Leidos Holdings, Inc.
Leidos Holdings, Inc., together with its subsidiaries, provides services and solutions for government and commercial customers in the United States and internationally. The National Security & Digital segment provides national security software; services by using artificial intelligence and machine learning to coordinate sea, ground, air, and space to help warfighters; offensive, defensive, and physical cyber operation solutions; intelligence analysis, operational support, logistics operations, security, linguistics, force production, biometrics, chemical, biological, radiological, nuclear, and explosives, energetics, training, and other services; and Digital Modernization and transformation services. The Health & Civil segment offers air traffic control systems; health mission software; managed health services; infrastructure management and operation; logistical operations and information technology support; and life science research and development support services. The Commercial & International segment provides power grid engineering and design, grid modernization, utility planning and consulting, energy management and efficiency, technology-driven innovation, and software and application development; people scanners, computed tomography carry-on baggage scanners, checked baggage scanners, and explosive trace detectors; mobile, non-intrusive ports and borders inspection systems; and open-architecture platform that transforms airport security by integrating disparate devices and technologies into a unified management system. The Defense Systems segment offers air and missile defense, maritime, aerospace, and cyber and threat systems; offers airborne training, intelligence, surveillance, and reconnaissance missions; and provides space-based electro-optic infrared systems, multi/hyperspectral, electronic warfare and signals intelligence, and communications payloads. Leidos Holdings, Inc. was founded in 1969 and is headquartered in Reston, Virginia.
What does it do?
Leidos is a giant behind-the-scenes technology company that mostly works for the US government — think the military, intelligence agencies, and federal departments like the VA and Homeland Security. They build things like software that helps the Navy track threats at sea, cybersecurity systems that protect government networks from hackers, and IT systems that manage veterans' health records. You probably haven't heard of them, but if you've ever used a VA hospital or flown through a US airport with advanced security screening, you've likely touched their work. They operate across defence, health, and civil infrastructure — basically anywhere the government needs complex tech to run smoothly.
With geopolitical tensions rising globally — from Ukraine to the South China Sea — US defence and intelligence spending is at a multi-decade high, and Leidos sits right at the centre of that cash flow. AI is also reshaping how militaries operate, and Leidos is already embedding machine learning into battlefield coordination tools, putting them ahead of many traditional defence contractors. For investors, this is a company with a massive, sticky customer base (the US government doesn't switch vendors easily) at exactly the moment that customer is spending more than ever.
How does it make money?
Leidos makes money by winning long-term government contracts — essentially getting paid to deliver technology services, run IT systems, and provide solutions over multi-year periods. Their revenue hit $17.2 billion in the latest year, up from $16.7 billion the prior year, showing steady growth. The business is split across three main areas: national security and defence (think AI-driven military systems and cyber operations), health (managing massive IT systems for the VA), and civil (airport security tech and federal agency IT). Most of their revenue is recurring — once they win a government contract, they often hold it for years, which makes their income relatively predictable.
Why do investors care?
The core investment story is simple: the US government is spending more on defence and digital infrastructure, and Leidos is one of the biggest beneficiaries with the scale to win the largest contracts. The AI angle is real here — Leidos is integrating AI into defence systems at a time when the Pentagon is actively pushing to modernise, which could unlock new, higher-margin contracts. For the thesis to work, Leidos needs to keep winning contract renewals and land new large awards, maintain its reputation for delivery so it doesn't lose incumbent positions, and benefit from continued or growing government budgets. Margin improvement is also a key watch — gross profit data suggests thin margins typical of services businesses, so any efficiency gains would meaningfully lift earnings.
Deep Dive
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