our our uh, our R&D in C4, C5 ISR in space. Uh, really give us a differentiator in terms of how that vessel becomes effective for the combatant commander. Now, as far as timing,

Is the payload and mission packages that makes those vessels effective in a war scenario.

So what our secret sauces is not only how we can partner with private equity in shipyards around the United States to either retrofit or new build unmanned surface vessels.

Uh, we are eager. Also, the dialogue in the department of Navy is robust. Uh, we expect, uh, them to come forward with their firm plans soon but, uh, we, we are still waiting. I hope that helps Jonathan

Thank you very much. Good luck with the year.

Thank you.

Tom Bell: Frankly, that's not hard. The hard part is: How do you make those vessels effective in the battle of the future? What INDOPACOM and other combatant commanders are anxious about. And that's where Leidos' long-term investments in our R&D in C4, C5ISR, in space really give us a differentiator in terms of how that vessel becomes effective for the combatant commander. Now, as far as timing, we're eager also. The dialogue in the Department of Navy is robust. We expect them to come forward with their firm plans soon, but we're still waiting. I hope that helps, Jonathan.

Frankly, that's not hard the hard part is how do you make those vessels effective in the battle of the future what into pay com and other combatant commanders are are anxious about and Thats, where light OS as long term investments in <unk>.

Thank you. And as a reminder, if you would like to ask a question, please press star 1, 1 1 moment for our next question.

Our next question comes from the line of Gavin Parsons with UVS. Your line is open. Please go ahead.

Thank you morning.

Hey, Gavin.

[Analyst]: Thank you very much. Good luck with the year.

Ken Herbert: Thank you very much. Good luck with the year.

Our our R&D in <unk> C five ISR in space.

Tom Bell: Thank you.

Operator: Thank you. And as a reminder, if you would like to ask a question, please press star one one. One moment for our next question. Our next question comes from the line of Gavin Parsons with UBS. Your line is open. Please go ahead.

Uh, I really appreciate all the guidance by segment. If if I wrap all that up can you hold and expand the mid 13%? Even dumb. Margin Beyond 26.

Really give us a differentiator in terms of how that vessel becomes effective.

For the combatant commander now as far as timing.

Gavin Parsons: Thank you. Morning.

We're eager also the dialogue and the department of Navy is robust, we expect them to come forward with their firm plans soon but.

Tom Bell: Hey, Gavin.

Gavin Parsons: I really appreciate all the guidance by segment. If I wrap all that up, can you hold and expand the mid-13% EBITDA margin beyond 26?

We're still waiting I hope that helps Jonathan.

[Company Representative] (Leidos Holdings Inc): Yeah, I think we dropped some breadcrumbs for you there, Gavin, to see that, the best is yet to come on margins in our newly formed homeland segment and certainly with additional upside in defense. So those are the areas that I would point to on a longer term horizon, where we would expect some additional margin expansion opportunities. And, you know, clearly, we've talked a lot about health today and the work that they've done, the great work that they've done to demonstrate, you know, the value they're bringing to the veterans agency. So the expectation is, yeah, we're not done with margins, but consolidate the gains we've made, reprioritize, fund the critical investments for growth, and then deliver, exceptional, results on that in 2027 and beyond.

Chris Cage: Yeah, I think we dropped some breadcrumbs for you there, Gavin, to see that, the best is yet to come on margins in our newly formed homeland segment and certainly with additional upside in defense. So those are the areas that I would point to on a longer term horizon, where we would expect some additional margin expansion opportunities. And, you know, clearly, we've talked a lot about health today and the work that they've done, the great work that they've done to demonstrate, you know, the value they're bringing to the veterans agency. So the expectation is, yeah, we're not done with margins, but consolidate the gains we've made, reprioritize, fund the critical investments for growth, and then deliver, exceptional, results on that in 2027 and beyond.

Jonathan Siegmann: Thank you very much. Good luck for the year.

Thank you very much good luck for the year.

Tom Bell: Thank you.

Thank you.

Operator: Thank you, and as a reminder, if you would like to ask a question, please press star one one. One moment for our next question. Our next question comes from the line of Gavin Parsons with UBS. Your line is open. Please go ahead.

Thank you and as a reminder, if you would like to ask a question. Please press star 111 moment for our next question.

