What changed in this filing

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Item 1. Business

2026-02-17 compared with 2025-02-11 · 109 added, 162 removed, 261 unchanged (51% of the section changed)

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Leidos is an industry and technology leader serving government and commercial customers with smarter, more efficient digital and mission innovations.

Headquartered in Reston, Virginia, with 48,000, global employees, we bring domain-specific capabilities, technologies and insights to customers in each of these markets by leveraging seven technical core capabilities:

trusted mission artificial intelligence, cyber operations, digital modernization, mission software systems, integrated systems, mission operations, and rapid prototyping and manufacturing.

Applying our technically-advanced solutions to help solve our customers’ most difficult problems has enabled us to build strong relationships with key customers.

Headquartered in Reston, Virginia, with 47,000, global employees, we pursue strategic growth across five pillars:

space and maritime;

energy infrastructure;

digital modernization and cyber;

mission software;

and managed health services.

Our customers include the U.S.

Department of Defense (“DoD”), the U.S.

Department of War (“DoW”), the U.S.

Intelligence Community, the U.S.

Department of Homeland Security (“DHS”), the Federal Aviation Administration (“FAA”), the Department of Veterans Affairs (“VA”), National Aeronautics and Space Administration (“NASA”) and many other U.S.

Department of Homeland Security (“DHS”), the Federal Aviation Administration (“FAA”), the Department of Veterans Affairs (“VA”) and many other U.S.

civilian, state and local government agencies, foreign government agencies and commercial businesses.

With a focus on delivering mission-critical solutions, Leidos generated 87% of revenues for the fiscal year ended January 2, 2026, (“fiscal 2025”) from U.S.

government contracts, either as a prime contractor or a subcontractor to other contractors engaged in work for the U.S.

government contracts, either as a prime contractor or a subcontractor to others.

Approximately 8% of our revenues are generated by entities located outside of the United States.

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OUR BUSINESS SEGMENTS

Beginning in fiscal 2024, we realigned our business and operate in four reportable segments that are focused on specific, defined capability sets we bring to our customers.

As a result of this change, prior year segment results and disclosures have been recast to reflect the current reportable segment structure.

We now operate in the following reportable segments:

As of January 2, 2026, our business is aligned into four reportable segments:

National Security & Digital, Health & Civil, Commercial & International and Defense Systems.

We also separately present the unallocated costs associated with corporate functions as Corporate.

Additionally, we separately present the unallocated costs associated with corporate functions as Corporate.

We provide a wide array of scientific, engineering and technical services and solutions across these reportable segments.

NATIONAL SECURITY & DIGITAL

Our National Security & Digital business provides leading-edge and technologically advanced services, solutions and products, as well as mission software capabilities for defense and intelligence customers in the areas of cyber, logistics, security operations and decision analytics.

We also deliver IT operations and digital transformation programs across all U.S.

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 include the delivery of technology-enabled services, mission software capabilities and IT modernization services.

Our capabilities allow us to provide innovative technology solutions in software development, engineering & design, modeling & simulation, analytics, cyber security, intelligence analysis, linguistics and mission operations.

u Mission Software – We deliver trusted national security software for defense, intelligence, and homeland security customers.

Our mission software aims to provide the decision advantage for protecting the homeland, securing critical infrastructure, enabling logistics and conducting multi-domain operations.

The core of this capability offering is our Secure Development Operations approach that is designed to ensure our code is secure and assured from the start, enabling our mission partners to focus on execution.

Our advanced capabilities allow us to provide technology-enabled services, software capabilities and IT modernization, including:

u Digital Modernization and Transformation – We provide worldwide digital support for our nation’s largest and most critical infrastructure.

We design, develop, implement, protect and maintain IT environments to provide stability, security and flexibility to mission needs.

We also deliver secure, user-centric IT solutions in cloud computing, mobility, application modernization, data center and network modernization, asset management, support desk operations and digital workplace enablement.

We accelerate enterprise transformation using customizable roadmaps and repeatable processes in both classified and unclassified environments for our customers.

u Mission Software – We deliver trusted national security software leveraging artificial intelligence tools for defense, intelligence, and homeland security customers.

u Multi-Domain Solutions – We provide services by using artificial intelligence and machine learning to coordinate sea, ground, air and space rapidly and securely to provide warfighters the right information at the right time for mission advantage.

u Cyber Operations – We offer full-spectrum cyber solutions to include offensive, defensive, and physical cyber operations delivering global-scale cryptographic management solutions to protect our customers’ most critical information and assets.

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u Multi-Domain Solutions – We provide services by using artificial intelligence and machine learning to coordinate sea, ground, air and space rapidly and securely, helping our warfighters have the right information at the right time to take action with decision advantage.

