Kratos Defense & Security Solutions 4Q Profit Rises; Sees Federal Shutdown Denting 1Q — Update

By Amira McKee

Kratos Defense & Security Solutions logged a higher profit in the fourth quarter, but the company said it expects government contract delays to dent its first-quarter results.

Kratos said the extended federal government shutdown delayed certain "short-turn" contract awards to the company as well as longer-term contracts, programs and funding, the company said. The maker of drones and other high-tech equipment now expects to receive these contract and program awards, sales and funding in the second quarter.

For the first quarter, Kratos anticipates revenues between $335 million and $345 million. Analysts polled by FactSet are looking for $347.7 million.

The company guided for 2026 revenue of $1.595 billion to $1.675 billion. Wall Street is expecting full-year revenue of $1.60 billion, according to FactSet.

Kratos expects to spend $135 million to $145 million on capital expenditures in 2026, in line with the $137.9 million that Wall Street is projecting, according to FactSet.

The aerospace and defense company posted a fourth-quarter net income of $5.9 million, or 3 cents a share, compared with $3.9 million, or 3 cents a share, a year earlier.

Adjusted earnings came in at 18 cents a share. Analysts polled by FactSet were expecting 16 cents a share.

Revenue grew 22% to $345.1 million, beating the $327.2 million that Wall Street had forecast, according to FactSet.

Kratos' government solutions segment, which accounts for most of its top-line, saw organic revenue growth of 22%, driven by double-digit gains across its defense rocket systems, microwave products, and space, training and cyber businesses.

The company's unmanned systems business logged revenue of $68.5 million, up from $61.1 million a year earlier, on activity related to its Valkyrie aerial vehicles.

Write to Amira McKee at amira.mckee@wsj.com

(END) Dow Jones Newswires

February 23, 2026 17:36 ET (22:36 GMT)