Yeah.

Our next question comes from the line of Gavin Parsons with UBS. Your line is open. Please go ahead.

Gavin Parsons: Thank you. Morning.

Thank you good morning.

Yeah, I think we we dropped some breadcrumbs for you there. Gavin to see that The Best Is Yet To Come on margins in our newly formed Homeland segment in in certain with the additional upside in defense. So those are the areas that I would point to on a longer term Horizon, where we would expect some additional margin expansion opportunities. Um and you know, clearly we've talked a lot about health today and the work that they've done, the great work that they've done to demonstrate, you know, the value, they're bringing to the veterans agency. Uh so the expectation is yeah, we're not done with margins but consolidate the gains we've made re prioritize fund the critical Investments for growth and then deliver uh exceptional uh, results on that in 27 and Beyond and don't uh and and don't negate the

Tom Bell: Hey, Gavin.

Hey, Kevin.

Gavin Parsons: I really appreciate all the guidance by segment. If I wrap all that up, can you hold and expand the mid-13% EBITDA margin beyond '26?

Really appreciate all the guidance by segment.

As I wrap all that up can you hold and expand the mid 13% EBITDA margin beyond 'twenty six.

Chris Cage: ... Yeah, I think we, we dropped some breadcrumbs for you there, Gavin, to see that, the best is yet to come on margins in our newly formed homeland segment and, and certainly with additional upside in defense. So those are the areas that I would point to on a longer term horizon, where we would expect some additional margin expansion opportunities. And, you know, clearly, we've talked a lot about health today and the work that they've done, the great work that they've done to demonstrate, you know, the value they're bringing to the veterans agency. So the expectation is, yeah, we're not done with margins, but consolidate the gains we've made, reprioritize, fund the critical investments for growth, and then deliver exceptional results on that in 2027 and beyond.

Yes, I think we dropped some breadcrumbs for you there Gavin to see that the best is yet to come on margins in our newly formed homeland segment in and certainly with the additional upside in defense. So those are the areas that I would point to on a longer term horizon, where we would expect some additional margin expansion opportunities.

Tom Bell: Don't negate the effects of our transformation office. We're very bullish about that being able to help Leidos become more efficient, and as a result, obviously, there could be some margin uplift there as our overheads come down. And as the year goes on, as we bring in Entrust, we expect that to be margin accretive. So we're very excited about the portfolio that's laying out for the year to come.

Effects of our transformation office, we're very bullish about that being able to help Lidos become more efficient. And as a result obviously there could be some margin uplift. Their as our overheads come down and as the year goes on, uh, as we, uh, bring in and Trust, uh, we expect that to be margin accretive. So we're very excited about, uh, the portfolio. That's laying out for the year to come.

Operator. Looks like we have time for, uh, 1 more question. 1 moment for.

And clearly we've talked a lot about health today and the work that they've done the great work that they've done to demonstrate the value they are bringing to the veterans agency.

The line of Kraig Conrad with Jeffrey, your line is open. Please go ahead.

So the expectation is yes, we're not done with margins, but consolidate the gains we've made re prioritize on the critical investments for growth and then deliver.

[Company Representative] (Leidos Holdings Inc): Operator-

Chris Cage: Operator-

Exceptional results on that in 2007 and beyond.

Gavin Parsons: Thank you.

[Company Representative] (Leidos Holdings Inc): - It looks like we have time for one more question.

Chris Cage: - It looks like we have time for one more question.

Operator: One moment for our last question. Our last question will come from the line of Craig Conrad with Jefferies. Your line is open. Please go ahead.

Tom Bell: And don't negate the effects of our transformation office. We're very bullish about that being able to help Leidos become more efficient. And as a result, obviously, there could be some margin uplift there as our overheads come down. And as the year goes on, as we bring in Entrust, we expect that to be margin accretive. So we're very excited about the portfolio that's laying out for the year to come.

And don't.

Negate the effects of our transformation office, we're very bullish about.

That being able to help light us become more efficient and as a result, obviously there could be some margin uplift there as our overheads come down.

