Cash conversion remains challenged, as evidenced by a negative OCF/NI ratio of -2.39 and a $75.8 million working capital outflow during 2026Q1.
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 | Dec'10 | Dec'09 | Dec'08 | Dec'07 | Dec'06 | Dec'05 | Dec'04 | Dec'03 | Dec'02 | Dec'01 | Dec'00 | Dec'99 | Dec'98 |
|---|
| Cash from Operations | -41.4M | -42.1M | 49.7M | 65.2M | -25.7M | 30.8M | 46.6M | 30M | 18.1M | -27M | -12.4M | -29.7M | 6.1M | 21.3M | 53.6M | 2.7M | 28.3M | 6.21M | -5.8M | -900K | 4M | 7.3M | 8.5M | 8.2M | 33M | 5.2M | -38.3M | 13.44M | -3.9M |
| Operating CF Margin % | - | -3.13% | 4.37% | 6.29% | -2.86% | 3.8% | 6.23% | 4.18% | 2.93% | -3.59% | -1.85% | -4.52% | 0.7% | 2.24% | 5.53% | 0.37% | 6.93% | 4.22% | -1.95% | -0.46% | 1.22% | 1.95% | 2.14% | 3.13% | 17.65% | 2.51% | -14.97% | 14.5% | -7.51% |
| Operating CF Growth % | -722.43% | -184.71% | -23.77% | 353.7% | -183.44% | -33.91% | 55.33% | 65.75% | 167.04% | -117.74% | 58.25% | -586.89% | -71.36% | -60.26% | 1885.19% | -90.46% | 355.37% | 207.15% | -544.44% | -122.5% | -45.21% | -14.12% | 3.66% | -75.15% | 534.62% | 113.58% | -384.88% | 444.72% | - |
| Net Income | 29.4M | 22M | 16.3M | -8.9M | -36.9M | -1.6M | 79.4M | 12.5M | -3.5M | -42.7M | -60.5M | 19.8M | -78M | -37.2M | -112.9M | -24.7M | 14.6M | 7.17M | -111.1M | -40.8M | -57.9M | 11.4M | 7.4M | 23.5M | -63.9M | -60.1M | 31.8M | 9.61M | 4.7M |
| Depreciation & Amortization | 6.9M | 59.3M | 51.9M | 44.7M | 41.7M | 34.7M | 34M | 36.1M | 17.9M | 22.5M | 22.8M | 25.5M | 39.1M | 53.4M | 58M | 48M | 12.9M | 2.18M | 7.5M | 4.3M | 7M | 8M | 7.4M | 8.8M | 9.4M | 22.5M | 10.7M | 2.61M | 1.4M |
| Stock-Based Compensation | -8.7M | 0 | 29.8M | 25.3M | 26.3M | 25.8M | 21M | 11M | 7.2M | 7.8M | 5.1M | 6.1M | 3.8M | 7.4M | 6.6M | 3.3M | 1.9M | 1.7M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Deferred Taxes | 1.3M | 8.1M | 4.4M | 2.5M | 0 | -400K | -78.2M | 0 | -400K | -10.2M | 4.7M | -17.8M | 2.3M | -400K | -2.5M | -100K | -14.4M | 881K | -2M | 700K | 13.7M | 5.5M | -1.8M | 0 | 0 | -18.8M | 9.1M | -1.68M | 1.3M |
| Other Non-Cash Items | 100M | 36.5M | 700K | 12.8M | 26.4M | -1.6M | 3.8M | -1.4M | 10.4M | 43.7M | 13.4M | -46.2M | 41.3M | 5.9M | 101M | 2.2M | 4.4M | -3.04M | 109.9M | 8.8M | 32M | -10.5M | -1.5M | -1M | 41.4M | 36.5M | 16.1M | 341.45K | 100K |
| Working Capital Changes | -148.3M | -168M | -53.4M | -11.2M | -83.2M | -26.1M | -13.4M | -28.2M | -13.5M | -48.1M | 2.1M | -17.1M | -2.4M | -7.8M | 3.4M | -26M | 8.9M | -2.68M | -14.9M | 13.3M | -3.9M | -7.1M | -3M | -23.1M | 46.1M | 25.1M | -106M | 2.56M | -11.5M |
| Change in Receivables | -117.5M | -126M | 5.1M | 1.3M | -27.3M | 2.6M | -3.7M | -13.2M | 8.2M | -39.1M | -24.7M | 10.3M | 16.1M | 4.9M | 2.8M | -16.2M | 2.9M | -6.08M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Change in Inventory | -28.6M | -19.3M | -5M | -29.6M | -23.8M | -5.3M | -5.3M | -4.6M | 2M | 7.1M | -2.7M | -8.2M | 6.5M | 20M | -5.2M | 3.8M | -2.4M | -4.98M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Change in Payables | 48.2M | -13.7M | 15.1M | 4.4M | 0 | -5.3M | -2.4M | 0 | 12.2M | -3.4M | 2.9M | 2.9M | -13.5M | -22M | 25.6M | -16M | 8.7M | 5.1M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Cash from Investing | -430.8M | -88.3M | -69.7M | -43.8M | -177.4M | -52.1M | -87.3M | -43.7M | 40.5M | -25.8M | -13.9M | -5.7M | -17.2M | -12.7M | -165.1M | -395.6M | -209.2M | -1.51M | -2.4M | -17M | -57.5M | -52.1M | -43.5M | -42.9M | -3.7M | -5M | -14.7M | -42.94M | -4.6M |
| Capital Expenditures | 2.7M | -95.3M | -58.2M | -52.4M | -45.4M | -46.5M | -35.9M | -26.3M | -22.6M | -26.5M | -9.2M | -11.3M | -14.2M | -16.6M | -16.6M | -7.5M | -2.3M | -1.58M | -900K | -900K | -7.1M | -8M | -7.8M | -7.4M | -3.7M | -5M | -5.7M | -3.23M | -4.1M |