We apply an open architecture approach to digitally connect the joint force across air, land, sea, cyber and space domains in support of the DoD’s multi-domain operations through innovative solutions, essential services and enriched data management tools facilitating critical decision making.

u Cyber Operations – We offer full-spectrum cyber solutions to include offensive, defensive, and physical cyber operations.

We drive new advances for our customers in the areas of Zero Trust, Cognitive Cyber, Quantum Cryptography, Identity, Credential and Access Management.

We deliver global-scale cryptographic management solutions to protect our customers’ most critical information and assets.

u Intelligence Analysis, Mission Support, and Global Logistics Services – We provide intelligence analysis, operational support, logistics operations, security, linguistics, force production, biometrics, Chemical, Biological, Radiological, Nuclear, and Explosives, energetics, and training.

In addition, we deliver tailored IT services and solutions to our customers.

We offer product support and lifecycle sustainment services to our customers, including planning and managing the cost and performance across the product’s lifecycle.

We offer reverse engineering, classified manufacturing and design, and threat exploitation services to U.S.

Intelligence Community customers.

We use predictive analytics and AI to securely deliver transformational logistics to our customers.

We provide a wide range of integrated logistics systems, including rapid procurement, inventory and facility management, and distribution systems.

u Digital Modernization – We provide worldwide digital support for our nation’s largest and most critical infrastructure.

We design, develop, implement and maintain IT environments to provide stability and flexibility to mission needs.

Our capabilities support offerings including cybersecurity, data analytics, and operations and logistics.

Our cybersecurity solutions help detect and manage the most sophisticated cyber threats.

u Digital Transformation – We deliver secure, user-centric IT solutions in cloud computing, mobility, application modernization, DevOps, data center and network modernization, asset management, help desk operations and digital workplace enablement.

We help our customers achieve their missions and business goals by delivering purpose-built solutions, cybersecurity as a standard, efficient project delivery and end-user satisfaction.

We accelerate enterprise transformation using customizable roadmaps and repeatable processes, enabling customers to effectively use their resources and advance their objectives.

Using our cyber expertise, we continually enhance our techniques and processes to build systems that operate resiliently in the face of evolving cyber threats.

Leidos is modernizing enterprise IT in classified and unclassified environments, including programs with the FAA, NASA, U.S.

Department of Justice, Internal Revenue Service, U.S.

Department of Commerce, U.S.

Federal Trade Commission, and U.S.

Department of Housing and Urban Development.

National Security & Digital represented 44% of total revenues for fiscal 2024, 47% of total revenues for both the fiscal year ended December 29, 2023 (“fiscal 2023”) and the fiscal year ended December 30, 2022 (“fiscal 2022”).

National Security & Digital represented 44% of total revenues for both fiscal 2025 and the fiscal year ended January 3, 2025 (“fiscal 2024”) and 47% of total revenues for the fiscal year ended December 29, 2023 (“fiscal 2023”).

HEALTH & CIVIL

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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 core capabilities include health information management services, managed health services, systems and infrastructure modernization, and life sciences research and development.

We help customers achieve their missions and take on the connected world with data-driven insights, improved efficiencies and technological advantages.

Health & Civil represented 30% of total revenues for fiscal 2024 and 27% of total revenues for both fiscal 2023 and fiscal 2022.

u Transportation Solutions – Leidos is a trusted systems developer, service provider and integrator serving Air Navigation Service Providers around the world, including the FAA.

We provide air traffic control systems that help manage the world’s most complex airspace.

We deliver many of the FAA’s key automation systems and services, including the En Route Automation Modernization (“ERAM”), Advanced Technologies and Oceanic Procedures (“ATOP”), Time Based Flow Management, Terminal Flight Data Manager, Enterprise-Information Display System, Geo-7 and Future Flight Services.

Leidos received 10 plus year extensions to the ERAM and ATOP contracts for continued delivery of the evolving National Airspace System needs.

In addition, under the Mode S Beacon Replacement Systems contract, Leidos is supporting the replacement of the FAA’s Mode S Beacon Systems, which are secondary surveillance radar capable of providing surveillance and specific aircraft information necessary to support Air Traffic Control automation in all traffic environments.

We also provide key air traffic control systems around the world, including New Zealand and South Korea.

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u Health Mission Software – Leidos employs holistic-systems used for fielding applied technology solutions across the entire continuum of healthcare.

We deliver a single, common electronic health record to both DoD and VA hospitals and treatment facilities worldwide.

