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Jun 29
Kratos Q2 2025 Earnings Report
Kratos reported its second quarter 2025 financial results, including significant revenue growth and increased full-year guidance.
Key Takeaways
Kratos delivered strong second quarter 2025 results, with revenues increasing by 17.1% year-over-year to $351.5 million, driven by robust organic growth, particularly in the Kratos Government Solutions segment. Despite a decrease in GAAP net income and EPS, the company's Adjusted EBITDA remained solid, and it increased its full-year revenue and Adjusted EBITDA guidance, reflecting confidence in future performance and strategic market positioning.
Second quarter 2025 revenues reached $351.5 million, marking a 17.1% increase over Q2 2024, with 15.2% organic growth.
GAAP Net Income for Q2 2025 was $2.9 million ($0.02 EPS), while Adjusted EPS was $0.11.
The Kratos Government Solutions (KGS) segment saw significant organic revenue growth of 27.1%, reaching $278.3 million.
Kratos increased its full-year 2025 revenue and Adjusted EBITDA guidance, anticipating continued growth and profitability.
Kratos
Kratos
Kratos Revenue by Segment
Revenue by Segment
Unmanned Systems Revenue
CapyFin.comKratos Government Solutions Revenue
CapyFin.com Forward Guidance
Kratos is providing initial third quarter 2025 guidance and increasing its full year 2025 revenue and Adjusted EBITDA guidance, reflecting anticipated continued growth and strategic investments.
Positive Outlook
- Increased full-year 2025 revenue guidance to $1.29 billion - $1.31 billion.
- Increased full-year 2025 Adjusted EBITDA guidance to $114 million - $120 million.
- Anticipated significant future organic growth across virtually all business units, including hypersonic systems and small jet engines.
- Expected increased EBITDA margins beginning in 2026 due to new higher-margin programs and renegotiated contracts.
- Continued strategic investments in manufacturing and production facilities to capture new opportunities and rebuild the industrial base.
Challenges Ahead
- Assumptions include potential impacts from employee sourcing, hiring, and retention challenges.
- Potential manufacturing, production, and supply chain disruptions are factored into guidance.
- Continued significant cost and price increases in materials, subcontractors, and labor are anticipated.
- Elevated capital expenditures for property, plant, and equipment are expected over the next two years.
- Operating cash flow guidance assumes consummation of certain investments in rocket systems and unmanned systems businesses.
Revenue & Expenses
Visualization of income flow from segment revenue to net income