The strong beat and raised guidance confirm accelerating defense demand, especially for Valkyrie drones and hypersonics. However, the stock has historically faded after earnings (0% win rate at T+20 on prior reports). Consider taking partial profits on a gap-up, but the fundamental momentum supports a longer-term bullish view. Monitor cash flow and capex trajectory for signs of inflection.
Price Chart
Executive Summary
Kratos reported Q1 2026 revenue of $371.0M (+22.6% YoY), beating consensus by a wide margin, and raised its full-year 2026 guidance to $1.700B-$1.760B (from $1.595B-$1.675B). Adjusted EPS of $0.16 more than doubled the Street estimate of $0.08. Record backlog of $2.01B and strong bookings reinforce the bullish thesis around defense modernization and Valkyrie drone production.
Key Financial Metrics
Key Facts
- Q1 2026 revenue $371.0M, up 22.6% total (15.8% organic) from $302.6M in Q1 2025
- Adjusted EPS $0.16 vs consensus $0.08 (100% beat); GAAP EPS $0.07 vs $0.03 YoY
- Adjusted EBITDA $38.7M (10.4% margin) vs $26.7M (8.8% margin) in Q1 2025
- Bookings $605.2M with book-to-bill 1.6x; backlog hit record $2.01B
- FY2026 guidance raised: revenue $1.700B-$1.760B (prev $1.595B-$1.675B); Adj. EBITDA $170M-$176M (prev $157M-$167M)
- Cash flow from operations negative $27.4M; Free cash flow negative $43.1M due to working capital and capex
- Unmanned Systems revenue grew 30.9% organic; KGS segment grew 11.8% organic
Financial Impact
Revenue beat by ~$26M vs prior guidance midpoint; EPS beat consensus by $0.08
Risk Factors
- Negative free cash flow due to heavy investment in production capacity
- GAAP operating income declined YoY ($4.7M vs $6.6M) on higher SG&A and stock comp
- Valuation already reflects growth; stock has historically pulled back after earnings
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 6 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001069258-26-000051 |
| Document: ktos-20260506.htm | 0001069258-26-000051 |
| Document: 0001069258-26-000051-index-headers.html | 0001069258-26-000051 |
| Document: 0001069258-26-000051-index.html | 0001069258-26-000051 |
| Document: 0001069258-26-000051.txt | 0001069258-26-000051 |
| 8-K Data (Synthetic) | 0001069258-26-000051 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Aug 26, 2026 5w ago | Insider Cluster | $53.69 $47.02 | ▼ −12.42% | ▼ −11.91% | $43.07 (−19.78%) |
Aug 20, 2026 6w ago | Insider Cluster | $57.17 $47.46 | ▲ +16.98% | ▲ +16.71% | $43.07 (+24.66%) |
Aug 19, 2026 6w ago | Insider Cluster | $56.18 $47.46 | ▼ −15.52% | ▼ −15.52% | $43.07 (−23.34%) |
Aug 17, 2026 6w ago | 144 | $61.99 $47.59 | ▼ −23.23% | ▼ −21.92% | $43.07 (−30.52%) |
Aug 17, 2026 6w ago | Press Release | $63.29 $47.62 | ▼ −24.76% | ▼ −22.78% | $43.07 (−31.95%) |
Aug 7, 2026 7w ago | Insider Cluster | $62.42 $48.20 | ▼ −22.78% | ▼ −21.87% | $43.07 (−31.00%) |
Jul 17, 2026 10w ago | Insider Cluster | $45.94 $63.29 | ▲ +37.77% | ▲ +33.65% | $43.07 (−6.25%) |
Jul 17, 2026 10w ago | Insider Cluster | $45.94 $63.29 | ▲ +37.77% | ▲ +33.65% | $43.07 (−6.25%) |
Jul 10, 2026 11w ago | Insider Cluster | $46.96 $62.42 | ▲ +32.92% | ▲ +29.74% | $43.07 (−8.28%) |
Jul 2, 2026 13w ago | Insider Cluster | $55.35 $46.17 | ▼ −16.59% | ▼ −16.17% | $43.07 (−22.19%) |
US Market Status
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