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Kratos Defense & Security Solutions

Kratos Defense & Security Solutions (KTOS) Q2 2026 Earnings

Reported Aug 4, 2026 at 4:18 PM ET · SEC Source

Q2 26 EPS

$0.21

BEAT +44.33%

Est. $0.15

Q2 26 Revenue

$458.8M

BEAT +11.54%

Est. $411.3M

vs S&P Since Q2 26

+17.3%

BEATING MARKET

KTOS +17.6% vs S&P +0.3%

Market Reaction

Did KTOS Beat Earnings? Q2 2026 Results

Kratos Defense & Security Solutions posted a blowout second quarter of fiscal 2026, with adjusted EPS of $0.21 beating the $0.15 consensus estimate by 44.33%, marking the company's fifth consecutive quarter of beating EPS expectations. Revenue of $45… Read more Kratos Defense & Security Solutions posted a blowout second quarter of fiscal 2026, with adjusted EPS of $0.21 beating the $0.15 consensus estimate by 44.33%, marking the company's fifth consecutive quarter of beating EPS expectations. Revenue of $458.80 million topped the $411.33 million consensus by 11.54% and represented 30.5% year-over-year growth, powered primarily by the Kratos Government Solutions segment, which generated $379.70 million, a 36.4% jump that included standout organic growth in Defense Rocket Systems and Turbine Technologies of 50.2% and 43.3%, respectively. The acquisitions of Nomad Global Communication Solutions and Orbit Technologies added meaningful top-line contribution alongside the organic momentum. With a consolidated book-to-bill ratio of 1.1x in the quarter and a bid and proposal pipeline expanding to $15.00 billion, demand signals remain strong. Management raised full-year 2026 revenue guidance to $1.75 billion to $1.81 billion, reflecting 18% to 23% organic growth, with analysts and investors continuing to debate whether the stock's current valuation fully captures the company's deepening position in hypersonics and autonomous systems.

Key Takeaways

  • • Defense Rocket Systems organic revenue growth of 50.2% YoY
  • • Turbine Technologies organic revenue growth of 43.3% YoY
  • • Microwave Products organic revenue growth of 29.5% YoY
  • • Space, Training and Cyber organic revenue growth of 8.7% YoY
  • • Valkyrie-related activity driving Unmanned Systems growth
  • • Acquisitions of Nomad and Orbit contributing to KGS revenue increase
  • • Consolidated book-to-bill ratio of 1.3x over last twelve months with $1.990 billion in bookings

KTOS Forward Guidance & Outlook

Kratos raised full-year 2026 revenue guidance to $1.750–$1.810 billion, reflecting forecasted organic revenue growth of approximately 18%–23% compared to full year 2025. Q3 2026 revenue is guided at $460–$480 million with organic growth of 19%–25%. Q4 organic growth is forecast at approximately 19%–31%. Full-year Adjusted EBITDA guidance was tightened to $173–$176 million. Full-year operating cash flow is expected at $30–$50 million, capital expenditures at $125–$135 million, and free cash flow use of $85–$105 million. The company expects second half 2026 revenue and Adjusted EBITDA to be significantly higher than the first half. Full-year 2026 Adjusted EBITDA margin rates are expected to be approximately 100 bps greater than 2025, with an additional 100 bps improvement expected in 2027. The company plans to begin producing approximately 40 Valkyries annually by early 2028 and ramp jet engine production to 3,000 units in 2027. Unmanned Systems organic growth is now expected at approximately 10% for full year 2026. Initial full-year 2027 guidance is expected when Q3 results are reported.

24/7 Wall St

KTOS YoY Financials

Q2 2026 vs Q2 2025, source: SEC Filings

24/7 Wall St

KTOS Revenue by Segment

With YoY comparisons, source: SEC Filings

Q1 25 Q2 26

“Kratos' second quarter results are reflective of the execution of the Kratos team and that our strategy, including making internally funded investments to be first-to-market with relevant hardware and software, that is engineered up front for affordable mass production, at scale, is aligned with the Department of War's priorities. Representative of this alignment is Kratos' last 12 month book-to-bill ratio of 1.3 to 1.0, the number of opportunities for Kratos continuing to increase as evidenced in our bid and proposal pipeline of $15 billion, and our business momentum expected to accelerate in the second half of 2026 and into 2027.”

— Eric DeMarco, Q2 2026 Earnings Press Release

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