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Kratos Defense (WF5A) Q3 2026 Earnings Report

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DE:WF5A Q3 2026 EPS Results

Actual EPS
EUR 0.22
Consensus EPS
EUR 0.19
Beat/Miss
Beat by +EUR 0.03
One Year Ago EPS
EUR 0.13

DE:WF5A Q3 2026 Revenue Results

Actual Revenue
EUR 426.47M
Expected Revenue
EUR 426.11M
Beat/Miss
Beat by +EUR 363.38K
YoY Revenue Growth
+35.73%

Earnings Announcement Details

Quarter
Q3 2026
Date
11/05/2026
Time
After Close
Conference Call
Thursday, November 5, 2026
DE:WF5A Upcoming Earnings

Kratos Defense's next earnings date is estimated for February 25, 2027, based on past reporting schedules.

Q3 2026 Earnings Call Audio

DE:WF5A Q3 2026 Earnings Call
0:00 / 0:00

Q3 2026 Earnings Slide Deck

No slide deck is available for this earnings event.

Q3 2026 Earnings Call Summary

Q3 2026
Earnings Call Date:Nov 05, 2026|% Change Since:4.08%|
Earnings Call Sentiment|Positive

The call was strongly positive. Highlights significantly outweighed the lowlights, supported by 35.7% consolidated revenue growth, 23.2% organic growth, record $1.04 billion bookings, a 2.2:1 book-to-bill ratio, record $2.6 billion backlog, an adjusted EBITDA beat, strong program wins, and an 18%-22% initial 2027 revenue-growth outlook. The principal challenges were funding and political uncertainty, supply-chain and labor constraints, negative near-term cash flow, higher working-capital needs, foreign-exchange pressure, and a cost-plus mix that limits margin expansion.

Company Guidance

Fourth quarter 2026 revenue guidance is $480 million-$510 million, reflecting estimated organic revenue growth of approximately 18%-26% as compared to the fourth quarter of 2025; tightened full year 2026 revenue guidance is $1.78 billion-$1.810 billion. Initial 2027 guidance is revenue of $2.1 billion-$2.2 billion and adjusted EBITDA of $230 million-$240 million, reflecting revenue growth of approximately 18%-22% over the current increased 2026 financial revenue guidance range and estimated organic revenue growth of 18%-22% from the estimated fiscal 2026 revenue range, with Q1 2027 expected to be the lightest revenue and EBITDA fiscal quarter and the third and fourth quarter of fiscal 2027 expected to reflect substantially greater revenue and adjusted EBITDA. Kratos expects approximately $700 million in hypersonic and rocket system revenue in 2027, to produce 3,000 turbojet engines in 2027 and deliver approximately 1,500 in 2027, predominantly in Q3 and Q4, with the remaining 1,500 delivered in 2028, and to place orders for a second production lot of approximately 5,000 more engines; Firejet manufacturing capacity is expected to approximately triple by the end of 2027, and the company currently expects to be cash flow positive by 2029.

