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Kratos Defense Q2 Earnings and Revenues Outpace Estimates
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Key Takeaways
Kratos Defense's Q2 EPS rose 90.9% to 21 cents, beating the consensus estimate by 61.5%.
Revenues climbed 30.5% to $458.8 million, led by Government Solutions and 19.1% organic growth.
Kratos Defense raised 2026 revenue guidance to $1.75-$1.81 billion as backlog reached $2.08 billion.
Kratos Defense & Security Solutions, Inc. (KTOS - Free Report) reported second-quarter 2026 adjusted earnings of 21 cents per share, which beat the Zacks Consensus Estimate of 13 cents by 61.5%. The bottom line also increased 90.9% from the year-ago quarter’s 11 cents.
Kratos Defense reported GAAP earnings of 2 cents per share, which came in line with the year-ago quarter.
KTOS’ Revenue Growth Accelerates
Revenues of $458.8 million beat the consensus estimate of $412 million by 11.4% and increased 30.5% year over year. Kratos Government Solutions led the growth, while total organic revenues advanced 19.1%.
Product sales climbed 33.5% year over year to $289.1 million. Service revenues increased 25.8% to $169.7 million.
Kratos Defense & Security Solutions, Inc. Price, Consensus and EPS Surprise
Selling, general and administrative expenses jumped 35.5% to $73.3 million. Research and development expenses rose 33.3% to $13.6 million.
Amortization of intangible assets increased to $10.1 million from $2.8 million, while depreciation rose to $3.9 million from $3 million.
Kratos recorded an operating loss of $1.6 million against the operating income of $3.7 million a year earlier.
KTOS’ Segmental Performance
Unmanned Systems: Revenues from this segment totaled $79.1 million compared with $73.2 million in the year-ago quarter. The increase was primarily driven by Valkyrie-related activity.
Kratos Government Solutions: Revenues from this segment amounted to $379.7 million compared with $278.3 million in the year-ago quarter. This rise was due to organic revenue growth across its Defense and Rocket Support business, Turbine Technologies and Microwave Products and Space, Training and Cyber businesses, with organic revenue growth rates of 50.2%, 43.3%, 29.5% and 8.7%, respectively, year over year.
Financial Details of KTOS
As of June 28, 2026, cash and cash equivalents totaled $1.44 billion, up from $0.56 billion as of Dec. 28, 2025.
The company reported other current liabilities of $19.9 million as of June 28, 2026 compared with $9 million recorded as of Dec. 28, 2025.
The net cash used in operating activities amounted to $38.4 million during the first six months of 2026 compared with $40.9 million in the same period of 2025.
KTOS’ Backlog Supports Demand Visibility
Consolidated bookings totaled $492.2 million in the second quarter, resulting in a book-to-bill ratio of 1.1. The last-12-month book-to-bill ratio was 1.3, with bookings of $1.99 billion.
Backlog increased to $2.08 billion as of June 28, 2026 from $2.05 billion at the end of the first quarter. Funded backlog was $1.57 billion, while unfunded backlog totaled $512.7 million. The bid and proposal pipeline expanded to $15 billion from $14.3 billion.
Kratos Defense’s Guidance
KTOS projects second-quarter 2026 revenues to be in the range of $460-$480 million. The Zacks Consensus Estimate for revenues is pegged at $460.3 million, which is at the lower end of the company’s guided range.
Kratos raised its full-year 2026 revenue guidance to $1.75-$1.81 billion compared with the previous range of $1.7-$1.76 billion. The Zacks Consensus Estimate for revenues is pegged at $1.75 billion, which is at the lower end of the company’s guided range.
Kratos Defense now expects operating cash flows to be in the range of $30-$50 million and free cash flow to be in the band of $85-$105 million for 2026.
KTOS’ Zacks Rank
Kratos Defense currently has a Zacks Rank #4 (Sell).
RTX Corporation’s (RTX - Free Report) second-quarter 2026 adjusted earnings per share (EPS) of $1.89 beat the Zacks Consensus Estimate of $1.66 by 13.9%. The bottom line improved 21.1% from the year-ago quarter’s level of $1.56.
Revenues rose 14.5% year over year to $24.71 billion and outpaced the consensus mark of $22.83 billion by 8.2%.
Northrop Grumman Corporation (NOC - Free Report) reported second-quarter 2026 adjusted earnings of $7.68 per share, which beat the Zacks Consensus Estimate of $6.84 by 12.3%. The bottom line, however, declined 5.8% from the year-ago quarter’s level of $8.15.
NOC’s total sales of $10.88 billion in the second quarter outperformed the Zacks Consensus Estimate of $10.80 billion by 0.7%. The top line also improved 5.1% from $10.35 billion reported in the year-ago quarter.
Textron Inc. (TXT - Free Report) reported second-quarter 2026 adjusted earnings of $1.62 per share, which surpassed the Zacks Consensus Estimate of $1.52 by 6.6%. The bottom line also rose 4.5% from $1.55 in the year-ago quarter.
The company reported total revenues of $3.83 billion, which beat the Zacks Consensus Estimate of $3.82 billion by 0.15%. The top line also increased 3% from the year-ago quarter’s level of $3.72 billion.
