Leidos Holdings, Inc.LDOS
Leidos Holdings, Inc. Revenue Disclosure
Note 4—Revenues
REMAINING PERFORMANCE OBLIGATIONS
Remaining performance obligations (“RPO”) represent the expected value of exercised contracts, both funded and unfunded, less revenue recognized to date. RPO does not include unexercised option periods and future potential task orders expected to be awarded under IDIQ contracts, General Services Administration Schedule or other master agreement contract vehicles, with the exception of certain IDIQ contracts where task orders are not competitively awarded and separately priced but instead are used as a funding mechanism, and where there is a basis for estimating future revenues and funding on future anticipated task orders.
As of January 2, 2026, we had $18.5 billion of RPO and expect to recognize approximately 65% and 82% over the next 12 months and 24 months, respectively, with the remaining to be recognized thereafter.
DISAGGREGATION OF REVENUES
We disaggregate revenues by customer-type, contract-type and geographic location for each of our reportable segments. These categories represent how the nature, timing and uncertainty of revenues and cash flows are affected.
Disaggregated revenues by customer-type were as follows:
| Year Ended January 2, 2026 | |||||||||||||||||||||||||||||
| (in millions) | National Security & Digital | Health & Civil | Commercial & International | Defense Systems | Total | ||||||||||||||||||||||||
| DoW and U.S. Intelligence Community | $ | 5,457 | $ | 970 | $ | 27 | $ | 1,972 | $ | 8,426 | |||||||||||||||||||
Other U.S. government agencies(1) | 1,985 | 4,003 | 388 | 82 | 6,458 | ||||||||||||||||||||||||
| Commercial and non-U.S. customers | 121 | 80 | 1,897 | 125 | 2,223 | ||||||||||||||||||||||||
| Total | $ | 7,563 | $ | 5,053 | $ | 2,312 | $ | 2,179 | $ | 17,107 | |||||||||||||||||||
| Year Ended January 3, 2025 | |||||||||||||||||||||||||||||
| (in millions) | National Security & Digital | Health & Civil | Commercial & International | Defense Systems | Total | ||||||||||||||||||||||||
| DoW and U.S. Intelligence Community | $ | 5,074 | $ | 1,032 | $ | 44 | $ | 1,812 | $ | 7,962 | |||||||||||||||||||
Other U.S. government agencies(1) | 2,115 | 3,899 | 379 | 95 | 6,488 | ||||||||||||||||||||||||
| Commercial and non-U.S. customers | 115 | 63 | 1,825 | 123 | 2,126 | ||||||||||||||||||||||||
| Total | $ | 7,304 | $ | 4,994 | $ | 2,248 | $ | 2,030 | $ | 16,576 | |||||||||||||||||||
| Year Ended December 29, 2023 | |||||||||||||||||||||||||||||
| (in millions) | National Security & Digital | Health & Civil | Commercial & International | Defense Systems | Total | ||||||||||||||||||||||||
| DoW and U.S. Intelligence Community | $ | 4,799 | $ | 1,059 | $ | 35 | $ | 1,684 | $ | 7,577 | |||||||||||||||||||
Other U.S. government agencies(1) | 2,212 | 3,082 | 319 | 121 | 5,734 | ||||||||||||||||||||||||
| Commercial and non-U.S. customers | 131 | 61 | 1,762 | 74 | 2,028 | ||||||||||||||||||||||||
| Total | $ | 7,142 | $ | 4,202 | $ | 2,116 | $ | 1,879 | $ | 15,339 | |||||||||||||||||||
(1)Includes federal government agencies other than the DoW and U.S. Intelligence Community, as well as state and local government agencies.
The majority of our revenues are generated from U.S. government contracts, either as a prime contractor or as a subcontractor to other contractors. Revenues from the U.S. government can be adversely impacted by spending caps or changes in budgetary priorities of the U.S. government, as well as delays in program start dates or the award of a contract.
