Kratos Defense & Security Solutions, Inc. reported significant financial growth in its latest quarterly results, with total revenues reaching $371.0 million for the three months ended March 29, 2026, a 22.6% increase from $302.6 million in the same period last year. The company's service revenues rose to $134.0 million, up 30.9%, while product sales increased by 18.4% to $237.0 million. The net income for the quarter was $11.9 million, compared to $4.5 million in the prior year, resulting in a basic and diluted income per share of $0.07, up from $0.03.
The financial performance reflects a notable increase in operational activity, particularly in the Kratos Government Solutions (KGS) segment, which saw revenues grow by $48.9 million, driven by advancements in hypersonic systems and contributions from recent acquisitions, including Nomad Global Communication Solutions and Orbit Technologies. The KGS segment's total revenues reached $288.4 million, while the Unmanned Systems segment reported $82.6 million, marking a 30.9% increase year-over-year. The overall gross profit margin slightly decreased to 24.2% from 24.3%, attributed to rising labor and material costs.
Strategically, Kratos has made significant acquisitions, including the purchase of Orbit Technologies for approximately $352.7 million and Nomad Global Communication Solutions for $148.8 million. These acquisitions are expected to enhance Kratos' capabilities in satellite-based communication systems and mobile operations centers, respectively. The company also reported a substantial increase in its total backlog, which rose to approximately $2.011 billion, with $1.457 billion funded, indicating strong future revenue potential.
Operationally, Kratos has expanded its workforce and increased its cash reserves significantly, ending the quarter with $1.464 billion in cash and cash equivalents, up from $560.6 million at the end of the previous fiscal year. The company’s employee headcount has also grown, reflecting its commitment to scaling operations in response to increased demand. The company anticipates continued growth, supported by a favorable defense spending environment, with expectations to recognize approximately 37% of its backlog as revenue in fiscal year 2026.
Looking ahead, Kratos remains optimistic about its growth trajectory, driven by ongoing investments in technology and infrastructure to meet the demands of national security and defense markets. The company is well-positioned to capitalize on the increasing defense budgets and modernization efforts by the U.S. government and its allies, despite potential challenges related to supply chain disruptions and labor shortages.
About KRATOS DEFENSE & SECURITY SOLUTIONS, INC.
Kratos Defense & Security Solutions is a technology company providing hardware, systems, software, and solutions for defense, national security, and commercial markets. Its offerings include unmanned systems, space and satellite communications, missile and hypersonic systems, microwave electronics, cybersecurity, and training solutions. Kratos focuses on rapid, affordable innovation, leveraging proprietary technology and strategic investments to address critical threats faced by U.S. and allied militaries worldwide.
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