Our responsibilities range from integrating software for the electronic healthcare record vendor and dental record vendors to integrating picture archiving and communications software and more.

We support cybersecurity across all integrated systems.

We also provide enterprise IT solutions to the VA, National Institutes of Health (“NIH”), DoD and other federal health customers to help operate mission critical infrastructure reliably and at a reasonable cost.

Our core capabilities include:

u Managed Health Services – We deploy a national footprint of health clinics and health providers to support care delivery services, including medical disability and behavioral health examinations for the VA, as well as serving other independent medical exam markets.

We have developed unique capabilities in behavioral health management through many decades of experience with a special emphasis on substance abuse services and non-medical counseling.

We believe that these capabilities can be expanded into other clinical adjacencies.

Our managed health services activities leverage our IT and mission enablement capabilities, which underpin solutions we offer to our customers across all of our served markets.

u Climate, Energy and Environment – We believe that we are trusted by government agencies with substantial environmental and sustainability driven-missions.

We strive to ensure that our reputation across climate science, environmental management and operations, nuclear security, infrastructure management, mission support and IT modernization provides the applicable expertise needed to transform operations while modernizing aging infrastructure and maintaining environmental stewardship.

We support the critical missions of the Department of Energy (“DoE”), National Nuclear Security Administration, and National Science Foundation.

At the DoE Hanford site, we provide site-wide infrastructure management and operation, including oversight of land and logistics, public works, information technology, fleet transportation, environmental sustainability, and compliance, first responder services and future project planning.

At the National Energy Technology Laboratory, we actively conduct and support fundamental and applied research efforts, including providing product and logistical support comprising strategic business development, technology transfer and agreements and education and outreach support for the effective and efficient execution of research programs.

u Transportation Solutions – Leidos is a trusted systems developer, service provider and integrator for air navigation service providers around the world, including the FAA.

We provide air traffic control systems that help manage the world’s most complex airspace.

We also deliver crucial automation and capability development services to customers responsible for ensuring the safety and efficiency of air travel.

u Health Mission Software – Leidos employs holistic-systems used for fielding applied technology solutions across the entire continuum of healthcare.

We deliver a single, common electronic health record to both DoW and VA hospitals and treatment facilities worldwide.

Our offerings range from integrating software for the electronic healthcare record vendor and dental record vendors to integrating picture archiving and communications software and more.

u Energy and Environment – We support the critical missions of the Department of Energy (“DoE”), National Nuclear Security Administration, and National Science Foundation, providing infrastructure management and operation, logistical operations, information technology support, applied research efforts, as well as education and outreach support.

u Life Sciences Research & Development – We provide life science research and development support to the NIH, Center for Disease Control, Army Medical Research community and commercial biotech companies.

Most notably, on behalf of the U.S.

government and the public trust, we operate the Frederick National Laboratory for Cancer Research, where we employ thousands of scientists, technicians, administrators and support staff.

Our professionals operate a wide range of leading-edge research and development laboratories in the areas of genetics and genomics, proteins and proteomics, advanced biomedical computing and information technology, biopharmaceutical development and manufacturing, nanotechnology characterization and clinical trials management.

From the biomedical sciences to implementing and optimizing electronic health records and enabling providers to perform care coordination and population health management, Leidos is pioneering the use of the depth and breadth of systems integration principles, processes and technologies to transform the health industry’s evolution towards better quality and more efficient and effective care.

Health & Civil represented 30% for both fiscal 2025 and 2024 and 27% of total revenues for fiscal 2023.

COMMERCIAL & INTERNATIONAL

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Customs & Border Protection ("CBP"), as well as airports and ports and borders authorities.

We offer a broad range of capabilities, including design and engineering services, security products and solutions, digital modernization, mission software, logistics, and airborne solutions.

Commercial & International represented 14% of total revenues for both fiscal 2024 and 2023, and 13% of total revenues for fiscal 2022.

u Energy Infrastructure – Leidos partners with utilities seeking reliable energy modernization solutions, demonstrated by our strong relationships and collaboration with over 75 investor-owned utilities.

u Energy Infrastructure – Leidos partners with utilities seeking reliable energy modernization solutions.

Our project portfolio spans large-scale energy initiatives across the United States, serving electric utilities, generation owners, and industrial clients.

We support utilities and industrial customers in modernizing power delivery systems for enhanced reliability, implementing energy management strategies, advancing vehicle electrification, transforming digital infrastructure, and optimizing operational efficiency to meet evolving energy demands and market expectations.

Our expertise spans power grid engineering and design, grid modernization, utility planning and consulting, energy management and efficiency, technical and financial consulting, and technology-driven innovation, including software and application development.