Disaggregated revenues by contract-type were as follows:
| Year Ended January 2, 2026 | |||||||||||||||||||||||||||||
(in millions) | National Security & Digital | Health & Civil | Commercial & International | Defense Systems | Total | ||||||||||||||||||||||||
| Cost-reimbursement and fixed-price-incentive-fee | $ | 4,127 | $ | 1,807 | $ | 380 | $ | 1,292 | $ | 7,606 | |||||||||||||||||||
| Firm-fixed-price | 2,109 | 3,057 | 1,442 | 739 | 7,347 | ||||||||||||||||||||||||
| Time-and-materials and fixed-price-level-of-effort | 1,327 | 189 | 490 | 148 | 2,154 | ||||||||||||||||||||||||
| Total | $ | 7,563 | $ | 5,053 | $ | 2,312 | $ | 2,179 | $ | 17,107 | |||||||||||||||||||
| Year Ended January 3, 2025 | |||||||||||||||||||||||||||||
(in millions) | National Security & Digital | Health & Civil | Commercial & International | Defense Systems | Total | ||||||||||||||||||||||||
| Cost-reimbursement and fixed-price-incentive-fee | $ | 3,870 | $ | 1,787 | $ | 358 | $ | 1,290 | $ | 7,305 | |||||||||||||||||||
| Firm-fixed-price | 2,023 | 2,990 | 1,454 | 587 | 7,054 | ||||||||||||||||||||||||
| Time-and-materials and fixed-price-level-of-effort | 1,411 | 217 | 436 | 153 | 2,217 | ||||||||||||||||||||||||
| Total | $ | 7,304 | $ | 4,994 | $ | 2,248 | $ | 2,030 | $ | 16,576 | |||||||||||||||||||
| Year Ended December 29, 2023 | |||||||||||||||||||||||||||||
(in millions) | National Security & Digital | Health & Civil | Commercial & International | Defense Systems | Total | ||||||||||||||||||||||||
| Cost-reimbursement and fixed-price-incentive-fee | $ | 3,808 | $ | 2,015 | $ | 345 | $ | 1,173 | $ | 7,341 | |||||||||||||||||||
| Firm-fixed-price | 2,040 | 2,006 | 1,351 | 567 | 5,964 | ||||||||||||||||||||||||
| Time-and-materials and fixed-price-level-of-effort | 1,294 | 181 | 420 | 139 | 2,034 | ||||||||||||||||||||||||
| Total | $ | 7,142 | $ | 4,202 | $ | 2,116 | $ | 1,879 | $ | 15,339 | |||||||||||||||||||
Cost-reimbursement and FPIF contracts are generally lower risk and have lower profits. T&M and FPLOE contracts are also lower risk, but profits may vary depending on actual labor costs compared to negotiated contract billing rates. FFP contracts offer the potential for higher profits while increasing the exposure to risk of cost overruns.