| CapEx % of Revenue | 0.19% | 7.08% | 5.12% | 5.05% | 5.05% | 5.73% | 4.8% | 3.67% | 3.66% | 3.52% | 1.38% | 1.72% | 1.64% | 1.75% | 1.71% | 1.04% | 0.56% | 1.08% | 0.3% | 0.46% | 2.17% | 2.13% | 1.96% | 2.82% | 1.98% | 2.41% | 2.23% | 3.48% | 7.9% |
| Acquisitions | -343.2M | 12M | -11.5M | 300K | -132.2M | -12.3M | -51.5M | -17.7M | -2.9M | 700K | -5.1M | 900K | -2.6M | 2.2M | -149.1M | -391.1M | -206.8M | -7.1M | -1.2M | -72.8M | -59.1M | -33.6M | -53.9M | 0 | 0 | 0 | -38.1M | -1.74M | 0 |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | -83.3M | 0 | 0 | 8.3M | 200K | 6.7M | 100K | 300K | 66M | 700K | 400K | 5.6M | -400K | 1.7M | 600K | 3M | -100K | 7.17M | -400K | 56.7M | 8.7M | -17.1M | -9.3M | -10.9M | 0 | 0 | 100K | -6.55K | -500K |
| Cash from Financing | 1.67B | 360.7M | 277.6M | -30.7M | -63.3M | -9.3M | 247.7M | 3.5M | 1.7M | 113.4M | 63.1M | -214.7M | -9.7M | -2M | 90.9M | 452.4M | 181.9M | -1.46M | 2.8M | 21.1M | 51.2M | 4.6M | 10.2M | 26.3M | 10.6M | 42.3M | 37.5M | 60.97M | 10.5M |
| Debt Issued (Net) | -184.8M | -186.8M | -43.9M | -33.5M | -53.7M | -6.1M | 3.9M | -500K | -800K | -149.8M | -15.1M | -217M | -13M | -1M | -2.2M | 423M | 167.3M | -26.7M | 2.6M | 24.1M | 50.7M | -400K | -500K | -3.2M | -39.2M | 1.6M | 24M | -16.36M | 5.3M |
| Equity Issued (Net) | 1.91B | 565.8M | 330.7M | 6.5M | -12.5M | 5.9M | 240.4M | -900K | 0 | 269.1M | 76.2M | 0 | 0 | 0 | 97M | 50.2M | 24.7M | 17.5M | 200K | 88.5M | 400K | 900K | 10.7M | 30.9M | 49.8M | 40.7M | 12.9M | 77.33M | 5.2M |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | -900K | 0 | 0 | 0 | -12.5M | 0 | 0 | -900K | -1.1M | 0 | 0 | 0 | 0 | 0 | 0 | -10.9M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -162K | -16.6M |
| Other Financing | -50.5M | -18.3M | -9.2M | -3.7M | 2.9M | -9.1M | 3.4M | 4.9M | 2.5M | -5.9M | 2M | 2.3M | 3.3M | -1M | -3.9M | -20.8M | -10.1M | 100K | 0 | -91.5M | -1.1M | 3.7M | 0 | -1.4M | 0 | 0 | 600K | 0 | 0 |
| Net Change in Cash | 1.2B | 231.3M | 256.5M | -8.5M | -268.1M | -32.1M | 208.9M | -10.4M | 52.1M | 60.5M | 40.6M | -5M | -21M | 6.7M | -20.6M | 59M | 900K | 3.25M | -5.4M | 3.2M | -2.3M | -39.1M | -24.7M | -9.5M | 38M | 42.6M | -15.8M | 31.46M | 2.1M |
| Free Cash Flow | -134M | -137.4M | -8.5M | 12.8M | -71.1M | -15.7M | 10.7M | 3.7M | -4.5M | -53.5M | -21.6M | -41M | -8.1M | 4.7M | 37M | -4.8M | 26M | 4.63M | -6.7M | -1.8M | -3.1M | -700K | 700K | 800K | 29.3M | 200K | -44M | 10.22M | -8M |
| FCF Margin % | -9.47% | -10.2% | -0.75% | 1.23% | -7.92% | -1.93% | 1.43% | 0.52% | -0.73% | -7.12% | -3.23% | -6.24% | -0.93% | 0.49% | 3.82% | -0.66% | 6.36% | 3.15% | -2.25% | -0.93% | -0.95% | -0.19% | 0.18% | 0.31% | 15.67% | 0.1% | -17.19% | 11.02% | -15.41% |
| FCF Growth % | -201.8% | -1516.47% | -166.41% | 118% | -352.87% | -246.73% | 189.19% | 182.22% | 91.59% | -147.69% | 47.32% | -406.17% | -272.34% | -87.3% | 870.83% | -118.46% | 461.33% | 169.13% | -272.22% | 41.94% | -342.86% | -200% | -12.5% | -97.27% | 14550% | 100.45% | -530.68% | 227.71% | - |
| FCF per Share | -0.75 | -0.79 | -0.06 | 0.10 | -0.56 | -0.12 | 0.09 | 0.03 | -0.04 | -0.60 | -0.35 | -0.70 | -0.14 | 0.08 | 0.79 | -0.18 | 1.54 | 0.33 | -0.72 | -0.24 | -0.42 | -0.09 | 0.10 | 0.12 | 6.09 | 0.04 | -8.71 | 2.90 | -2.60 |
| FCF Conversion (FCF/Net Income) | -4.56x | -1.91x | 3.05x | -7.33x | 0.70x | -15.40x | 0.59x | 2.40x | -5.17x | 0.63x | 0.20x | -1.50x | -0.08x | -0.57x | -0.47x | -0.11x | 1.95x | 0.87x | 0.05x | 0.02x | -0.07x | 1.97x | 1.70x | 0.35x | -0.52x | -0.09x | -1.20x | 1.40x | -0.83x |
| Interest Paid | 900K | 0 | 14.6M | 19.6M | 13.7M | 19.9M | 19.9M | 19.9M | 20.5M | 0 | 0 | 43.8M | 57.1M | 63.8M | 64M | 46.2M | 15.4M | 7.7M | 8.7M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 0 | 0 | 5M | 6.5M | 0 | 2M | 2.5M | 0 | 1.5M | 0 | 0 | 8.8M | 1.2M | 200K | 2.7M | 1.5M | 900K | 300K | 1.3M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Working Capital Consumption Risk
