Revenue growth accelerated to 22.6% in 2026Q1, yet structural margin pressure remains evident as gross margins compressed to 9.4% from historical levels exceeding 20%.
| 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 |
|---|
| Sales/Revenue | 1.42B | 1.35B | 1.14B | 1.04B | 898.3M | 811.5M | 747.7M | 717.5M | 618M | 751.9M | 668.7M | 657.1M | 868M | 950.6M | 969.2M | 723.1M | 408.5M | 147.12M | 297.3M | 193.6M | 327.8M | 375.3M | 397M | 262.2M | 187M | 207.2M | 255.9M | 92.69M | 51.9M |
| Revenue Growth % | 21.82% | 18.52% | 9.57% | 15.45% | 10.7% | 8.53% | 4.21% | 16.1% | -17.81% | 12.44% | 1.77% | -24.3% | -8.69% | -1.92% | 34.03% | 77.01% | 177.66% | -50.51% | 53.56% | -40.94% | -12.66% | -5.47% | 51.41% | 40.21% | -9.75% | -19.03% | 176.08% | 78.59% | - |
| Cost of Goods Sold | 1.16B | 1.05B | 849.1M | 768.5M | 672.3M | 586.4M | 544.5M | 527.5M | 448.3M | 554.6M | 515.1M | 495.3M | 649.8M | 710.6M | 712M | 530.9M | 318.5M | 122.39M | 237.8M | 162M | 274.3M | 291M | 313M | 190.9M | 138.7M | 141M | 139.7M | 51.66M | 26.7M |
| COGS % of Revenue | - | 77.85% | 74.72% | 74.1% | 74.84% | 72.26% | 72.82% | 73.52% | 72.54% | 73.76% | 77.03% | 75.38% | 74.86% | 74.75% | 73.46% | 73.42% | 77.97% | 83.19% | 79.99% | 83.68% | 83.68% | 77.54% | 78.84% | 72.81% | 74.17% | 68.05% | 54.59% | 55.73% | 51.45% |
| Gross Profit | 259.4M | 298.3M | 287.2M | 268.6M | 226M | 225.1M | 203.2M | 190M | 169.7M | 197.3M | 153.6M | 161.8M | 218.2M | 240M | 257.2M | 192.2M | 90M | 24.73M | 59.5M | 31.6M | 53.5M | 84.3M | 84M | 71.3M | 48.3M | 66.2M | 116.2M | 41.03M | 25.2M |
| Gross Margin % | 18.33% | 22.15% | 25.27% | 25.9% | 25.16% | 27.74% | 27.18% | 26.48% | 27.46% | 26.24% | 22.97% | 24.62% | 25.14% | 25.25% | 26.54% | 26.58% | 22.03% | 16.81% | 20.01% | 16.32% | 16.32% | 22.46% | 21.16% | 27.19% | 25.83% | 31.95% | 45.41% | 44.27% | 48.55% |
| Gross Profit Growth % | - | 3.86% | 6.92% | 18.85% | 0.4% | 10.78% | 6.95% | 11.96% | -13.99% | 28.45% | -5.07% | -25.85% | -9.08% | -6.69% | 33.82% | 113.56% | 263.92% | -58.44% | 88.29% | -40.93% | -36.54% | 0.36% | 17.81% | 47.62% | -27.04% | -43.03% | 183.2% | 62.82% | - |
| Operating Expenses | 277M | 270.6M | 258.2M | 237.5M | 228.9M | 197.2M | 173.9M | 152M | 135.4M | 178.4M | 160.2M | 166.9M | 196.4M | 214.4M | 210.9M | 151.5M | 63.8M | 12.59M | 154.3M | 56.2M | 84.9M | 67.2M | 76.9M | 49.1M | 103M | 137.7M | 64.2M | 23.4M | 14.5M |
| OpEx % of Revenue | - | 20.09% | 22.72% | 22.9% | 25.48% | 24.3% | 23.26% | 21.18% | 21.91% | 23.73% | 23.96% | 25.4% | 22.63% | 22.55% | 21.76% | 20.95% | 15.62% | 8.56% | 51.9% | 29.03% | 25.9% | 17.91% | 19.37% | 18.73% | 55.08% | 66.46% | 25.09% | 25.24% | 27.94% |
| Selling, General & Admin | 239.4M | 230.6M | 214M | 197.8M | 182.8M | 160.2M | 144.5M | 130.8M | 110.9M | 147.5M | 132.6M | 134.8M | 146.9M | 153M | 193.1M | 142.5M | 63M | 52.8M | 51.7M | 53.5M | 63M | 69.3M | 76.9M | 42.3M | 74.1M | 103.2M | 53.5M | 20.79M | 13.1M |
| SG&A % of Revenue | - | 17.12% | 18.83% | 19.07% | 20.35% | 19.74% | 19.33% | 18.23% | 17.95% | 19.62% | 19.83% | 20.51% | 16.92% | 16.1% | 19.92% | 19.71% | 15.42% | 35.89% | 17.39% | 27.63% | 19.22% | 18.47% | 19.37% | 16.13% | 39.63% | 49.81% | 20.91% | 22.43% | 25.24% |
