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Kratos Defense & Security Solutions

KTOS Q4 2025 Earnings

Reported Feb 23, 2026 at 4:45 PM ET · SEC Source

Q4 25 EPS

$0.18

BEAT +34.63%

Est. $0.13

Q4 25 Revenue

$345.1M

BEAT +2.15%

Est. $337.8M

vs S&P Since Q4 25

-37.0%

TRAILING MARKET

KTOS -32.2% vs S&P +4.8%

Full Year 2025 Results

FY 25 EPS

$0.55

FY 25 Revenue

$1.35B

Market Reaction

Did KTOS Beat Earnings? Q4 2025 Results

Kratos Defense & Security Solutions capped fiscal 2025 with a standout fourth quarter, posting adjusted EPS of $0.18 against a consensus estimate of $0.13, a 34.63% beat, while revenue of $345.10 million came in 2.15% ahead of expectations and grew 1… Read more Kratos Defense & Security Solutions capped fiscal 2025 with a standout fourth quarter, posting adjusted EPS of $0.18 against a consensus estimate of $0.13, a 34.63% beat, while revenue of $345.10 million came in 2.15% ahead of expectations and grew 14.0% year-over-year. The driving force behind the outperformance was exceptional organic momentum: the Kratos Government Solutions segment delivered 22.2% organic growth, powered by a 47.4% surge in Defense Rocket Systems and a 32.4% jump in Microwave Products, as demand for hypersonic and advanced defense systems accelerated. A record consolidated backlog of $1.57 billion and a 1.3x book-to-bill ratio underscore the durability of that demand, a backdrop that has made defense contractors worth watching in this spending environment. Looking ahead, Kratos guided fiscal 2026 revenue to $1.60 billion–$1.68 billion with Adjusted EBITDA of $157.00 million–$167.00 million, projecting 15%–20% organic growth and continued margin expansion even as heavy Valkyrie pre-production investment keeps near-term free cash flow negative.

Key Takeaways

  • • 20.0% Q4 organic revenue growth driven by strong demand across both segments
  • • Defense Rocket Systems business grew 47.4% organically in Q4
  • • Microwave Products business grew 32.4% organically in Q4
  • • Space, Training and Cyber businesses grew 22.7% organically in Q4
  • • Valkyrie-related activity drove Unmanned Systems growth
  • • 1.3x book-to-bill ratio in Q4 with $438.3 million in bookings
  • • Record consolidated backlog of $1.573 billion

KTOS Forward Guidance & Outlook

Kratos provided fiscal 2026 base case guidance of revenues of $1.595 billion to $1.675 billion and Adjusted EBITDA of $157.0 million to $167.0 million (9.9%-10.0% of revenue), including the recently closed Nomad Global Communication Solutions acquisition. Q1 FY2026 is expected to be the lowest quarter for both revenue ($335M-$345M) and Adjusted EBITDA ($25M-$30M), primarily due to lingering effects of the extended U.S. Federal Government shutdown. The company expects revenue and EBITDA to accelerate through the year, with the second half significantly exceeding the first half. Full-year FY2026 operating cash flow is guided at $50M-$60M, with capital expenditures of $135M-$145M, resulting in free cash flow use of ($85M)-($95M). The company continues to expect FY2026 organic revenue growth of approximately 15%-20% over FY2025, and FY2027 organic revenue growth of approximately 18%-23% over FY2026, with Adjusted EBITDA margin expansion of approximately 100 basis points per year. These forecasts do not include large-scale Valkyrie production or the pending Orbit Technologies Ltd acquisition.

24/7 Wall St

KTOS YoY Financials

Q4 2025 vs Q4 2024, source: SEC Filings

24/7 Wall St

KTOS Revenue by Segment

With YoY comparisons, source: SEC Filings

Q1 25 Q4 25

“We finished 2025 exceeding our financial objectives for the fourth quarter, generating approximately 20 percent Q4 year-over-year organic Revenue growth, generating a 1.3 to 1.0 book to bill ratio on top of this 20 percent organic growth, having a record backlog of $1.573 billion, and a record opportunity pipeline of $13.7 billion, with the opportunity set for Kratos having never been stronger and continuing to increase. Kratos is positioned to achieve our previously communicated 2026 and 2027 financial targets, and similar to 2025, for 2026 we expect our business to accelerate throughout the year, with increasing Revenue volume and Adjusted EBITDA margins, as several new programs, contracts and initiatives begin, ramp and expand.”

— Eric DeMarco, Q4 2025 Earnings Press Release

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