Kratos Defense & Security Solutions Inc

Latest Results (17.05.2026):

Kratos Defense & Security Solutions Inc reported results for the first quarter of fiscal 2026 (Q1 2026): revenue of $371.0 million (up 22.6% y/y, 15.8% organic), GAAP net income of $11.9 million ($0.07/share), adjusted EBITDA of $38.7 million, and a consolidated book‑to‑bill of 1.6. Management increased FY26 guidance and included the recently closed Nomad and Orbit acquisitions in its outlook.

Top-line and profitability

Q1 2026 revenue: $371.0M (+22.6% vs Q1 2025; +15.8% organic). GAAP net income $11.9M ($0.07/share) vs $4.5M in Q1 2025; adjusted EPS $0.16 vs $0.12. Adjusted EBITDA for the quarter was $38.7M.

Segment performance — Unmanned Systems (KUS)

KUS revenue $82.6M in Q1 2026 (+30.9% organic). Operating income improved to $1.3M (from a $1.7M loss prior year); KUS adjusted EBITDA $5.2M. KUS Q1 bookings $96.2M, book‑to‑bill 1.2, and backlog $375.4M at quarter end.

Segment performance — Kratos Government Solutions (KGS)

KGS revenue $288.4M in Q1 2026 (+20.4% total, +11.8% organic). Operating income $20.4M and adjusted EBITDA $33.5M. KGS Q1 bookings $509.0M, book‑to‑bill 1.8, and backlog $1.635B at quarter end.

Bookings, backlog and pipeline

Consolidated Q1 bookings $605.2M, consolidated book‑to‑bill 1.6 (LTM bookings $1.715B; LTM book‑to‑bill 1.2). Consolidated backlog $2.010B and bid & proposal pipeline $14.3B as of March 29, 2026.

Cash flow, capex and investments

Q1 cash flow used in operations $27.4M and free cash flow used $43.1M (after $19.9M capex and proceeds from asset sales). FY26 guidance calls for heavy investment: capex $155–165M and total forecasted investments of $248–270M (including facilities, Valkyrie production ramp and program investments).

Guidance and outlook

Kratos raised/issued FY26 guidance: revenues $1.700–1.760B and adjusted EBITDA $170–176M (guidance includes Nomad and Orbit). Q2 2026 revenue guidance $400–410M. Management expects materially stronger H2 2026, margin expansion (~100 bps vs 2025) and additional margin improvement expected in FY27.

One‑time / non‑cash items called out

Q1 included $15.0M of non‑cash stock‑based compensation and $10.7M of company‑funded R&D (space, satellite, unmanned and microwave electronic efforts), which management says are supporting near‑ and longer‑term growth.

Acquisitions and strategic notes

Results and guidance reflect the Nomad (closed Feb 11, 2026) and Orbit acquisitions. Management emphasized continued investment to scale hypersonics, Valkyrie production, rocket systems, engines and microwave electronics to address increased DoD demand.