Kratos Defense & Security Solutions (NASDAQ:KTOS) Announces Quarterly Earnings Results, Beats Expectations By $0.03 EPS

07 May 2026, 00:56 by Jessica Moore · The Cerbat Gem

Kratos Defense & Security Solutions (NASDAQ:KTOS – Get Free Report) posted its quarterly earnings data on Wednesday. The aerospace company reported $0.16 earnings per share for the quarter, topping the consensus estimate of $0.13 by $0.03, FiscalAI reports. The business had revenue of $371.00 million during the quarter, compared to analysts’ expectations of $344.99 million. Kratos Defense & Security Solutions had a net margin of 1.63% and a return on equity of 3.34%. Kratos Defense & Security Solutions’s revenue was up 22.6% compared to the same quarter last year. During the same quarter in the prior year, the business posted $0.12 earnings per share.

Here are the key takeaways from Kratos Defense & Security Solutions’ conference call:

Kratos materially outperformed Q1 expectations with $371M in revenue, $38.7M adjusted EBITDA, a record backlog of $2B, a 1.6:1 company book‑to‑bill and a $14B opportunity pipeline, signaling strong near‑term demand and execution.
The space/satellite business (OpenSpace software and space domain awareness) is highlighted as a major growth driver after winning a $447M U.S. Space Force ground‑system contract and a 3:1 Q1 book‑to‑bill in satellites, with meaningful profitability expected in Q3–Q4.
Management expects rapid scale in hypersonics and propulsion (guiding ~$400M in hypersonics revenue for 2026 and ~$700M for 2027), plus plans to begin LRIP for small jet engines this year and produce thousands of engines in 2027–2028, positioning these franchises as multi‑year growth drivers.
Near‑term cash generation is pressured: Q1 used operating cash of $27.4M and free cash flow of $43.1M, DSOs rose to 130 days, and elevated CapEx (~$160M guidance) and working‑capital needs are expected as production ramps.
Updated guidance targets full‑year 2026 revenue of $1.7–$1.76B and a company goal of a 100 basis point EBITDA‑margin improvement year‑over‑year for 2026 and 2027, but Q2 guidance is conservative due to mix, overhead ramp and timing of government funding.

Kratos Defense & Security Solutions Trading Up 3.7%

Shares of KTOS stock traded up $2.21 during trading hours on Wednesday, hitting $61.52. 4,348,103 shares of the company were exchanged, compared to its average volume of 3,625,811. The firm has a market cap of $11.53 billion, a P/E ratio of 473.27 and a beta of 1.06. Kratos Defense & Security Solutions has a fifty-two week low of $32.85 and a fifty-two week high of $134.00. The company has a debt-to-equity ratio of 0.05, a quick ratio of 3.46 and a current ratio of 4.06. The company has a 50 day simple moving average of $77.13 and a two-hundred day simple moving average of $84.59.

Key Stories Impacting Kratos Defense & Security Solutions

Here are the key news stories impacting Kratos Defense & Security Solutions this week:

Positive Sentiment: Q1 beat and raised FY26 guidance — Kratos reported $0.16 non‑GAAP EPS vs. $0.13 est. and $371.0M revenue vs. ~$345M est.; management raised FY26 revenue to $1.70–$1.76B and adjusted EBITDA to $170–$176M, which supports near‑term upside. Kratos Reports First Quarter 2026 Financial Results and Increases Fiscal FY26 Financial Guidance
Positive Sentiment: Strong bookings, backlog and pipeline — management cited a 1.6:1 Q1 book‑to‑bill, record backlog (~$2B) and an expanded opportunity pipeline (~$14B), implying sustained revenue visibility beyond the quarter. Q1 2026 Earnings Call Transcript
Positive Sentiment: Segment strength — Unmanned Systems posted ~30.9% organic growth and Government Solutions showed healthy organic gains, signaling product demand and diversification across defense programs. Kratos Reports First Quarter 2026 Financial Results
Positive Sentiment: Analyst upgrades and institutional buying — Several firms raised price targets and multiple funds increased positions, which can support sentiment and liquidity. MarketBeat KTOS Coverage
Neutral Sentiment: Insider sale disclosed — CFO sold 5,000 shares under a pre‑arranged Rule 10b5‑1 plan; routine but worth noting for governance/flow context. Insider Selling: CFO Sells 5,000 Shares
Negative Sentiment: Near‑term guide mixed — Q2 revenue guidance ($400–$410M) was roughly in line to slightly below the Street (reports noted ~2.3% below one consensus), which could pressure near‑term expectations despite the raised full‑year view. Kratos Delivers Strong Q1 CY2026 Numbers
Negative Sentiment: High valuation and recent pullback — KTOS trades with a very high P/E and has shown a YTD pullback; stretched multiples increase sensitivity to execution and guidance. Is It Time To Reassess Kratos After Pullback?

