Kratos Defense & Security Solutions raises full-year 2026 revenue guidance

Kratos Defense & Security Solutions reported its second-quarter 2026 financial results on August 4, 2026. Revenue was $458.8 million, up $107.3 million from $351.5 million in the second quarter of 2025, reflecting 30.5% growth and 19.1% organic growth. The company reported an operating loss of $1.6 million and net income of $4.4 million, with adjusted EBITDA of $38.2 million.

Kratos Government Solutions revenue was $379.7 million, up 22.0% organically, while Unmanned Systems revenue was $79.1 million, up 8.1% organically. Adjusted earnings per share were $0.21, compared with $0.11 a year earlier. Cash used in operations was $11 million in the quarter, and free cash flow used was $18.9 million after $17.2 million of capital expenditures.

Kratos Defense & Security Solutions said it is increasing its full-year 2026 revenue guidance to $1.75 billion to $1.81 billion. The company said it expects third-quarter organic revenue growth of approximately 19% to 25%, and that its forecasted organic revenue growth for full-year 2026 is approximately 18% to 23%.

The company said it is tightening its full-year 2026 adjusted EBITDA guidance and expects its full-year 2026 adjusted EBITDA margin rate to be approximately 100 bps greater than its reported 2025 rate. It said it expects second-half 2026 adjusted EBITDA to be greater than first-half adjusted EBITDA.

Kratos Defense & Security Solutions said it plans to provide initial full-year 2027 financial guidance when it reports third-quarter 2026 results later this year. It also said it expects its 2027 adjusted EBITDA margin rate to increase an additional 100 bps above its forecast 2026 rate, and that its investments are expected to continue at least into fiscal 2027.