| Research & Development | 40.7M | 40M | 40.3M | 38.4M | 38.6M | 35.2M | 27M | 18M | 15.6M | 17.8M | 13.9M | 16.2M | 23M | 21.4M | 17.8M | 9M | 2.2M | 1.8M | 1M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| R&D % of Revenue | - | 2.97% | 3.55% | 3.7% | 4.3% | 4.34% | 3.61% | 2.51% | 2.52% | 2.37% | 2.08% | 2.47% | 2.65% | 2.25% | 1.84% | 1.24% | 0.54% | 1.22% | 0.34% | - | - | - | - | - | - | - | - | - | - |
| Other Operating Expenses | -800K | 0 | 3.9M | 1.3M | 7.5M | 1.8M | 2.4M | 3.2M | -1M | 900K | 800K | -700K | 600K | 0 | 0 | 0 | -1.4M | -200K | 101.6M | 2.7M | 21.9M | -2.1M | 0 | 6.8M | 28.9M | 34.5M | 10.7M | 2.61M | 1.4M |
| Operating Income | 25.8M | 27.7M | 29M | 31.1M | -2.9M | 27.9M | 29.3M | 38M | 30.5M | -5.8M | -18.6M | -4.5M | 19.9M | 31.8M | -49.7M | 28.2M | 23.1M | 12.14M | -94.8M | -24.6M | -31.4M | 17.1M | 7.1M | 22.2M | -54.7M | -71.5M | 52M | 17.63M | 10.7M |
| Operating Margin % | 1.82% | 2.06% | 2.55% | 3% | -0.32% | 3.44% | 3.92% | 5.3% | 4.94% | -0.77% | -2.78% | -0.68% | 2.29% | 3.35% | -5.13% | 3.9% | 5.65% | 8.25% | -31.89% | -12.71% | -9.58% | 4.56% | 1.79% | 8.47% | -29.25% | -34.51% | 20.32% | 19.02% | 20.62% |
| Operating Income Growth % | - | -4.48% | -6.75% | 1172.41% | -110.39% | -4.78% | -22.89% | 24.59% | 625.86% | 68.82% | -313.33% | -122.61% | -37.42% | 163.98% | -276.24% | 22.08% | 90.22% | 112.81% | -285.37% | 21.66% | -283.63% | 140.85% | -68.02% | 140.59% | 23.5% | -237.5% | 194.91% | 64.79% | - |
| EBITDA | 71.7M | 87M | 80.9M | 75.8M | 38M | 62.6M | 63.3M | 73.1M | 48.3M | 16.4M | 4.2M | 21M | 59M | 85.2M | 8.3M | 76.2M | 36M | 14.32M | -87.3M | -20.3M | -24.4M | 25.1M | 14.5M | 31M | -45.3M | -49M | 62.7M | 20.24M | 12.1M |
| EBITDA Margin % | 5.07% | 6.46% | 7.12% | 7.31% | 4.23% | 7.71% | 8.47% | 10.19% | 7.82% | 2.18% | 0.63% | 3.2% | 6.8% | 8.96% | 0.86% | 10.54% | 8.81% | 9.73% | -29.36% | -10.49% | -7.44% | 6.69% | 3.65% | 11.82% | -24.22% | -23.65% | 24.5% | 21.84% | 23.31% |
| EBITDA Growth % | -12.13% | 7.54% | 6.73% | 99.47% | -39.3% | -1.11% | -13.41% | 51.35% | 194.51% | 290.48% | -80% | -64.41% | -30.75% | 926.51% | -89.11% | 111.67% | 151.38% | 116.4% | -330.05% | 16.8% | -197.21% | 73.1% | -53.23% | 168.43% | 7.55% | -178.15% | 209.71% | 67.31% | - |
| D&A (Non-Cash Add-back) | 45.9M | 59.3M | 51.9M | 44.7M | 40.9M | 34.7M | 34M | 35.1M | 17.8M | 22.2M | 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 |
| EBIT | 27.7M | 44.5M | 41.7M | 32.8M | -14.7M | 28.1M | 30.4M | 39.2M | 30.3M | -28M | -17.1M | -8.6M | 7.2M | 32M | -48.1M | 29.6M | 24.3M | -26.7M | -94.7M | -24.6M | -31.5M | 3.2M | 5.6M | 27.5M | -54.7M | -71.5M | 52M | 17.63M | 10.7M |
| Net Interest Income | 3.4M | 5M | -3M | -20.5M | -17.7M | -23.4M | -22.8M | -21.6M | -20.8M | -28.6M | -34.7M | -36M | -39.2M | -46.2M | -66.1M | -51.1M | -22.3M | -10.4M | -10M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Income | 7.9M | 15.5M | 12.2M | 1.2M | 600K | 300K | 800K | 1.9M | 800K | 500K | 0 | 0 | 200K | 200K | 300K | 100K | 100K | 26.38K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Expense | 4.5M | 10.5M | 15.2M | 21.7M | 18.3M | 23.7M | 23.6M | 23.5M | 21.6M | 29.1M | 34.7M | 36M | 39.4M | 46.4M | 66.4M | 51.2M | 22.4M | 1.56M | 10M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Income/Expense | 12.6M | 6.3M | -2.5M | -20M | -30.1M | -23.5M | -22.5M | -22.3M | -21.8M | -45.1M | -34.3M | -40.1M | -78.2M | -46.6M | -64.5M | -52.3M | -22.9M | -10.3M | -11.5M | -2.3M | -700K | -13.6M | -2.8M | -8.3M | 1M | -3.6M | 100K | -824K | -500K |
