Leidos Misses Quarterly Revenue Estimates Due to Government Shutdown

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Defense contractor Leidos Holdings reported fourth-quarter revenue below Wall Street estimates, as the six-week long U.S. government shutdown last year weighed on the firm's orders. The shutdown severely disrupted government operations and impacted contractors like Leidos, which provides IT, weapons and other services to federal agencies.

Why it matters

The government shutdown had a significant impact on defense contractors like Leidos, highlighting the vulnerability of these firms to disruptions in federal spending and operations. This could raise concerns about the stability and reliability of government contracts for these companies.

The details

Leidos' revenue during the fourth quarter came in at $4.21 billion, down 3.6% from last year, and lower than analysts' estimates of $4.31 billion. Results also took a hit from a 9.3% drop in sales in its health and civil segment, which provides electronic health record systems to the Department of Defense and Veteran Affairs hospitals. However, on an adjusted basis, the company's fourth-quarter profit per share of $2.76 beat expectations of $2.61, helped by a 160-basis point expansion in its adjusted core profit margin and increased cost controls.

• The six-week long U.S. government shutdown ended in November 2025.
• Leidos reported its fourth-quarter 2025 results on February 17, 2026.