As reported in recent financial statements, KTOS exhibits a significant disconnect between net income and operating cash flow, with the company posting a negative OCF/NI ratio of -2.39 in 2026Q1, suggesting that reported earnings are not currently supported by actual cash generation from core operations.
The persistent gap between net income and operating cash flow indicates that the company's profitability is heavily reliant on non-cash accounting adjustments rather than realized cash inflows. Investors should monitor whether this divergence is a temporary byproduct of aggressive growth investments or a structural issue regarding the quality of earnings.
Based on the provided cash flow data, KTOS has struggled to maintain positive free cash flow, recording a negative $48.4 million in 2026Q1, which highlights the ongoing cash-intensive nature of scaling its unmanned aerial systems business amidst a transition toward higher-volume production cycles.
The erratic FCF trajectory suggests that the company remains in a capital-heavy development phase where cash outflows frequently outpace operational gains. This pattern warrants further investigation into whether the company can achieve sustainable cash flow positivity without continued reliance on external financing or equity dilution.
According to recent SEC filings, KTOS experienced a substantial working capital outflow of $75.8 million in 2026Q1, which appears to be the primary driver behind the quarter's negative operating cash flow and underscores the difficulty of managing liquidity during rapid program expansion.
The significant negative working capital changes suggest that the company is tying up substantial cash in inventory or unbilled receivables as it scales its defense programs. This trend implies that operational efficiency is currently being sacrificed to meet the delivery requirements of large-scale government contracts.
As indicated by the financial data, KTOS maintained a CapEx/Revenue ratio of 5.4% in 2026Q1, reflecting a consistent commitment to infrastructure and manufacturing capabilities necessary to support its specialized drone and microwave electronics production lines in a competitive defense environment.
The level of capital expenditure appears to be aligned with the company's strategy of self-funding development to maintain a technological edge. However, the high capital intensity relative to thin operating margins suggests that the company must eventually achieve significant scale to justify these ongoing investments.
Based on reported figures, KTOS has directed significant capital toward acquisitions, including a $343.2 million outlay in 2026Q1, while eschewing dividends and share repurchases to prioritize the expansion of its unmanned systems portfolio and technical capabilities within the defense sector.
The aggressive use of cash for acquisitions suggests that management is focused on inorganic growth to solidify its market position. Investors should monitor the return on these investments, as the lack of direct shareholder returns places the entire burden of value creation on the success of these acquired assets.
Quick answers to the most common questions about buying KTOS stock.
Kratos Defense & Security Solutions, Inc. (KTOS) generated $-42.1M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Kratos Defense & Security Solutions, Inc. (KTOS) reported negative free cash flow of $137.4M in 2025, indicating capital requirements exceeded cash from operations.
Kratos Defense & Security Solutions, Inc. (KTOS) spent $95.3M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.