Kratos Defense drops 3% due to weaker-than-expected first-quarter guidance

LootboxPhobia · 2026-02-23T23:24:51+00:00

Kratos Defense & Security Solutions exceeded expectations in Q4, with adjusted earnings per share of $0.18 and revenue growth of 21.9% to $345.1 million. However, the stock fell 3.6% due to Q1 revenue guidance below analyst expectations. The company expects a median revenue of $1.635 billion for fiscal year 2026, surpassing market expectations.

LootboxPhobia

2026-02-23 23:24:51

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San Diego - Kratos Defense & Security Solutions, Inc. (NASDAQ: KTOS) reported fourth-quarter results that exceeded analyst expectations, but the stock fell 3.6% due to the company’s disappointing first-quarter revenue guidance.

The defense technology company reported adjusted earnings per share of $0.18 for the fourth quarter, surpassing analyst estimates of $0.17. Revenue reached $345.1 million, a 21.9% increase from $283.1 million in the same period last year and exceeding the market consensus of $327.63 million. However, the company’s guidance for first-quarter revenue in fiscal 2026 was $335-345 million, with a midpoint of $340 million, below the analyst consensus of $346.9 million.

For fiscal 2026, Kratos provided a revenue guidance of $1.595-1.675 billion, with a midpoint of $1.635 billion, slightly above the market expectation of $1.6 billion. The company expects adjusted EBITDA of $157-167 million, representing 9.9-10.0% of revenue. This guidance includes the recently acquired Nomad Global Communication Solutions.

CEO Eric DeMarco stated, “We exceeded our financial targets for the fourth quarter at the end of 2025, with approximately 20% organic revenue growth year-over-year in Q4. Based on this 20% organic growth, we achieved a record backlog of $1.573 billion and a record opportunity pipeline of $13.7 billion, with a 1.3 to 1.0 order-to-shipment ratio.”

The company’s unmanned systems division generated $68.5 million in revenue, an organic increase of 12.1% from $61.1 million last year. Kratos Government Solutions reported revenue of $276.6 million, a 22.2% organic growth from $222.0 million. Adjusted EBITDA for Q4 was $34.1 million, compared to $25.2 million in the same period last year.

Kratos announced consolidated orders of $438.3 million for the fourth quarter, with an order-to-shipment ratio of 1.3 to 1.0.

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