Our expertise spans power grid engineering and design, grid modernization, utility planning and consulting, energy management and efficiency, and technology-driven innovation, including software and application development.

u Global Security Products and Services – Leidos is a global leader in fully integrated security detection solutions, enhancing the safety of screening and checkpoints for aviation, ports, borders, and critical infrastructure worldwide.

With over 30,000 products deployed across more than 120 countries, including people scanners, computed tomography carry-on baggage scanners, checked baggage scanners, and explosive trace detectors.

We are also the primary supplier to CBP and other

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With over 30,000 products deployed across more than 120 countries, we lead the aviation screening equipment sector, including people scanners, computed tomography carry-on baggage scanners, checked baggage scanners, and explosive trace detectors.

Leidos is also the primary supplier of mobile, non-intrusive inspection systems to CBP and other international customers.

Our Ports & Borders solutions secure the flow of travel and trade by effectively detecting and mitigating threats across cargo, vehicles, and individuals.

Our digital solution features a secure and scalable open-architecture platform that transforms airport security by integrating disparate devices and technologies into a unified management system.

This holistic approach provides real-time data and automated controls, improving throughput and operational efficiency.

international customers of mobile, non-intrusive ports and borders inspection systems that secure the flow of travel and trade by effectively detecting and mitigating threats across cargo, vehicles, and individuals.

Our digital solutions feature a secure and scalable open-architecture platform that transforms airport security by integrating disparate devices and technologies into a unified management system.

u International – Leidos delivers a wide range of mission-focused services across multiple domains to address critical threats and provide innovative solutions to government agencies in the UK and Australia.

Our core areas of expertise include Digital Modernization, Mission Software, Logistics, and Airborne Solutions.

In the UK, we are a trusted partner of the Ministry of Defense, delivering logistics and transformation solutions, developing advanced biometric and smart border protection systems to enhance national security, and leading IT service management and transformation programs.

In Australia, we provide secure, resilient, and innovative technology solutions that support the Defense sector’s modern warfighting capabilities.

We also conduct aerial border surveillance and search-and-rescue operations, covering Australia’s exclusive economic zone and search-and-rescue region.

Commercial & International represented 13% of total revenues for fiscal 2025, and 14% of total revenues for both fiscal 2024 and 2023.

DEFENSE SYSTEMS

Defense Systems addresses threats facing our nation by rapidly prototyping and delivering advanced hardware, software, and integrated systems solutions for the U.S.

Department of Defense, Army, Navy, Air Force, Space Force, Marine Corps, United States Special Operations Command, NASA, Defense Advanced Research Projects Agency, intelligence agencies, and international customers.

We are heavily engaged in the top defense Research Development Test and Evaluation priorities that are driven by critical evolving threat-driven needs.

Defense Systems provides services in the air, land, sea, space and cyberspace environments.

The Defense Systems business is dedicated to delivering cost-effective solutions in the space, airborne, land, maritime and cyber domains and supporting critical missions worldwide.

Defense Systems represented 12% of total revenues for both fiscal 2024 and 2023, and 13% of total revenues for fiscal 2022.

u Airborne Systems – Leidos develops and integrates mission-enhancing airborne solutions, equipping government and Leidos-owned fixed-wing, rotary-wing, and unmanned aircraft with advanced sensors and processing systems.

We execute airborne training, intelligence, surveillance, and reconnaissance missions as a service for the DoD, the U.S.

Defense Systems 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.

u Maritime Systems – On and under the sea, we offer a wide range of innovative capabilities.

We continue to enhance our surface and subsurface autonomous and unmanned technologies to make maritime operations safer and more efficient.

We provide innovative platforms, software solutions for vessel control and common core autonomous behaviors, enhanced sensor systems, advanced signal processing, secure communications hardware and software to fully support these vital missions.

Our naval architecture and marine engineering services span an entire ship’s lifetime, from early-stage concept designs through service life extensions.

u Aerospace Systems – We provide expertise in the design, manufacturing, and integration of space-based electro-optic infrared systems, multi/hyperspectral, electronic warfare and signals intelligence, and communications payloads.

We also manufacture structures and thermal protection systems for hypersonic boost-glide missiles, and we provide testing services for hypersonic vehicles.

u Land Systems – We develop Integrated Air and Missile Defense systems, including the US Army Enduring Indirect Fire Protection Capability, Army Long Range Persistent Surveillance radar capability and AirShield systems.

We design and manufacture other persistent surveillance radar systems, advanced sensors, and radio frequency seekers, including the associated advanced algorithms that accompany them.

We use this expertise to provide military sensor and electronic system R&D services for our customers.

u Airborne Systems – Leidos develops and integrates mission-enhancing airborne solutions.

