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Sep 28, 2025
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.
Revenue by Segment
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.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
Analyze how earnings announcements historically affect stock price performance
Avg. Return Before/After Earnings
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