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Entrust Solutions acquisition contributes $142 million to Leidos' third-quarter revenue

Leidos' revenue rose 4%, with 0.6% organic growth, while Homeland expanded and higher-margin Health contracted. A new joint venture figures in revised full-year guidance.

Leidos' acquisition of ENTRUST Solutions supplied $142 million of revenue in the fiscal third quarter, which ended Oct. 2, 2026. Total revenue rose 4% to $4.63 billion.1

Entrust Solutions adds $142 million to Leidos' third-quarter revenue

Fiscal third quarter 2026, ended October 2. Growth rates compare with the prior-year quarter.

$142 millionQuarterly revenue from the ENTRUST Solutions acquisition, included in total revenue
$4.63 billionTotal quarterly revenue, up 4%
0.6%Organic revenue growth

Leidos' organic revenue measure excludes acquisitions within the last 12 months and divestitures within the current and year-ago periods.

Source: Leidos third-quarter 2026 results release, SEC Exhibit 99.1. As of November 3, 2026.

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Organic revenue grew 0.6%. Leidos' organic measure excludes revenue from acquisitions within the last 12 months and divestitures within the current and year-ago periods.1

Homeland, which includes Entrust Solutions, grew revenue 32%, or 14.8% organically. Leidos attributed growth to demand for air traffic management and electric power distribution engineering solutions, alongside the acquisition.1

Also announced

On Oct. 5, 2026, Leidos closed a transaction contributing its Security Enterprise Solutions and Industrial Automation businesses to a newly formed joint venture with Altaris. Leidos lowered fiscal 2026 revenue guidance to $18.00 billion–$18.20 billion. Its prior revenue guidance for that fiscal year was $18.20 billion–$18.40 billion.1

The revised guidance adjusts for the joint venture and reflects year-to-date performance and the current outlook; the guidance section does not quantify the venture's share of the revenue reduction. The company raised fiscal 2026 non-GAAP diluted earnings per share guidance to $12.50–$12.70. It also raised operating cash flow guidance for that fiscal year to approximately $1.90 billion.1

Health revenue fell 12%, with Leidos attributing the declines in revenue and margins to expected program shifts and reduced volumes on managed health services programs. Its operating margin narrowed to 22.5% from 26.8% a year earlier. Health's operating margin remained above Homeland's 7.9%, putting the revenue expansion in the lower-margin segment of this pair.1

Sources (1)
  1. Leidos Exhibit 99.1, third-quarter 2026 results release (SEC) www.sec.gov
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Leidos · Q3 2026: earnings and company materials ↗

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M&A

Leidos trades control of its security screening business for a 41.5% Analogic stake

Altaris affiliates hold 58.5% of the Analogic joint venture and appoint a majority of its board. Certain Leidos liquidity demand exit rights begin only after seven years.

· Updated

Leidos on Oct. 5 closed the combination of its Security Enterprise Solutions (SES) and Industrial Automation businesses with Analogic, a portfolio company of investment firm Altaris1. The venture operates under the Analogic brand and focuses on security screening at airports, borders and critical infrastructure2. Leidos contributed its businesses in exchange for 41.5% of the venture's equity. Altaris affiliates put in part of Analogic's parent for 58.5% and sold the rest of that parent to the venture for cash the venture obtained from new debt financing1.

Altaris controls the Analogic venture; Leidos holds a 41.5% minority stake

Equity in the Analogic security screening joint venture at closing, Oct. 5, 2026, %

100% of joint venture equity

  • 58.5% Altaris affiliates
  • 41.5% Leidos

Altaris affiliates appoint a majority of the board. Certain Leidos liquidity demand exit rights start only after seven years, subject to limits.

Source: Leidos Form 8-K, Oct. 5, 2026; Leidos Form 10-Q for the quarter ended July 3, 2026. Data as of Oct. 5, 2026.

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Altaris holds the controlling interest; Leidos's 41.5% is non-controlling1, 4. Leidos's say now runs through the minority of board seats it initially designates and customary minority protective rights over certain material proposed actions. The exit terms include Altaris's drag-along rights and Leidos's tag-along rights1. Certain Leidos liquidity demand exit rights start only after the seventh anniversary of closing. All of these terms are subject to timing, procedural and other limits in the joint venture agreement1.

By revenue, the contributed business is a small piece of Leidos. In its April announcement of the deal, Leidos said it would contribute about 1,500 employees representing $625 million in projected 2026 revenue3. That revenue is about 3.6% of the $17.2 billion Leidos reported for its last fiscal year2. The 10-Q says the divestiture is not a material strategic shift, so the business will not be presented as a discontinued operation4. Chief Executive Officer Tom Bell said the launch "sharpens our focus on the growth engines driving our NorthStar 2030 strategy"2.

Before any exit, cash from the stake depends on an Altaris-majority board, which decides when the venture distributes its available cash, at least once a year1. Leidos's first financial statements covering a period that includes Oct. 5 will show the business deconsolidated and the 41.5% carried as an equity method investment1, 4.

Clarification, October 7, 2026: The headline changed from “Leidos combines Security Enterprise Solutions with Altaris's Analogic, keeping a 41.5% minority stake” to “Leidos trades control of its security screening business for a 41.5% Analogic stake”. The summary now reads: “Altaris affiliates hold 58.5% of the Analogic joint venture and appoint a majority of its board. Certain Leidos liquidity demand exit rights begin only after seven years.” Revision notice clarified October 11, 2026.

Sources (4)
  1. Leidos Holdings, Form 8-K, Oct. 5, 2026 www.sec.gov
  2. Leidos press release, Exhibit 99.1, Oct. 5, 2026 www.sec.gov
  3. Leidos press release, Exhibit 99.1, April 15, 2026 www.sec.gov
  4. Leidos Holdings, Form 10-Q for the quarter ended July 3, 2026 www.sec.gov
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Industry · Unmanned maritime

DefenseScoop: Navy deploys unmanned surface vessel with carrier strike group

DefenseScoop reports acting Navy Secretary Hung Cao said the Theodore Roosevelt group deployed Oct. 8 with the vessel. Its model remains unclear.

· Updated

The Theodore Roosevelt Carrier Strike Group deployed Oct. 8 with an unmanned surface vessel, acting Navy Secretary Hung Cao said, DefenseScoop reports. Speaking at an AUSA conference panel, Cao described the vessel as both medium-sized and large-size. He called the Theodore Roosevelt group the first carrier strike group to deploy with a large-size unmanned surface vessel.1

DefenseScoop: Navy deploys unmanned surface vessel with carrier strike group

Theodore Roosevelt Carrier Strike Group, per acting Navy Secretary Hung Cao

October 8Deployment with an unmanned surface vessel, Cao said

Cao did not identify the vessel type. Navy spokespersons did not clarify the model to DefenseScoop.

Reported by DefenseScoop, October 16, 2026. As of October 16, 2026.

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Leidos manufactured Sea Hunter and Seahawk, original medium unmanned surface vessel prototypes delivered for real-world surface fleet missions this year, DefenseScoop reports. Cao did not identify the deployed vessel type, and Navy spokespersons did not clarify the model when DefenseScoop asked. Asked whether either prototype was deploying with the group, an unnamed Leidos source referred DefenseScoop to the Navy, which now owns the vessels.1

Clarification, November 4, 2026: DefenseScoop revised its article after we published. The brief is unchanged.

Sources (1)
  1. DefenseScoop: US Navy deploys unmanned maritime drone to support carrier strike group in historic first defensescoop.com
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