Leidos Holdings, Inc.LDOS
Leidos Holdings, Inc. Segments Disclosure
Note 20—Business Segments
Our operations and reportable segments are organized around the customers and markets we serve. We define our reportable segments based on the way the chief operating decision maker ("CODM"), currently the Chief Executive Officer, manages the operations for purposes of allocating resources and assessing performance. The CODM considers segment revenue and operating income to assist with the evaluation of strategic business decisions, including potential acquisitions or divestitures, whether to invest in certain products or services, share repurchases and the declaration of dividends.
Our business is aligned into six operating segments, which are aggregated into four reportable segments in accordance with the criteria established under ASC 280, Segment Reporting: National Security & Digital, Health & Civil, Commercial & International and Defense Systems. Our reportable segments are focused on specific, defined capability sets that we bring to our customers. Additionally, we separately present the unallocated costs associated with corporate functions as Corporate.
Our National Security & Digital business provides leading-edge and technologically advanced services, solutions and products across substantially all U.S. federal government customers. Our advanced capabilities allow us to provide technology-enabled services, software capabilities and IT modernization.
Our Health & Civil business provides services and solutions to federal and commercial customers in the areas of public health, care coordination, life and environmental sciences and transportation. We are dedicated to delivering effective and affordable solutions that are responsible for the health and well-being of people, including service members and veterans.
Our Commercial & International business delivers a portfolio of products, services, and solutions aimed at securing national assets, modernizing energy and critical infrastructure, and enhancing mission outcomes. Our key customers include Investor-Owned Utilities, government agencies in the United Kingdom and Australia, the Transportation Security Administration, U.S. Customs & Border Protection ("CBP"), as well as airports and ports and borders authorities.
Our Defense Systems business addresses threats facing our nation by rapidly prototyping and delivering advanced hardware, software, and integrated systems solutions for the DoW, Army, Navy, Air Force, Space Force, Marine Corps, United States Special Operations Command, Defense Advanced Research Projects Agency and intelligence agencies. We are heavily engaged in the top defense Research Development Test and Evaluation priorities that are driven by evolving global threats. This business is dedicated to delivering cost-effective solutions and services in the space, airborne, land and maritime domains and supporting critical missions worldwide.
Corporate includes the operations of various corporate activities, certain corporate expense items that are not reimbursed by our U.S. government customers and certain other expense items excluded from a reportable segment’s performance. The following table summarizes business segment information for the periods presented:
| Year Ended January 2, 2026 | ||||||||||||||||||||||||||||||||
| (in millions) | National Security & Digital | Health & Civil | Commercial & International | Defense Systems | Total | |||||||||||||||||||||||||||
| Revenues | $ | 7,611 | $ | 5,069 | $ | 2,315 | $ | 2,179 | $ | 17,174 | ||||||||||||||||||||||
| Less: | ||||||||||||||||||||||||||||||||
| Direct labor | 1,955 | 930 | 414 | 427 | 3,726 | |||||||||||||||||||||||||||
| Amortization of intangible assets | 29 | 24 | 28 | 49 | 130 | |||||||||||||||||||||||||||
| Other segment expense | 4,867 | 2,913 | 1,707 | 1,547 | 11,034 | |||||||||||||||||||||||||||
| Segment operating income | $ | 760 | $ | 1,202 | $ | 166 | $ | 156 | $ | 2,284 | ||||||||||||||||||||||
Corporate expense | 175 | |||||||||||||||||||||||||||||||
| Total operating income | $ | 2,109 | ||||||||||||||||||||||||||||||