| Pretax Income | 38.4M | 34M | 26.5M | 11.1M | -33M | 4.4M | 6.8M | 15.7M | 8.7M | -50.8M | -52.3M | -44.6M | -72.9M | -31.9M | -114.5M | -22.8M | 1.9M | 10.6M | -106.3M | -26.9M | -32.2M | 16.8M | 4.7M | 23.5M | -53.7M | -75.1M | 52.1M | 16.81M | 10.2M |
| Pretax Margin % | 2.71% | 2.52% | 2.33% | 1.07% | -3.67% | 0.54% | 0.91% | 2.19% | 1.41% | -6.76% | -7.82% | -6.79% | -8.4% | -3.36% | -11.81% | -3.15% | 0.47% | 7.21% | -35.76% | -13.89% | -9.82% | 4.48% | 1.18% | 8.96% | -28.72% | -36.25% | 20.36% | 18.13% | 19.65% |
| Income Tax | 9M | 12M | 10.2M | 8.7M | 200K | 3.9M | -73.5M | 4.8M | 4.6M | -8.2M | 8.1M | -11.4M | 5.1M | 69M | -1.6M | 1.9M | -12.7M | 5.1M | -700K | 1.3M | 14.5M | 5.4M | -2.7M | -1.3M | 10.1M | -15M | 20.3M | 7.2M | 5.5M |
| Effective Tax Rate % | 23.44% | 35.29% | 38.49% | 78.38% | -0.61% | 88.64% | -1080.88% | 30.57% | 52.87% | 16.14% | -15.49% | 25.56% | -7% | -216.3% | 1.4% | -8.33% | -668.42% | 48.12% | 0.66% | -4.83% | -45.03% | 32.14% | -57.45% | -5.53% | -18.81% | 19.97% | 38.96% | 42.85% | 53.92% |
| Net Income | 29.4M | 22M | 16.3M | -8.9M | -36.9M | -2M | 79.6M | 12.5M | -3.5M | -42.7M | -60.5M | 19.8M | -78M | -37.2M | -114.4M | -24.2M | 14.5M | 7.17M | -111.1M | -40.8M | -57.9M | 3.7M | 5M | 23.5M | -63.9M | -60.1M | 31.8M | 9.61M | 4.7M |
| Net Margin % | 2.08% | 1.63% | 1.43% | -0.86% | -4.11% | -0.25% | 10.65% | 1.74% | -0.57% | -5.68% | -9.05% | 3.01% | -8.99% | -3.91% | -11.8% | -3.35% | 3.55% | 4.88% | -37.37% | -21.07% | -17.66% | 0.99% | 1.26% | 8.96% | -34.17% | -29.01% | 12.43% | 10.36% | 9.06% |
| Net Income Growth % | 50.77% | 34.97% | 283.15% | 75.88% | -1745% | -102.51% | 536.8% | 457.14% | 91.8% | 29.42% | -405.56% | 125.38% | -109.68% | 67.48% | -372.73% | -266.9% | 102.15% | 106.46% | -172.3% | 29.53% | -1664.86% | -26% | -78.72% | 136.78% | -6.32% | -288.99% | 231.03% | 104.39% | - |
| Net Income (Continuing) | 29.4M | 22M | 16.3M | 2.4M | -33.2M | 500K | 80.3M | 10.9M | 4.1M | -46.9M | -57.6M | -33.2M | -75.7M | -29.5M | -112.9M | -23.5M | 14.6M | -38.3M | -104M | -28.2M | -46.7M | 11.3M | 3.4M | 14.3M | -63.9M | -60.1M | 31.8M | 9.61M | 4.7M |
| Discontinued Operations | 0 | 0 | 0 | 200K | 900K | -2.1M | -900K | 1.7M | 0 | 4.2M | 0 | 53M | 0 | -5.3M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 9.4M | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 22.5M | 11.2M | 15.2M | 14.8M | 15M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 300K | 300K | 300K | 200K | 100K | 337.9K | 0 |
| EPS (Diluted) | 0.16 | 0.13 | 0.11 | -0.07 | -0.29 | -0.02 | 0.67 | 0.11 | -0.03 | -0.48 | -0.99 | 0.34 | -1.35 | -0.65 | -2.44 | -0.88 | 0.86 | -2.99 | -11.95 | -5.51 | -7.88 | 0.20 | 2.20 | 0.30 | -13.28 | -13.09 | 6.30 | 2.70 | 1.50 |
| EPS Growth % | 33.92% | 18.18% | 257.14% | 75.86% | -1350% | -102.99% | 509.09% | 433.33% | 93.13% | 51.52% | -391.18% | 125.19% | -107.69% | 73.36% | -177.27% | -202.33% | 128.76% | 74.98% | -116.88% | 30.08% | -4040% | -90.91% | 633.33% | 102.26% | -1.45% | -307.78% | 133.33% | 80% | - |
| EPS (Basic) | - | 0.13 | 0.11 | -0.07 | -0.29 | -0.02 | 0.69 | 0.12 | -0.03 | -0.48 | -0.99 | 0.34 | -1.35 | -0.66 | -2.44 | -0.88 | 0.87 | -2.99 | -11.95 | -5.51 | -7.88 | 0.20 | 2.20 | 0.30 | -13.28 | -13.09 | 7.60 | 3.30 | 1.70 |