We execute airborne training, intelligence, surveillance, and reconnaissance missions as a service for the DoW, the U.S.

Intelligence Community, and military services worldwide.

Our key served markets include aircraft integration and operations, sensor and autonomous systems, and Multi-Domain Operation enablers, addressing diverse missions such as target identification, border security, and counter-narcotics operations.

We design and integrate open-architecture sensing systems powered by advanced sensors, algorithms, and processing capabilities to meet complex mission requirements.

Beyond integration, we deliver high-end solutions and services globally, providing intelligence analysis, operational support, and logistics.

Leidos airborne also designs and manufactures low-cost, high-impact airborne effectors, including guided munitions (e.g.

GBU-69), cruise missiles (e.g.

Black Arrow), and components for air-to-air and air-to-ground missions.

In the realm of autonomous systems, we develop innovative software and hardware solutions for unmanned aerial systems and autonomous platforms.

Our unique autonomy algorithms enhance system capabilities, decision-making, alleviate the burden on warfighters, and enable seamless coordination between manned and autonomous platforms, ensuring mission success in dynamic environments.

u Land Systems – We develop Integrated Air and Missile Defense systems, including the US Army Enduring Indirect Fire Protection Capability and AirShield systems.

Enduring Shield is a ground-based, mobile system that defends against cruise missiles and unmanned aircraft systems.

The system protects and defends critical civilian and military infrastructure, bridging the gap between tactical short range air defense and strategic systems.

We are delivering systems for Initial Operational Test & Evaluation, and we are under contract to deliver systems in support of Guam Defense.

AirShield delivers robust air defense while on the move, providing capabilities among the most advanced in the industry.

The system employs advanced threat assessment along with kinetic and non-kinetic effectors that is designed to provide air defense against unmanned aerial vehicles, particularly in dynamic operational environments.

We design and manufacture persistent surveillance radar systems, advanced sensors, and radio frequency seekers, including the associated advanced algorithms that accompany them.

We use this expertise to provide military sensor and electronic system R&D services for our customers.

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u Maritime Systems – On and under the sea, we offer a wide range of capabilities.

We continue to enhance our surface and subsurface autonomous and unmanned technologies to help make maritime operations safer and more efficient for government and industry by providing innovative platforms, software solutions for vessel control and autonomous behaviors, leading sensor systems, signal processing, communications hardware and software to support these vital missions.

We are a market leader in submarine data collection technologies and anti-submarine warfare system installation and maintenance and are expanding our capabilities in these areas to meet market demand for this growing threat.

We also provide prototyping and research and development support services to a wide variety of DoD customers from concept analysis to classified manufacturing.

Our naval architecture services span the entire ship’s lifetime, from early-stage concept designs through detailed design, shipyard construction support, full lifecycle and sustainment support, ship alterations, service life extensions, and disposal.

Our marine engineering involves a wide range of activities, beginning with concept and feasibility design and continues through land-based test sites, cyber and shock hardening of key components, detailed design, construction support, life-cycle support and into ship-alt design for service-life extensions.

u Aerospace Systems – We provide expertise in the design, manufacturing, and integration of space-based electro-optic infrared system, multi/hyperspectral, electronic warfare and signals intelligence, and communications payloads.

In space we provide sensor, algorithm development and integrated payload capabilities to identify and track threats and cue defensive systems.

We have developed and delivered full integrated small satellite systems and are under contract for payload deliveries on the Space Development Agency Wide Field of View Tranches 0, 1, and 2 programs.

We manufacture structures and thermal protection systems for hypersonic boost-glide missiles, and we provide testing services for hypersonic vehicles.

u Cyber and Threat Systems - We offer reverse engineering, classified manufacturing and design, and threat exploitation services to a wide breadth of U.S.

Intelligence Community customers.

We model, simulate, and analyze cyber and electro-magnetic threats, develop threat emulators for range testing, and develop cyber-physical solutions.

Defense Systems represented 13% of total revenues for fiscal 2025, and 12% of total revenues for both fiscal 2024 and 2023.

Corporate includes the operations of various corporate activities, certain expense items that are not reimbursed by our U.S.

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ACQUISITIONS AND DIVESTITURES

During fiscal 2022, we completed the acquisition of Cobham Aviation Services Australia’s Special Mission business.

During fiscal 2025, we completed the acquisition of Savanna Industries, Inc.

("Kudu Dynamics").

See “Note 5—Acquisitions and Divestitures” in Part II of this Annual Report on Form 10-K for further information.

During fiscal 2023, we completed an immaterial disposition of a business within our Defense Solutions segment.