View the Zacks #1 Rank List
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Kratos Defense Q2 Earnings and Revenues Outpace Estimates
Key Takeaways
Kratos Defense & Security Solutions, Inc. (KTOS - Free Report) reported second-quarter 2026 adjusted earnings of 21 cents per share, which beat the Zacks Consensus Estimate of 13 cents by 61.5%. The bottom line also increased 90.9% from the year-ago quarter’s 11 cents.
Kratos Defense reported GAAP earnings of 2 cents per share, which came in line with the year-ago quarter.
KTOS’ Revenue Growth Accelerates
Revenues of $458.8 million beat the consensus estimate of $412 million by 11.4% and increased 30.5% year over year. Kratos Government Solutions led the growth, while total organic revenues advanced 19.1%.
Product sales climbed 33.5% year over year to $289.1 million. Service revenues increased 25.8% to $169.7 million.
Kratos Defense & Security Solutions, Inc. Price, Consensus and EPS Surprise
Kratos Defense & Security Solutions, Inc. price-consensus-eps-surprise-chart | Kratos Defense & Security Solutions, Inc. Quote
Operational Update of Kratos Defense
Selling, general and administrative expenses jumped 35.5% to $73.3 million. Research and development expenses rose 33.3% to $13.6 million.
Amortization of intangible assets increased to $10.1 million from $2.8 million, while depreciation rose to $3.9 million from $3 million.
Kratos recorded an operating loss of $1.6 million against the operating income of $3.7 million a year earlier.
KTOS’ Segmental Performance
Unmanned Systems: Revenues from this segment totaled $79.1 million compared with $73.2 million in the year-ago quarter. The increase was primarily driven by Valkyrie-related activity.
Kratos Government Solutions: Revenues from this segment amounted to $379.7 million compared with $278.3 million in the year-ago quarter. This rise was due to organic revenue growth across its Defense and Rocket Support business, Turbine Technologies and Microwave Products and Space, Training and Cyber businesses, with organic revenue growth rates of 50.2%, 43.3%, 29.5% and 8.7%, respectively, year over year.
Financial Details of KTOS
As of June 28, 2026, cash and cash equivalents totaled $1.44 billion, up from $0.56 billion as of Dec. 28, 2025.
The company reported other current liabilities of $19.9 million as of June 28, 2026 compared with $9 million recorded as of Dec. 28, 2025.
The net cash used in operating activities amounted to $38.4 million during the first six months of 2026 compared with $40.9 million in the same period of 2025.
KTOS’ Backlog Supports Demand Visibility
Consolidated bookings totaled $492.2 million in the second quarter, resulting in a book-to-bill ratio of 1.1. The last-12-month book-to-bill ratio was 1.3, with bookings of $1.99 billion.
Backlog increased to $2.08 billion as of June 28, 2026 from $2.05 billion at the end of the first quarter. Funded backlog was $1.57 billion, while unfunded backlog totaled $512.7 million. The bid and proposal pipeline expanded to $15 billion from $14.3 billion.
Kratos Defense’s Guidance
KTOS projects second-quarter 2026 revenues to be in the range of $460-$480 million. The Zacks Consensus Estimate for revenues is pegged at $460.3 million, which is at the lower end of the company’s guided range.
Kratos raised its full-year 2026 revenue guidance to $1.75-$1.81 billion compared with the previous range of $1.7-$1.76 billion. The Zacks Consensus Estimate for revenues is pegged at $1.75 billion, which is at the lower end of the company’s guided range.
Kratos Defense now expects operating cash flows to be in the range of $30-$50 million and free cash flow to be in the band of $85-$105 million for 2026.
KTOS’ Zacks Rank
Kratos Defense currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Defense Releases
RTX Corporation’s (RTX - Free Report) second-quarter 2026 adjusted earnings per share (EPS) of $1.89 beat the Zacks Consensus Estimate of $1.66 by 13.9%. The bottom line improved 21.1% from the year-ago quarter’s level of $1.56.
Revenues rose 14.5% year over year to $24.71 billion and outpaced the consensus mark of $22.83 billion by 8.2%.
Northrop Grumman Corporation (NOC - Free Report) reported second-quarter 2026 adjusted earnings of $7.68 per share, which beat the Zacks Consensus Estimate of $6.84 by 12.3%. The bottom line, however, declined 5.8% from the year-ago quarter’s level of $8.15.
NOC’s total sales of $10.88 billion in the second quarter outperformed the Zacks Consensus Estimate of $10.80 billion by 0.7%. The top line also improved 5.1% from $10.35 billion reported in the year-ago quarter.
Textron Inc. (TXT - Free Report) reported second-quarter 2026 adjusted earnings of $1.62 per share, which surpassed the Zacks Consensus Estimate of $1.52 by 6.6%. The bottom line also rose 4.5% from $1.55 in the year-ago quarter.
The company reported total revenues of $3.83 billion, which beat the Zacks Consensus Estimate of $3.82 billion by 0.15%. The top line also increased 3% from the year-ago quarter’s level of $3.72 billion.