Kratos Defense & Security Solutions (NASDAQ:KTOS) Releases Earnings Results, Beats Estimates By $0.04 EPS

Posted by Don Miller on Feb 24th, 2026

Kratos Defense & Security Solutions (NASDAQ:KTOS – Get Free Report) released its quarterly earnings data on Monday. The aerospace company reported $0.18 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $0.14 by $0.04, FiscalAI reports. The firm had revenue of $345.10 million for the quarter, compared to the consensus estimate of $327.51 million. Kratos Defense & Security Solutions had a net margin of 1.56% and a return on equity of 3.14%. The company’s quarterly revenue was up 21.9% on a year-over-year basis. During the same period last year, the firm earned $0.13 earnings per share.

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

Kratos beat Q4 expectations with approximately 20% organic revenue growth, a 1.3:1 book-to-bill, a record backlog of $1.573B and a record opportunity pipeline of $13.7B, and management reiterated targets for 2026–2027.
Management expects a rapid hypersonics ramp — 120 Zeus/Oriole SRMs on order, new hypersonic facilities, a Pentagon Mach‑5+ award, and hypersonic revenue guidance of roughly $400M in 2026 and ~$700M in 2027.
Turbine/engine business is scaling — Spartan engines expected to enter low‑rate initial production in H2, a new 40,000 engines/year capacity facility is online, and management cited large potential engine volumes (including a ~15,000 engine ROM) that could drive high‑margin EBITDA upside.
Near‑term cash and margin pressures — Q4 operating cash flow was modest ($12.1M), Days Sales Outstanding rose to 121 days after funding delays, free cash flow was essentially neutral, and 2026 capex is high ($135–145M, incl. ~$50M Prometheus JV funding), which raises short‑term working capital risk.
Unmanned systems show runway but remain contingent — Valkyrie production goal raised to ~40/year by end of 2028 (from ~8 today) and MUX/TACAIR contributed initial awards, but large production quantities remain un‑definitized and are excluded from base guidance.

Kratos Defense & Security Solutions Price Performance

Shares of KTOS stock opened at $94.31 on Tuesday. Kratos Defense & Security Solutions has a fifty-two week low of $23.90 and a fifty-two week high of $134.00. The company has a debt-to-equity ratio of 0.04, a quick ratio of 3.68 and a current ratio of 4.30. The firm has a market capitalization of $16.06 billion, a price-to-earnings ratio of 725.52 and a beta of 1.09. The stock’s 50-day simple moving average is $96.78 and its 200-day simple moving average is $84.65.

Analyst Ratings Changes

KTOS has been the topic of several recent research reports. BNP Paribas Exane set a $80.00 target price on Kratos Defense & Security Solutions in a research report on Tuesday, November 18th. B. Riley Financial raised their price objective on Kratos Defense & Security Solutions from $105.00 to $128.00 and gave the company a “buy” rating in a research report on Friday, January 9th. Citizens Jmp lifted their target price on Kratos Defense & Security Solutions from $105.00 to $125.00 and gave the company a “market outperform” rating in a research note on Monday, January 12th. Truist Financial set a $135.00 target price on shares of Kratos Defense & Security Solutions in a report on Friday, January 9th. Finally, BTIG Research raised their price target on shares of Kratos Defense & Security Solutions from $80.00 to $95.00 and gave the company a “buy” rating in a report on Thursday, November 6th. One investment analyst has rated the stock with a Strong Buy rating, fifteen have issued a Buy rating and six have assigned a Hold rating to the company. According to data from MarketBeat, Kratos Defense & Security Solutions presently has a consensus rating of “Moderate Buy” and an average target price of $93.83.