During fiscal 2022, we completed the disposition of Aviation & Missile Solutions LLC within our Defense Solutions segment.

During fiscal 2025, we completed an immaterial disposition of a business within our Commercial & International segment.

Additionally, during fiscal 2023, we completed an immaterial disposition of a business within our Defense Systems segment.

For further information, see “Note 5—Acquisitions and Divestitures” in Part II of this Annual Report on Form 10-K.

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KEY CUSTOMERS

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Our consolidated revenues are largely attributable to prime contracts or to subcontracts with other contractors engaged in work for the U.S.

government, with the remaining attributable to international customers, including the UK Ministry of Defence and Australian Department of Defence, and customers across a variety of commercial markets.

government, with the remaining attributable to international customers, including the UK Ministry of Defence, the Australian Department of Defence, NATO and customers across a variety of commercial markets.

Within the U.S.

government, our revenues are diversified across many agencies, including various intelligence agencies, the U.S.

Army, Navy and Air Force, U.S Space Force, DHS, Defense Information Security Agency, FAA, Transportation Security Administration, CBP, Defense Health Agency, VA, Department of Health and Human Services, NASA, National Science Foundation, DoE, the Environmental Protection Agency and research agencies such as Defense Advanced Research Projects Agency.

Army, Navy and Air Force, U.S.

Space Force, DHS, Defense Information Systems Agency, FAA, Transportation Security Administration, CBP, Defense Health Agency, VA, Department of Health and Human Services, National Science Foundation, DoE, the Environmental Protection Agency and research agencies such as Defense Advanced Research Projects Agency and the Intelligence Advanced Research Projects Agency.

These customers have a number of subsidiary agencies that have separate budgets and procurement functions.

Our contracts may be with the highest level of these agencies or with the subsidiary agencies of these customers.

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HUMAN CAPITAL

EMPLOYEE AND WORKFORCE DEMOGRAPHICS

As of January 2, 2026, we employed approximately 47,000 full and part-time employees of whom approximately 41,900 are located in the United States and the remainder of which are located in approximately 45 countries worldwide.

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security clearances and approximately 19% of our employees are military veterans.

As of January 3, 2025, our workforce consisted of the following:

Gender of global employees (1)

(1) Based on employees who self-identify.

Age of global employees

Less than 30 years 15 %

30-50 years 48 %

Greater than 50 years 37 %

Ethnicity of U.S.

employees (1)

Asian/Indian 10 %

Hispanic/Latino 10 %

Undisclosed 3 %

(1) Based on employees who self-identify.

CULTURE AND CORPORATE VALUES

CULTURE AND WORKFORCE

Leidos has adopted six values that help define its culture:

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These values provide a roadmap for our workplace behavior and help guide our business decisions.

They are a key component of our corporate culture and are part of our employees’ annual performance assessments.

They are a key component of our corporate culture and are part of our employees’ performance assessments.

Our values are based on our commitment to do the right thing for our customers, our employees and our communities.

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Our policies, procedures, training and communications form a comprehensive program that promotes a culture of integrity as a foundation for employee conduct.

For the seventh consecutive year, the Ethisphere Institute named Leidos one of the World’s Most Ethical Companies in 2024.

For the eighth consecutive year, the Ethisphere Institute named Leidos one of the World’s Most Ethical Companies in 2025.

Our approach to workplace culture and employee development focuses on education and best practices for leaders and employees.

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Company councils continue to champion and integrate Leidos values across the enterprise and are comprised of employees across our business areas and functions with oversight and guidance from executive leadership.

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We continue to invest in our employees through the continuous improvement of our Total Rewards plans and programs.

Our Total Rewards philosophy is built on providing competitive, market-based compensation;

comprehensive and flexible benefits;

and programs that support employees’ overall well-being, financial security, and career growth.

These offerings are designed to attract, retain, and motivate a highly skilled workforce.

TALENT ACQUISITION PRACTICES

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Our college campus outreach engages talent from multiple university sources.

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CAREER MOBILITY AND GROWTH

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Leidos empowers and challenges employees to continuously seek, share and apply new knowledge, skills and behaviors.

We recognize the value of a high-performing workforce where every member of the team has an opportunity to feel motivated, valued and fulfilled, and have a purposeful and long career at Leidos.

We provide resources, development, and experiential learning to enable employees to grow, including a talent marketplace where employees can fill temporary roles to develop skills or provide additional assistance.

We recognize the value of a high-performing workforce where every member of the team has an opportunity to feel motivated, valued and fulfilled, resulting in a purposeful and long career at Leidos.