Insider Activity at Kratos Defense & Security Solutions

In related news, Director Scot B. Jarvis sold 5,417 shares of Kratos Defense & Security Solutions stock in a transaction on Thursday, April 16th. The shares were sold at an average price of $75.90, for a total value of $411,150.30. Following the completion of the sale, the director owned 75,123 shares of the company’s stock, valued at approximately $5,701,835.70. This trade represents a 6.73% decrease in their position. The transaction was disclosed in a document filed with the SEC, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Deanna H. Lund sold 5,000 shares of Kratos Defense & Security Solutions stock in a transaction on Friday, May 1st. The shares were sold at an average price of $62.10, for a total transaction of $310,500.00. Following the completion of the sale, the chief financial officer directly owned 295,200 shares of the company’s stock, valued at approximately $18,331,920. The trade was a 1.67% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last quarter, insiders have sold 173,027 shares of company stock worth $13,871,640. Corporate insiders own 1.50% of the company’s stock.

Institutional Investors Weigh In On Kratos Defense & Security Solutions

A number of hedge funds have recently made changes to their positions in KTOS. Mcguire Capital Advisors Inc. bought a new position in Kratos Defense & Security Solutions during the fourth quarter valued at about $25,000. Rakuten Securities Inc. bought a new position in Kratos Defense & Security Solutions during the second quarter valued at about $31,000. Kemnay Advisory Services Inc. bought a new position in Kratos Defense & Security Solutions during the fourth quarter valued at about $37,000. NewEdge Advisors LLC grew its position in Kratos Defense & Security Solutions by 64.4% during the first quarter. NewEdge Advisors LLC now owns 1,315 shares of the aerospace company’s stock valued at $39,000 after buying an additional 515 shares during the period. Finally, Parallel Advisors LLC grew its position in Kratos Defense & Security Solutions by 44.1% during the fourth quarter. Parallel Advisors LLC now owns 526 shares of the aerospace company’s stock valued at $40,000 after buying an additional 161 shares during the period. 75.92% of the stock is currently owned by institutional investors.

Wall Street Analyst Weigh In

KTOS has been the subject of a number of research reports. Cantor Fitzgerald reissued an “overweight” rating and issued a $115.00 target price on shares of Kratos Defense & Security Solutions in a report on Tuesday, February 24th. The Goldman Sachs Group raised their price objective on shares of Kratos Defense & Security Solutions from $93.00 to $125.00 and gave the company a “buy” rating in a report on Tuesday, January 20th. B. Riley Financial raised their price objective on shares of Kratos Defense & Security Solutions from $105.00 to $128.00 and gave the company a “buy” rating in a report on Friday, January 9th. Noble Financial reiterated an “outperform” rating on shares of Kratos Defense & Security Solutions in a report on Tuesday, January 20th. Finally, KeyCorp raised their price objective on shares of Kratos Defense & Security Solutions from $90.00 to $130.00 and gave the company an “overweight” rating in a report on Wednesday, January 28th. Three equities research analysts have rated the stock with a Strong Buy rating, fifteen have issued a Buy rating and five have assigned a Hold rating to the company’s stock. According to data from MarketBeat, the stock presently has an average rating of “Moderate Buy” and an average target price of $98.28.

Read Our Latest Analysis on KTOS

About Kratos Defense & Security Solutions

(Get Free Report)

Kratos Defense & Security Solutions, Inc (NASDAQ: KTOS) is a technology-driven company that specializes in national security and defense solutions for government and military customers. The firm’s core capabilities span unmanned systems, satellite communications, missile defense, cyber security, and directed-energy weapons. Through its integrated approach, Kratos delivers mission-critical products and services designed to enhance operational readiness and support force modernization initiatives.

In the unmanned systems arena, Kratos develops high-performance aerial platforms used as target drones, low-cost attritable aircraft and experimental stealth demonstrators.