Kratos Defense & Security Solutions raises fiscal 2026 guidance after first quarter results

Kratos Defense & Security Solutions reported first quarter 2026 results on May 6, 2026, and increased its fiscal 2026 guidance. Revenue was $371 million, up $68.4 million from $302.6 million a year earlier, reflecting 22.6 percent growth, including 15.8 percent organic growth. GAAP net income was $11.9 million, or $0.07 per share, compared with $4.5 million, or $0.03 per share, a year earlier.

By segment, Unmanned Systems revenue was $82.6 million, with 30.9 percent organic growth, and Government Solutions revenue was $288.4 million, with 11.8 percent organic growth. Operating income was $4.7 million, adjusted EBITDA was $38.7 million, and adjusted earnings per share was $0.16, compared with $0.12 a year earlier. Consolidated bookings were $605.2 million, for a book to bill ratio of 1.6 to 1.0.

Cash flow used in operations was $27.4 million in the quarter. After $19.9 million of capital expenditures and netting $4.2 million of proceeds from sales of company-owned Valkyries, free cash flow used in operations was $43.1 million.

The company said it expects fiscal 2026 revenue of $1.7 billion to $1.76 billion and adjusted EBITDA of $170 million to $176 million. The ranges include the Nomad Global Communication Solutions and Orbit Technologies Ltd. acquisitions. The company also said it expects full-year 2026 adjusted EBITDA margin to be about 100 basis points above its reported 2025 margin.

President and CEO Eric DeMarco said the first quarter results and 1.6 to 1.0 book to bill ratio show growth that is accelerating. The company said it expects to provide full-year 2027 financial guidance when it reports third quarter fiscal 2026 results later this year.