KRATOS DEFENSE & SECURITY SOLUTIONS, INC. Earnings Summary — Q1 2026

• Revenue reached a quarterly high of $371 million, representing 22.6% year-over-year growth.
• Net income spiked to $11.9 million, though heavily influenced by tax provisions and non-operating income.
• Operating income fell to $4.7 million compared to $8.2 million in the previous quarter, indicating rising cost structures.
• Total operating expenses rose to $84.9 million as the company scales its high-growth technology programs.
• The company continues to face a disconnect between strong top-line growth and thin GAAP operating margins.
• Diluted shares increased by nearly 15% year-over-year to 179 million, continuing the trend of shareholder dilution.

Management emphasizes its unique position in the 'low-cost' attritable drone and space communications market, focusing on total addressable market expansion over immediate margin optimization.

Improving

Top-line momentum is accelerating with double-digit revenue growth across multiple quarters, though expense management remains a secondary focus to scaling.

Kratos remains positioned as a disruptor in the defense sector, transitioning from a services-heavy model to a technology-intensive systems provider with significant upside in unmanned aerial programs.