| Year Ended January 3, 2025 | ||||||||||||||||||||||||||||||||
| (in millions) | National Security & Digital | Health & Civil | Commercial & International | Defense Systems | Total | |||||||||||||||||||||||||||
| Revenues | $ | 7,365 | $ | 5,015 | $ | 2,252 | $ | 2,030 | $ | 16,662 | ||||||||||||||||||||||
| Less: | ||||||||||||||||||||||||||||||||
| Direct labor | 1,934 | 951 | 407 | 407 | 3,699 | |||||||||||||||||||||||||||
| Amortization of intangible assets | 23 | 27 | 30 | 67 | 147 | |||||||||||||||||||||||||||
| Other segment expense | 4,688 | 2,942 | 1,711 | 1,462 | 10,803 | |||||||||||||||||||||||||||
Segment operating income | $ | 720 | $ | 1,095 | $ | 104 | $ | 94 | $ | 2,013 | ||||||||||||||||||||||
Corporate expense | 186 | |||||||||||||||||||||||||||||||
| Total operating income | $ | 1,827 | ||||||||||||||||||||||||||||||
| Year Ended December 29, 2023 | ||||||||||||||||||||||||||||||||
(in millions) | National Security & Digital | Health & Civil | Commercial & International | Defense Systems | Total | |||||||||||||||||||||||||||
| Revenues | $ | 7,196 | $ | 4,238 | $ | 2,126 | $ | 1,878 | $ | 15,438 | ||||||||||||||||||||||
| Less: | ||||||||||||||||||||||||||||||||
| Direct labor | 1,838 | 894 | 386 | 378 | 3,496 | |||||||||||||||||||||||||||
| Amortization of intangible assets | 47 | 40 | 37 | 78 | 202 | |||||||||||||||||||||||||||
| Other segment expense | 4,639 | 2,730 | 2,263 | 1,357 | 10,989 | |||||||||||||||||||||||||||
Segment operating income (loss) | $ | 672 | $ | 574 | $ | (560) | $ | 65 | $ | 751 | ||||||||||||||||||||||
Corporate expense | 130 | |||||||||||||||||||||||||||||||
| Total operating income | $ | 621 | ||||||||||||||||||||||||||||||
The statement of operations performance measures used to evaluate segment performance are revenues and operating income. As a result, “Interest expense, net,” “Other income (expense), net,” and “Income tax expense,” as reported in the consolidated financial statements are not allocated to our segments.
Other segment expenses include direct program costs such as materials and subcontractor expenses, as well as allocable indirect costs such as depreciation and Corporate compensation expenses, but excludes direct labor which is separately presented above. The Health & Civil and Defense Systems segments also include equity earnings of non-consolidated subsidiaries within operating income.
Under U.S. government Cost Accounting Standards, indirect costs including depreciation expense are collected in indirect cost pools, which are then collectively allocated out to the reportable segments based on a representative causal or beneficial relationship of the costs in the pool to the costs in the base. While depreciation expense is a component of the allocated costs, the allocation process precludes depreciation expense from being specifically identified by the individual reportable segments. For this reason, depreciation expense by reportable segment has not been reported above.
Asset information by segment is not a key measure of performance used by the CODM.
We generated approximately 87% of our total revenues in fiscal 2025, 2024 and 2023 from contracts with the U.S. government, either as a prime contractor or a subcontractor to other contractors engaged in work for the U.S. government. Revenues under contracts with the DoW and U.S. Intelligence Community, including subcontracts under which the DoW or the U.S. Intelligence Community is the ultimate purchaser, represented approximately 49% of our total revenues for both fiscal 2025 and 2023, and 48% for fiscal 2024.
Revenues generated by entities outside of the United States were approximately 8% in both fiscal 2025 and 2024, and 9% in fiscal 2023. As such, additional financial information by geographic location is not presented.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | Feb 17, 2026 | Showing above |
| 2025 | Feb 11, 2025 | |
| 2023 | Feb 13, 2024 | |
| 2022 | Feb 14, 2023 | |
| 2021 | Feb 23, 2021 | |
| 2020 | Feb 18, 2020 | |
| 2018 | Feb 19, 2019 | |
| 2017 | Feb 23, 2018 | |
| 2016 | Feb 24, 2017 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.