We provide leaders with the knowledge, skills and resources needed to coach employees and enable employees’ career development.

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Our Internal Mobility Program has a dedicated team that proactively focuses on the mobilization of our employees.

We teach employees how to use the tools and resources available to them and help them gain visibility across the enterprise.

We assist managers and recruiters in identifying internal candidates for their programs.

We teach employees how to use the tools and resources available to them and help them gain visibility to hiring managers and recruiters across the enterprise.

We have career advisors that meet one-on-one with employees in key talent segments to provide career coaching and mobility counseling.

We conduct formal employee engagement surveys to listen to employees and develop customized strategies to drive engagement, inclusion and retention across the organization.

We invest in our current and future leaders in several ways.

We provide a variety of leadership development programs, targeted for each level of leader, and numerous resources for leader development.

We provide a variety of leadership development offerings, comprised of formal training programs, live leader labs and self-paced e-learning.

Annually, we host a two-day Leadership Summit for approximately 350 of our most senior leaders to align our growth strategy and transformation initiatives.

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We are a leader in the field of occupational health and safety (“OH&S”) and place a strong emphasis on these activities, both internally and on behalf of our customers.

Internally, we emphasize direct management responsibility, corporate policies and procedures, OH&S program implementation, employee training and compliance assessments.

Internally, we emphasize direct management responsibility, comprehensive corporate policies and procedures, OH&S program implementation, employee training and compliance assessments.

Our corporate policies and procedures support compliance with OH&S regulations at work locations.

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Company-funded research and development expenses are included in selling, general and administrative expenses.

Our company-funded research and development expense was $150 million, $128 million and $116 million for fiscal 2024, 2023 and 2022, respectively, which as a percentage of consolidated revenues was 0.9% for fiscal 2024 and 0.8% for both fiscal 2023 and 2022.

Our company-funded research and development expense was $187 million, $150 million and $128 million for fiscal 2025, 2024 and 2023, respectively, which as a percentage of consolidated revenues was 1.1%, 0.9% and 0.8% for fiscal 2025, 2024 and 2023, respectively.

We charge expenses for research and development activities performed under customer contracts directly to those contracts.

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In connection with the performance of services and solutions, the U.S.

government has certain rights to inventions, data, software codes and related material that we develop under U.S.

government has certain rights to inventions, data, software code and related material that we develop under U.S.

government-funded contracts and subcontracts.

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Our principal competitors currently include the following companies:

Accenture Federal Systems, Amentum Services Inc., BAE Systems, Booz Allen Hamilton Inc., CACI International Inc., Deloitte, General Dynamics Corporation, GovCIO, IBM, KBR Inc., L3Harris, Lockheed Martin Corporation, ManTech, Northrop Grumman Corporation, Optum, Parsons Corp, Peraton, Raytheon Technologies Corporation and SAIC.

Accenture Federal Services LLC, Amentum Services Inc., KBR, Inc., BAE Systems, Booz Allen Hamilton Inc., CACI International Inc., Deloitte, General Dynamics Corporation, GovCIO, IBM, KBR Inc., L3Harris Technologies, Inc., Lockheed Martin Corporation, ManTech, Northrop Grumman Corporation, Optum, Parsons Corporation, Peraton Inc., RTX Corporation and SAIC.

These companies span across sectors that include systems development and integration, engineering and technical services divisions of large defense contractors, diversified U.S.

and international IT providers and contractors focused solely on technical services, supply chain management, other logistics services and major systems operations and maintenance, homeland security and health solutions.

We compete on various factors, including our technical expertise and qualified professional and/or security-cleared personnel, our ability to deliver innovative high value solutions in a timely manner, successful program execution, our understanding of our customers’ missions, the size and scale of our company and past performance credentials.

We compete domestically and internationally against products and services of the companies listed above, numerous smaller competitors and startups, and increasingly, non-traditional and non-U.S.

defense contractors.

Technological advances, including artificial intelligence, autonomy and robotics, changing customer requirements, as well as the ongoing significant reform of the Federal Acquisition Regulation ("FAR") are enabling expanded competition from both traditional and non-traditional competitors.

We compete by offering strong technical expertise, mission understanding, and retaining qualified staff, including those with security clearances.

We focus on fair pricing and program execution.

Our competitive edge also comes from our proven track record, strong cybersecurity and compliance, reliable supply chain, effective data management, and our ability to use commercial technologies and AI integration at scale.

Leidos Holdings, Inc.

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Agencies are explicitly authorized by Congress for specific uses, limitations or restrictions in the use of OTAs.

In the case of DoD, the department is authorized to use OTAs to carry out basic, applied or advanced research projects, prototype development projects or follow-on production to initial prototype projects.