Greg Konrad: Good morning. Just wanted to follow up on the investment conversation. I mean, you talked about 3x CapEx in 2026 and continuing to increase investment. I mean, how do you think about that stepping up, you know, beyond this year? How much of that's kind of in backlog and scaling versus future decisions? And then, you know, with that, you know, how do you think about cash-on-cash returns? Because, you know, with some of these deals, we've seen better working capital offset those investments. Thanks.

Uh, good morning. Um, just wanted to follow up on the investment conversation. I mean, you talked about 3x capex in 26 and continuing to increase investment. I mean, how do you think about that stepping up, you know, beyond this year? How much of that kind of been backlog and scaling versus future decisions and then, you know, with that, you know, how do you think about cash on cash returns because you know, with some of these deals we've seen better working. Capital offsets those Investments thanks.

And as the year goes on.

As we bring in and trust.

We expect that to be margin accretive. So we're very excited about the portfolio that's laying out for the year to come.

Chris Cage: Operator-

Operator.

Tom Bell: Thank you.

Chris Cage: - It looks like we have time for one more question.

Time for one more question one moment for last question.

Operator: One moment for our last question. Our last question will come from the line of Craig Conrad with Jefferies. Your line is open. Please go ahead.

Our last question will come from the line of Greg Konrad with Jefferies. Your line is open. Please go ahead.

Yeah Greg. So I mean we haven't you know, mapped out the the 27 and Beyond yet. I mean, clearly the items were investing in this year are to scale up for the most part scale up capabilities that are in hand programs that were executing on or see clear line of sight demand for expansion and we're, you know, we're finding ways to accommodate a higher ramp up on those than perhaps was previously contemplated.

[Company Representative] (Leidos Holdings Inc): Yeah, Craig. So, I mean, we haven't, you know, mapped out the 27 and beyond yet. I mean, clearly, the items we're investing in this year are to scale up, for the most part, scale up capabilities that are in hand, programs that we're executing on or see clear line of sight demand for expansion, and we're, you know, we're finding ways to accommodate a higher ramp-up on those than perhaps was previously contemplated. And you're right, as you think about, you know, with any investment outlay that we make, clearly, how do we get cash back in the door to make the cash-on-cash return more attractive? You know, ENTRUST will be an example of that. How do we bring cash in from that business more rapidly, find ways to optimize their working capital performance?

Chris Cage: Yeah, Craig. So, I mean, we haven't, you know, mapped out the 27 and beyond yet. I mean, clearly, the items we're investing in this year are to scale up, for the most part, scale up capabilities that are in hand, programs that we're executing on or see clear line of sight demand for expansion, and we're, you know, we're finding ways to accommodate a higher ramp-up on those than perhaps was previously contemplated. And you're right, as you think about, you know, with any investment outlay that we make, clearly, how do we get cash back in the door to make the cash-on-cash return more attractive? You know, ENTRUST will be an example of that. How do we bring cash in from that business more rapidly, find ways to optimize their working capital performance?

Good morning.

Just wanted to follow up on the investment conversation I mean, you talked about <unk> capex in 2006, and continuing to increase investment.

How do you think about that stepping up.

And this year, how much of that is kind of in backlog and scaling versus future decisions and then.

With that.

Do you think about cash on cash returns again with some of these deals we've seen better working capital offset those investments. Thanks.

Chris Cage: Yeah, Craig. So, I mean, we haven't, you know, mapped out the 27 and beyond yet. I mean, clearly, the items we're investing in this year are to scale up, for the most part, scale up capabilities that are in hand, programs that we're executing on or see clear line of sight demand for expansion. And we're, you know, finding ways to accommodate a higher ramp-up on those than perhaps was previously contemplated. And you're right, as you think about, you know, with any investment outlay that we make, clearly, how do we get cash back in the door to make the cash-on-cash return more attractive? You know, ENTRUST will be an example of that. How do we bring cash in from that business more rapidly, find ways to optimize their working capital performance?

Yeah, Greg So I mean, we haven't.

Mapped out the 27 or beyond yet I mean, clearly the items. We're investing in this year are to scale up for the most part scale up capabilities that are in hand programs that we're executing on or see clear line of sight demand for expansion and workflow.