  • Strong Third-Quarter Revenue GrowthThird-quarter revenue was $471.8 million, with consolidated revenue growth of 35.7% and organic revenue growth of 23.2%, slightly above the midpoint of the estimated 19.5%-25.5% organic growth range.
  • Record Bookings, Backlog, and Opportunity PipelineQ3 bookings were $1.04 billion, producing a 2.2:1 book-to-bill ratio, while backlog reached a record $2.6 billion and the opportunity pipeline increased to $15.5 billion.
  • Adjusted EBITDA Beat and Margin LeverageAdjusted EBITDA was $50.9 million, or 10.8%, above the company’s estimated $40 million-$45 million range. Management attributed the result to favorable mix and leverage from increased volume on fixed-cost infrastructure. The call also cited Q3 margin of 11.7%, up 200 basis points year-over-year.
  • KGS Segment Delivered Significant GrowthKGS revenue increased $136.8 million year-over-year, or 52.5%, including 35.8% organic growth. Acquisitions of Nomad and Orbit contributed $43.7 million.
  • KGS Business-Line Organic GrowthKGS organic growth included 149% in rocket support hypersonics, 27.1% in turbine technologies, 16.6% in microwave electronics, and 11.6% in space training and cyber.
  • Raised and Tightened 2026 OutlookFull-year 2026 revenue guidance was tightened to $1.78 billion-$1.810 billion. Fourth-quarter revenue guidance is $480 million-$510 million, representing estimated organic revenue growth of approximately 18%-26% versus the fourth quarter of 2025.
  • Initial 2027 Guidance Indicates Continued GrowthInitial fiscal 2027 guidance calls for revenue of $2.1 billion-$2.2 billion and adjusted EBITDA of $230 million-$240 million, reflecting revenue growth of approximately 18%-22% over the current increased 2026 revenue guidance range. Management said the internal 2027 forecast currently rolls up considerably higher than the initial guide.
  • Valkyrie Achieved International Flight MilestonesKratos Valkyrie successfully flew in Europe with Airbus and achieved or exceeded every required milestone. Kratos also received a Valkyrie low-rate initial production contract award and expects additional Valkyrie awards in 2027.
  • Unmanned Systems Production ExpansionKratos expects its Unmanned Systems Division to be one of its strongest organic growers next year. The company expects to approximately triple Firejet manufacturing capacity in Oklahoma City by the end of 2027 and is discussing international jet-drone production facilities.
  • Firejet and Valkyrie Demand RampManagement said demand and interest for Valkyrie, tactical Firejet, and Target Firejet increased domestically and internationally. Firejet is a U.S. Army program of record, while AFSAT and SSAT are Air Force and Navy programs of record, respectively.
  • J85 Engine Selected for JDAM-LRThe Kratos J85 turbojet engine was selected to power Boeing’s BSU-111/B Payload Delivery Unit, or JDAM-LR, a precision-guided munition capable of traveling over 300 nautical miles with a 500-pound-class payload.
  • Large Turbojet Engine Production PlanFor the Family of Affordable Mass Missiles opportunity, Kratos is placing supply-chain orders to produce 3,000 turbojet engines in Michigan in 2027. The company expects to deliver approximately 1,500 engines in 2027, predominantly in Q3 and Q4, and the remaining 1,500 in 2028. Kratos also expects to order approximately 5,000 additional engines next year, planned primarily for production in 2028 and delivery in 2028 and 2029.
  • GEK800 Selected as JASSM Second-Source EngineThe Kratos-GE Aerospace GEK800 engine was selected as a second-source propulsion system for JASSM, received the U.S. military designation F143-ZZ-100, and received a U.S. Air Force engineering, manufacturing, and development contract. Kratos’ Blade Works facility in Oklahoma remains on track to begin operations in late 2027.
  • Hypersonics Business Funding and GrowthKratos’ hypersonic and rocket systems business received significant additional funding of several hundred million dollars, with approximately $600 million received to date. Management remains on track for approximately $700 million of revenue in 2027 and has started work on the Nemesis 1, Nemesis 2, and Kraken programs.
  • Strong C5ISR, Missile, Radar, and Air-Defense DemandThe C5ISR missile, radar, air-defense, hypersonic systems, and counter-UAS hardware business recorded particularly strong Q3 bookings and is forecast to be one of the strongest performers in 2027. Management said numerous programs won in the prior three months are in or beginning production.
  • Space and OpenSpace Technology MilestonesKratos successfully demonstrated end-to-end connectivity across a native multi-vendor 5G NR-NTN network using OpenSpace, described as the industry’s first fully virtualized and software-defined satellite ground-system platform. The space and satellite business is expected to be one of the company’s strongest performers, including internationally and commercially.
  • Large Space and Laser Program OpportunitiesManagement said the space business has won several multi-hundred-million-dollar new programs and has major, well-funded program wins. A large new laser weapon-system program with the Department of Energy is ramping and is expected to be a significant 2027 driver.
  • International Microwave Electronics StrengthThe microwave electronics business in Israel was described as a solid Q3 performer with the Israeli Ministry of Defense, Rafael, Israel Aerospace Industries, and Elbit. Management expects the business to remain solid next year and said it is not tied to the U.S. budget.
  • Prometheus Energetics ProgressPrometheus Energetics is tracking toward first fire of an energetic in late 2027 and production in late 2027 or early 2028. Kratos has received second-source status on a significant program and is partnering with Rafael, whose systems and processes are already qualified.
  • Manufacturing Automation and Capacity InvestmentsKratos is investing in computerized and automated factories, robotics, additive manufacturing, 3D printing, machinery, equipment, and production facilities across microwave products, rocket systems, hypersonics, and jet engines. The company is also building the Anaconda radar facility and Helios hypersonic facility, each tied to identified customer or program needs.
  • Capitalization and Acquisition StrategyManagement said Kratos is fully capitalized and does not expect additional capital raises for the foreseeable future. The company is focused on internal execution and expects no significant acquisitions, while continuing to pursue small tuck-in acquisitions in areas such as missiles, drones, microwave electronics, and propulsion.
  • Jetset Airmotive Tuck-In AcquisitionThe Jetset Airmotive acquisition adds engine and propulsion capabilities, a new customer set, and inventory of engines, parts, and subsystems at a favorable cost, according to management.
  • Long-Term Cash-Flow PlanManagement expects the company to become substantially larger and cash-flow positive by 2029. It said the production and shipment lines are expected to cross the investment line in 2029 as production ramps across multiple programs.
  • No Reconciliation Funding Required for Base 2027 ObjectivesManagement said Kratos does not need a reconciliation bill to achieve its 2027 objectives, assuming no material changes to the $1.15 trillion 2027 NDAA. A reconciliation bill of approximately $150 billion-$200 billion or more, combined with an appropriation by March 31, was described as potential upside.
  • Potential Elroy Air ProductionKratos can build a handful of initial Elroy Air unmanned hybrid aircraft in Sacramento today. If the program enters production next year, the current plan is to produce in California.

DE:WF5A Earnings History

DE:WF5A earnings history
Report DateFiscal QuarterForecast / EPSLast Year's EPSEPS YoY ChangePress Release
Feb 25, 20272026 (Q4)0.21-0.16――
Nov 05, 20262026 (Q3)0.190.220.1371.43% (+0.09)
Aug 04, 20262026 (Q2)0.130.190.190.91% (+0.09)
May 06, 20262026 (Q1)0.120.140.1133.33% (+0.04)
Feb 23, 20262025 (Q4)0.140.160.1238.46% (+0.05)
Nov 04, 20252025 (Q3)0.110.130.127.27% (+0.03)
Aug 07, 20252025 (Q2)0.090.100.13-21.43% (-0.03)
May 07, 20252025 (Q1)0.080.110.19.09% (+0.01)
Feb 26, 20252024 (Q4)0.090.120.118.33% (+0.01)
Nov 07, 20242024 (Q3)0.080.100.11-8.33% (-0.01)

The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.

Beat Missed