Leidos to Acquire Entrust for $2.4B After Q4 Revenue Miss and EPS Beat
Leidos posted Q4 revenue of $4.21B, missing estimates by $100M and declining 4% year-over-year due to an extra workweek and six-week shutdown, while adjusted EPS rose 16% to $2.76. It generated record $495M operating cash flow and agreed to acquire Entrust for $2.4B.
1. Q4 Financial Performance
Leidos reported Q4 revenue of $4.21 billion, missing the $4.31 billion consensus estimate and declining 4% year-over-year due to an extra workweek and a six-week government shutdown. The company posted adjusted EPS of $2.76, up 16% year-over-year and above the $2.61 forecast, while adjusted EBITDA rose 9% to $556 million with a 13.2% margin. Net bookings totaled $5.6 billion (1.3 book-to-bill), backlog stood at $49.0 billion (funded $9.7 billion), and operating cash flow reached a record $495 million.
2. Dividend Declaration
On February 13, the board declared a cash dividend of $0.43 per share payable on March 31 to shareholders of record on March 16.
3. Entrust Acquisition
After the quarter, Leidos agreed to acquire energy engineering firm Entrust for $2.4 billion in a stock purchase deal expected to close in the first half of fiscal 2026, subject to customary closing conditions.
4. 2026 Outlook
For fiscal 2026, the company forecasts revenue of $17.50 billion to $17.90 billion versus a $17.89 billion consensus, and adjusted EPS of $12.05 to $12.45 against a $12.29 estimate, guiding to a mid-13% EBITDA margin with growth weighted to the second half of the year.