[Company Representative] (Leidos Holdings Inc): You know, I think that's a strength of Leidos and an area that Tom alluded to, our transformation office. One of the initial things they're gonna be taking on are ways that we can look to even streamline our DSO process. And if we could take a day or two out of there, that really moves the needle for Leidos. So we're gonna be focused on that heavily. We're gonna be looking to realize attractive returns on all the investments we make. But I don't, I don't think that you would say the $350 million of CapEx is the new normal, you know, going beyond this year. It was situation dependent. We have the capacity to do that if, if the business case is there, but not necessarily what we see on a, an enduring basis.

Chris Cage: You know, I think that's a strength of Leidos and an area that Tom alluded to, our transformation office. One of the initial things they're gonna be taking on are ways that we can look to even streamline our DSO process. And if we could take a day or two out of there, that really moves the needle for Leidos. So we're gonna be focused on that heavily. We're gonna be looking to realize attractive returns on all the investments we make. But I don't, I don't think that you would say the $350 million of CapEx is the new normal, you know, going beyond this year. It was situation dependent. We have the capacity to do that if, if the business case is there, but not necessarily what we see on a, an enduring basis.

We're finding ways to accommodate a higher ramp up on those than perhaps was previously contemplated.

Uh, looking to realize, uh, a tractor returns in all the Investments that we make. But I don't, I don't think that you would say, the 350 of capex is The New Normal, you know, going Beyond this year, it was situation dependent. We have a capacity to do that. If if the business case is there, but not necessarily what we see on a enduring basis,

Thank you.

And you're right as you think about with any.

Thank you.

Investment outlay that we make clearly how do we get cash back in the door to make the cash on cash return more attractive.

Thank you. And I would now like to hand the conference back over to Stuart Davis for closing remarks.

Entrust will be an example of that how do we bring cash in from that business more rapidly find ways to optimize our working capital performance.

Chris Cage: You know, I think that's a strength of Leidos and an area that Tom alluded to, our transformation office. One of the initial things they're gonna be taking on are ways that we can look to even streamline our DSO process. And if we could take a day or two out of there, that really moves the needle for Leidos. So we're gonna be focused on that heavily. We're gonna be looking to realize attractive returns on all the investments we make. But I don't think that you would say the $350 million of CapEx is the new normal, you know, going beyond this year. It was situation dependent. We have the capacity to do that if the business case is there, but not necessarily what we see on an enduring basis.

Operator appreciate your uh assistance on this morning's call and thank you all for tuning in this morning and your interest in Lidos. We look forward to updating you again soon. Have a great day.

I think that's a strength of lighthouse an area.

Concludes today's conference call. Thank you for participating.

Tom alluded to our transformation office one of the initial things theyre going to be taking on are ways that we can look to even streamline our DSO process and if we could take a day or two out of there that really moves the needle for lineup. So we're going to be focused on that heavily we're going to be looking to realize.

Greg Konrad: Thank you.

now, disconnect

[Company Representative] (Leidos Holdings Inc): Thank you.

Chris Cage: Thank you.

Operator: Thank you. I would now like to hand the conference back over to Stuart Davis for closing remarks.

Tom Bell: Operator, appreciate your assistance on this morning's call, and thank you all for tuning in this morning and your interest in Leidos. We look forward to updating you again soon. Have a great day.

Stuart Davis: Operator, appreciate your assistance on this morning's call, and thank you all for tuning in this morning and your interest in Leidos. We look forward to updating you again soon. Have a great day.

Returns on all the investments, we make but I don't I don't think that you would say.

Operator: This concludes today's conference call. Thank you for participating, and you may now disconnect.

<unk> 50 of Capex as the new normal going beyond this year with situation dependent we have the capacity to do that if the business case is there, but not necessarily what we see on our.

Enduring basis.

Greg Konrad: Thank you.

Thank you.

Chris Cage: Thank you.

Thank you thank.

Operator: Thank you. I would now like to hand the conference back over to Stuart Davis for closing remarks.

Thank you.

I'd now like to hand, the conference back over to Stuart Davis for closing remarks.

Operator I appreciate your assistance on this morning's call and thank you all for tuning in this morning, and your interest in <unk>. We look forward to updating you again soon have a great day.

Operator: This concludes today's conference call. Thank you for participating, and you may now disconnect.

This concludes today's conference call. Thank you for participating and you may now disconnect.

Yeah.

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Okay.

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Okay.

Yes.

Okay.

Yes.

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