Kratos Defense Q1 Earnings and Revenues Surpass Estimates

Kratos Defense & Security Solutions, Inc. KTOS reported first-quarter 2026 adjusted earnings of 16 cents per share, which beat the Zacks Consensus Estimate of 13 cents by 26.3%. The bottom line also increased 33.3% from the year-ago quarter’s 12 cents. 

Kratos Defense reported GAAP earnings of 7 cents per share compared with 3 cents in the year-ago quarter.

KTOS’ Total Revenues

Total revenues were $371 million, which outpaced the Zacks Consensus Estimate of $344 million by 7.7%. The figure also rose 22.6% from $302.6 million recorded in the year-ago quarter.

Operational Update of Kratos Defense

Kratos Defense’s selling, general and administrative expenses increased 19.9% year over year. Research and development expenses rose 7% compared with the prior-year quarter. Depreciation expenses climbed 46.2% year over year.

Expenses related to the amortization of intangible assets rose 176.2% from the year-ago figure.

The company reported operating income of $4.7 million, which decreased from the year-ago quarter’s $6.6 million.

It posted a consolidated book-to-bill ratio of 1.6 to 1, with bookings worth $605.2 million.

The total backlog at the end of the first quarter of 2026 was $1.635 billion compared with $1.212 billion at the end of the fourth quarter of 2025.

KTOS’ Segmental Performance

Unmanned Systems: Revenues from this segment totaled $82.6 million compared with $63.1 million in the year-ago quarter. The increase was primarily driven by Valkyrie-related activity.

Kratos Government Solutions: Revenues from this segment amounted to $288.4 million compared with $239.5 million in the year-ago quarter. This increase was due to organic revenue growth across its Defense and Rocket Support business, Turbine Technologies and Microwave Products businesses, with organic revenue growth rates of 45.8%, 20.3% and 12.3%, respectively, year over year.

Financial Details of KTOS

As of March 29, 2026, cash and cash equivalents totaled $1.46 billion, up from $0.56 billion as of Dec. 28, 2025.

The company reported other current liabilities of $24.4 million as of March 29, 2026 compared with $9 million recorded as of Dec. 28, 2025.

The net cash used in operating activities amounted to $27.4 million during the first three months of 2026 compared with $29.2 million in the same period of 2025.

Kratos Defense’s Guidance

KTOS projects second-quarter 2026 revenues to be in the range of $400-$410 million. The Zacks Consensus Estimate for revenues is pegged at $401.3 million, which is at the lower end of the company’s guided range.

KTOS now expects 2026 revenues to be in the $1.7-$1.76 million range compared with the previous range of $1,595-$1,675 billion. The Zacks Consensus Estimate for revenues is pegged at $1.68 billion, lower than the company’s guided range.

Kratos Defense now expects operating cash flows to be in the range of $60-$70 million and free cash flow use to be in the band of $85-$105 million for 2026.

KTOS’ Zacks Rank

Kratos Defense currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Defense Releases

TransDigm Group Incorporated TDG reported second-quarter fiscal 2026 adjusted earnings of $9.85 per share, which topped the Zacks Consensus Estimate of $9.32 by 5.7%. The bottom line also improved 8% from the prior-year quarter’s figure of $9.11.

Sales amounted to $2.54 billion, up 18% from $2.15 billion registered in the prior-year period. The reported figure also topped the Zacks Consensus Estimate of $2.42 billion by 4.9%.

Teledyne Technologies Inc. TDY reported first-quarter 2026 adjusted earnings of $5.80 per share, which surpassed the Zacks Consensus Estimate of $5.48 by 5.9%. The bottom line also improved 17.2% from $4.95 recorded in the year-ago quarter.

Total sales were $1.56 billion, which beat the Zacks Consensus Estimate of $1.51 billion by 3.3%. The top line also jumped 7.6% from $1.45 billion reported in the year-ago quarter. 

Hexcel Corporation HXL reported first-quarter 2026 adjusted earnings of 59 cents per share, which improved 59.5% from the year-ago quarter’s figure of 37 cents. The bottom line also surpassed the Zacks Consensus Estimate of 42 cents by 40.5%.

The company’s net sales totaled $501.5 million, which beat the Zacks Consensus Estimate of $487 million by 3%. The top line also witnessed an improvement of 9.9% from the year-ago quarter’s figure of $456.5 million.

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This article originally published on Zacks Investment Research (zacks.com).

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