In the case of DoW, the department is authorized to use OTAs to carry out basic, applied or advanced research projects, prototype development projects or follow-on production to initial prototype projects.

OTA agreements are generally exempt from federal procurement regulations.

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We provide services and products to numerous U.S.

government agencies and entities, including to the DoD, the U.S.

government agencies and entities, including to the DoW, the U.S.

Intelligence Community and the DHS.

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Some significant laws and regulations that affect us include:

u the Federal Acquisition Regulation (“FAR”) and supplements, including the DoD Federal Acquisition Regulation Supplement (“DFARS”), which regulate the formation, administration and performance of U.S.

u the FAR and supplements, including the DoW Federal Acquisition Regulation Supplement (“DFARS”), which regulate the formation, administration and performance of U.S.

government contracts;

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munitions list;

These regulations impose a broad range of requirements, many of which are unique to government contracting, including various procurement, import and export, security, contract pricing and cost, contract termination and adjustment and audit requirements.

u the DoW Cybersecurity Maturity Model Certification ("CMMC"), which is phasing-in between November 2025 and November 2028 and requires us to meet or exceed certain specified cybersecurity standards to be eligible for new contract awards with the DoW;

u the recent executive order titled "Prioritizing the Warfighter in Defense Contracting,"

Among other things, these laws and regulations:

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government agencies of compliance with government requirements for a contractor’s business systems;

u require compliance with federal agency- specific cybersecurity standards in agency acquisition supplements such as DFARS;

u restrict the use and dissemination of and require the protection of unclassified contract-related information and information classified for national security purposes and the export of certain products and technical data;

u require us not to compete for work if an actual or potential organizational conflict of interest, as defined by these laws and regulations, related to such work exists and/or cannot be appropriately mitigated, neutralized or avoided.

government may revise its procurement practices or adopt new contract rules and regulations at any time.

In order to help ensure compliance with these complex laws and regulations, all of our employees are required to complete ethics and other compliance trainings relevant to their position.

Leidos Holdings, Inc.

Annual Report

DATA PRIVACY AND SECURITY LAWS

u restrict the conduct of stock buybacks or issuance of dividends during the continuation of any period in which the Secretary of War determines that we are underperforming on our government contracts or have insufficient prioritization, investment, or production speed;

u require that future government contracts (including renewals) restrict executive incentive compensation in a manner that is contingent on certain specified criteria, including on-time delivery of projects, increased production, and the facilitation of certain domestic investments and operating improvements.

government may revise its procurement practices or adopt new contract rules and regulations at any time.

In particular, pursuant to Executive Order 14275, “Restoring Common Sense to Federal Procurement,” issued on April 15, 2025, the U.S.

government is undertaking the first-ever comprehensive overhaul of the FAR which is expected to return the FAR to its statutory roots, rewrite it in plain language, and remove most non-statutory rules.

In order to help ensure compliance with these complex laws and regulations, all of our employees are required to complete ethics and other compliance trainings relevant to their position.

DATA PRIVACY, CYBERSECURITY AND ARTIFICIAL INTELLIGENCE LAWS

Some of our operations and service offerings involve access to and use by us of personal information and/or protected health information.

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u the Health Insurance Portability and Accountability Act, as amended by the Health Information Technology for Economic and Clinical Health Act, which establishes privacy and security compliance obligations with respect to the processing of protected health information by covered entities and business associates, necessitating investment in technical and organizational compliance measures and creates the potential for substantial fines for noncompliance;

u federal data privacy laws pursuant to contract, such as the Privacy Act, when applicable.

Moreover, regulation of artificial intelligence, including generative artificial intelligence, machine learning, and similar data-driven technologies (collectively, “AI”) is rapidly evolving and legislators and regulators worldwide are increasingly focused on these powerful emerging technologies.

The technologies underlying AI and its uses are subject to a variety of laws and regulations, including intellectual property, data privacy (including automated decision making), cybersecurity, consumer protection, competition and equal opportunity laws and regulations, and are expected to be subject to additional regulation, new legal frameworks or new application of existing frameworks.

In particular, several states, including Colorado and California, have passed or proposed laws and regulations that specifically address various facets and uses of AI.

In Europe, the EU’s Artificial Intelligence Act (the “AI Act”), which began phasing-in in 2025, establishes, among other things, a risk-based governance framework for regulating AI systems operating in the EU.

These regulations and related risks are described in more detail below under “Risk Factors” in this Annual Report on Form 10-K.

Leidos Holdings, Inc.

Annual Report

COMPANY WEBSITE AND INFORMATION

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business