Disaggregated revenues by geographic location were as follows:
| Year Ended January 2, 2026 | |||||||||||||||||||||||||||||
(in millions) | National Security & Digital | Health & Civil | Commercial & International | Defense Systems | Total | ||||||||||||||||||||||||
| United States | $ | 7,520 | $ | 5,044 | $ | 993 | $ | 2,146 | $ | 15,703 | |||||||||||||||||||
| International | 43 | 9 | 1,319 | 33 | 1,404 | ||||||||||||||||||||||||
| Total | $ | 7,563 | $ | 5,053 | $ | 2,312 | $ | 2,179 | $ | 17,107 | |||||||||||||||||||
| Year Ended January 3, 2025 | |||||||||||||||||||||||||||||
(in millions) | National Security & Digital | Health & Civil | Commercial & International | Defense Systems | Total | ||||||||||||||||||||||||
| United States | $ | 7,274 | $ | 4,989 | $ | 961 | $ | 1,982 | $ | 15,206 | |||||||||||||||||||
| International | 30 | 5 | 1,287 | 48 | 1,370 | ||||||||||||||||||||||||
| Total | $ | 7,304 | $ | 4,994 | $ | 2,248 | $ | 2,030 | $ | 16,576 | |||||||||||||||||||
| Year Ended December 29, 2023 | |||||||||||||||||||||||||||||
(in millions) | National Security & Digital | Health & Civil | Commercial & International | Defense Systems | Total | ||||||||||||||||||||||||
| United States | $ | 7,105 | $ | 4,197 | $ | 852 | $ | 1,861 | $ | 14,015 | |||||||||||||||||||
| International | 37 | 5 | 1,264 | 18 | 1,324 | ||||||||||||||||||||||||
| Total | $ | 7,142 | $ | 4,202 | $ | 2,116 | $ | 1,879 | $ | 15,339 | |||||||||||||||||||
Our international business operations, primarily located in Australia and the UK, are subject to additional and different risks than our U.S. business. Failure to comply with U.S. government laws and regulations applicable to international business, such as the Foreign Corrupt Practices Act or U.S. export control regulations, could have an adverse impact on our business with the U.S. government.
In some countries, there is an increased chance for economic, legal or political changes that may adversely affect the performance of our services, sales of products or repatriation of profits. International transactions can also involve increased financial and legal risks arising from foreign exchange variability, imposition of tariffs or additional taxes and restrictive trade policies and delays or failure to collect amounts due to differing legal systems.
Revenues by contract-type, customer-type and geographic location exclude lease income of $67 million, $86 million and $99 million for fiscal 2025, 2024 and 2023, respectively (see “Note 10—Leases”).
CONTRACT ASSETS AND LIABILITIES
Performance obligations are satisfied either over time as work progresses or at a point in time. Firm-fixed-price contracts are typically billed to the customer using milestone payments while cost-reimbursable and time and materials contracts are typically billed to the customer on a monthly or bi-weekly basis as indicated by the negotiated billing terms and conditions of the contract. As a result, the timing of revenue recognition, customer billings and cash collections for each contract results in a net contract asset or liability at the end of each reporting period.
Contract assets consist of unbilled receivables, which is the amount of revenue recognized that exceeds the amount billed to the customer. Unbilled receivables exclude amounts billable where the right to consideration is unconditional and not billed. Contract liabilities consist of deferred revenue, which represents cash advances received prior to performance for programs and billings in excess of revenue recognized.
The components of contract assets and contract liabilities consisted of the following:
(in millions) | Balance sheet line item | January 2, 2026 | January 3, 2025 | |||||||||||||||||
| Contract assets - current: | ||||||||||||||||||||
| Unbilled receivables | Receivables, net | $ | 894 | $ | 842 | |||||||||||||||
| Contract liabilities - current: | ||||||||||||||||||||
Deferred revenue(1) | Accounts payable and accrued liabilities | $ | 348 | $ | 333 | |||||||||||||||
| Contract liabilities - non-current: | ||||||||||||||||||||
Deferred revenue(1) | Other long-term liabilities | $ | 6 | $ | 10 | |||||||||||||||
(1)Certain contracts record revenue on a net contract basis, and therefore, the respective deferred revenue balance will not fully convert to revenue.
The increase in unbilled receivables was primarily due to revenue recognized on certain contracts, partially offset by the timing of billings on certain contracts. The increase in deferred revenue was primarily due to the timing of advanced payments from customers, offset by revenue recognized during the period.
Revenue recognized during fiscal 2025 and 2024 of $233 million and $278 million, respectively, was included as a contract liability at January 3, 2025, and December 29, 2023, respectively.
There were no impairment losses recognized on contract assets during fiscal 2025, 2024 and 2023.
Free Sentinel
Track for freeWant the next Leidos Holdings, Inc. revenue disclosure the moment it drops?
Set a Sentinel and we'll alert you the moment Leidos Holdings, Inc.'s next filing hits EDGAR. No credit card, your email never gets sold.
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.