Leidos (LDOS) Citi's Global Industrial Tech & Mobility Conference 2026 summary

Market environment and strategic positioning

• Dynamic market conditions are creating significant opportunities, especially in federal IT, national security, intelligence, health, and international markets through 2025.

• Record earnings, cash, and profit were achieved despite anticipated headwinds in 2025, with a clear and transparent growth strategy now articulated.

• Five redefined business sectors: digital modernization, defense, homeland, health, and intelligence, each with a dedicated growth pillar.

• Anticipated growth in Department of Defense and intelligence budgets, with defense and intelligence sectors positioned to benefit.

• Homeland and energy sectors are focusing on modernization and resilience, including air traffic and airport infrastructure.

Growth drivers and investment focus

• Defense growth is driven by maritime and space programs, with new franchise opportunities emerging.

• Increased internal R&D investment, rising from 17% to 24% of company-funded R&D, and tripling CapEx to support technology-based solutions.

• Recent acquisitions, such as ENTRUST and Kudu, are being rapidly integrated to enhance capabilities in energy and cyber, with a focus on organic growth and operational efficiency.

• AI is being embedded across all business lines, with OpenAI deployed to most employees and an enterprise transformation office established to drive internal and customer-facing efficiencies.

• The company is leveraging its multifaceted service model to move up the value chain in federal products and IT, differentiating from traditional federal services peers.

Operational transformation and technology adoption

• AI and digital modernization are seen as growth pillars, not threats, with a strategy to use AI for both internal process improvement and customer solutions.

• The enterprise transformation office aims to quickly reengineer business processes, reduce overhead, and shift more employees to customer-facing roles.

• Success metrics include decoupling revenue growth from headcount growth, especially in back office functions, and improving operational efficiency.

• Software development and complex system integration are being enhanced by leveraging AI and automation, aiming to make both internal and customer operations more effective.

• The company is positioning itself as a technology-first partner, ready to help customers adopt and benefit from AI and digital tools.