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Sep 28
Kratos Q3 2025 Earnings Report
Kratos delivered strong Q3 2025 results with double-digit revenue growth across both key segments and improved profitability metrics.
Key Takeaways
Kratos reported third quarter 2025 revenue of $347.6 million and net income of $8.7 million. EPS reached $0.05, while non-GAAP EPS came in at $0.14. Growth was driven by robust performance in both Unmanned Systems and Government Solutions segments.
Total revenue grew to $347.6 million, up from $275.9 million a year ago.
Non-GAAP EPS was $0.14, with GAAP EPS at $0.05.
Unmanned Systems revenue increased 35.8% YoY to $87.2 million.
Free cash flow was negative due to high capital expenditures of $28 million.
Kratos
Kratos
Kratos Revenue by Segment
Revenue by Segment
Unmanned Systems Revenue
CapyFin.comKratos Gov’t Solutions Revenue
CapyFin.com Forward Guidance
Kratos raised its FY2025 revenue outlook and projects strong organic growth and margin expansion into 2026 and 2027.
Positive Outlook
- Raised FY2025 revenue guidance to $1.32–$1.33 billion.
- Maintained FY2025 adjusted EBITDA guidance of $114–$120 million.
- 2026 revenue projected to grow 15%–20% over 2025.
- Expected 100 basis point increase in EBITDA margin in 2026.
- Initial 2027 revenue target implies 18%–23% growth over 2026.
Challenges Ahead
- FY2025 free cash flow expected to be negative due to capex and receivables.
- Federal government shutdown delaying contract payments.
- Higher investments in bid and proposal efforts impacting profit margins.
- Working capital pressure from rapid revenue growth.
- Cost inflation and supply chain disruptions remain a headwind.
Revenue & Expenses
Visualization of income flow from segment revenue to net income