View Our Latest Stock Report on Kratos Defense & Security Solutions

Trending Headlines about Kratos Defense & Security Solutions

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

Positive Sentiment: Q4 revenue and non‑GAAP EPS beat estimates (Q4 revenue $345.1M, +21.9% YoY; non‑GAAP EPS $0.18), showing strong organic growth across government and unmanned systems. Kratos Reports Fourth Quarter and Full Year 2025 Financial Results
Positive Sentiment: Management highlighted a major ramp in hypersonics (guiding hypersonic revenue toward ~$400M in 2026) and increased Valkyrie drone output, which support faster growth in high‑priority defense markets. Kratos anticipates doubling hypersonic revenue…
Positive Sentiment: New program awards: a joint $12.4M Air Force award with GE to design the GEK1500 engine and Pentagon hypersonics/materials work — these contracts deepen Kratos’ footprint in priority defense programs. Kratos and GE Aerospace Win U.S. Air Force Award…
Neutral Sentiment: Balance sheet and cash improved materially (cash +70% YoY to ~$560M), which reduces funding risk as Kratos scales production and makes program investments. Kratos Defense & Security Solutions Inc. (KTOS) Stock Falls on Q4 2025 Earnings
Neutral Sentiment: Street note: several analysts and outlets re‑examined valuation after the beat; some see growth priced in (UBS initiated Neutral), so upside depends on execution and milestone delivery. A Look At Kratos Defense & Security Solutions (KTOS) Valuation…
Negative Sentiment: Near‑term softness: Q1 revenue guidance ($335M–$345M) printed slightly below consensus (~$347M), and management warned a potential federal shutdown could dent Q1, which prompted a pullback despite the beat. Kratos (NASDAQ:KTOS) Delivers Impressive Q4 CY2025
Negative Sentiment: Significant insider selling activity reported in Q4 (multiple senior executives sold shares), which investors often view as a near‑term negative signal for sentiment. Kratos Defense & Security Solutions Inc. (KTOS) Stock Falls on Q4 2025 Earnings

Insider Buying and Selling

In other news, insider David M. Carter sold 4,000 shares of Kratos Defense & Security Solutions stock in a transaction on Thursday, February 5th. The shares were sold at an average price of $87.40, for a total transaction of $349,600.00. Following the completion of the sale, the insider directly owned 77,826 shares in the company, valued at approximately $6,801,992.40. The trade was a 4.89% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is accessible through the SEC website. Also, Director Scot B. Jarvis sold 5,000 shares of the business’s stock in a transaction on Thursday, February 12th. The shares were sold at an average price of $88.40, for a total transaction of $442,000.00. Following the sale, the director directly owned 95,417 shares in the company, valued at $8,434,862.80. This trade represents a 4.98% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders sold 881,907 shares of company stock worth $72,664,183 over the last ninety days. Company insiders own 2.37% of the company’s stock.

Institutional Trading of Kratos Defense & Security Solutions

A number of institutional investors and hedge funds have recently added to or reduced their stakes in KTOS. Corient Private Wealth LLC increased its holdings in shares of Kratos Defense & Security Solutions by 7,701.6% in the fourth quarter. Corient Private Wealth LLC now owns 1,593,549 shares of the aerospace company’s stock valued at $120,966,000 after purchasing an additional 1,573,123 shares during the period. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. boosted its position in Kratos Defense & Security Solutions by 59.1% in the second quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 1,094,884 shares of the aerospace company’s stock valued at $50,857,000 after buying an additional 406,895 shares during the last quarter. Clough Capital Partners L P purchased a new stake in Kratos Defense & Security Solutions in the second quarter valued at approximately $15,589,000. California Public Employees Retirement System acquired a new position in Kratos Defense & Security Solutions in the 3rd quarter worth approximately $24,308,000. Finally, Northern Trust Corp raised its position in Kratos Defense & Security Solutions by 13.6% during the 3rd quarter. Northern Trust Corp now owns 2,072,700 shares of the aerospace company’s stock worth $189,383,000 after buying an additional 247,652 shares during the last quarter. Institutional investors and hedge funds own 75.92% of the company’s stock.

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.