Earnings Releases·Nov 5, 2026, 4:05 PM ET

Kratos Defense & Security Solutions — Third Quarter 2026 Earnings Summary

Consolidated revenues rose 35.7% year-over-year to $471.8 million with 23.2% organic growth, while Adjusted EBITDA increased to $50.9 million (10.8% margin) and Adjusted EPS reached $0.24; however, GAAP operating loss widened to $4.9 million and free cash flow used in operations was $29.4 million due to working capital needs and capital expenditures.
The company raised full-year 2026 revenue guidance to $1,780–$1,810 million and Adjusted EBITDA to $176–$180 million, while issuing initial 2027 forecasts of $2,100–$2,200 million in revenue and $230–$240 million in Adjusted EBITDA, assuming a production ramp of 3,000 turbo jet engines in 2027.
Backlog grew to a record $2.65 billion (2.2 book-to-bill ratio) driven by a 52.5% surge in the Government Solutions segment, though the Unmanned Systems segment saw revenue decline due to a prior-year one-time shipment and backlog contraction.
Management anticipates Q1 2027 will be the lightest quarter due to the federal Continuing Resolution, with full-year 2027 guidance to be provided in late February 2027 pending budget clarity, while significant investments in inventory and production continue to pressure near-term margins and cash flow.