| Diluted Shares Outstanding | 179.4M | 173.05M | 150.9M | 130.4M | 126.7M | 128M | 118.7M | 109.2M | 106.1M | 89.5M | 61.3M | 58.7M | 57.6M | 56.8M | 46.9M | 27.4M | 16.9M | 13.9M | 9.3M | 7.4M | 7.35M | 7.5M | 6.77M | 6.84M | 4.81M | 4.59M | 5.05M | 3.52M | 3.07M |
| Basic Shares Outstanding | 176.8M | 172.25M | 149M | 130.4M | 126.7M | 124.6M | 115.5M | 106M | 103.8M | 89.5M | 61.28M | 58.7M | 57.6M | 56.73M | 46.85M | 27.4M | 16.6M | 13.9M | 9.3M | 7.4M | 7.35M | 7.4M | 6.77M | 6.84M | 4.81M | 4.59M | 4.18M | 2.91M | 2.84M |
| Dividend Payout Ratio | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
Contractual Margin Compression Risk
As reported in recent financial filings, KTOS achieved a 22.6% year-over-year revenue growth in 2026Q1, signaling a potential acceleration in top-line momentum as the company moves from development-heavy phases toward broader deployment of its unmanned aerial systems and satellite ground station software solutions across defense channels.
The recent revenue uptick suggests that the company is successfully converting its long-standing IRAD investments into tangible contract volume. Investors should monitor whether this growth trajectory remains sustainable or if it is merely a reflection of lumpy, project-based milestone recognition typical of the defense sector.
Based on the provided income statement data, gross margins contracted significantly to 9.4% in 2026Q1, a sharp departure from the 20% to 26% range observed in previous quarters, which may indicate rising production costs or unfavorable shifts in the underlying mix of government contract work.
This margin compression warrants further investigation into whether the company is facing supply chain inefficiencies or if it is aggressively pricing its attritable systems to secure market share. The volatility in gross profitability suggests that the company has yet to achieve the economies of scale necessary for consistent margin expansion.
According to historical income statements, operating margins have remained thin at approximately 1.3% in 2026Q1, suggesting that KTOS has struggled to scale its operating income proportionally with revenue growth due to persistent SG&A expenses and the ongoing costs associated with maintaining a specialized defense manufacturing footprint.
The inability to drive significant operating leverage implies that the company's cost structure is heavily weighted toward fixed overheads that do not easily flex with revenue fluctuations. This suggests that future profitability gains are highly dependent on achieving a critical mass of production that has not yet materialized.
Financial data indicates that while revenue is growing, the reliance on low-margin hardware production poses a risk, as evidenced by the 2026Q1 gross margin drop, which may validate concerns that the attritable drone model lacks the lucrative long-term sustainment tail found in traditional, exquisite defense platforms.
Short-sellers may focus on the potential for continued margin erosion if the company is forced to compete on price against well-funded, software-first entrants. The current income statement profile suggests that the market's growth expectations may be disconnected from the reality of the company's thin, hardware-dependent operating margins.
Quick answers to the most common questions about buying KTOS stock.
For fiscal year 2025, Kratos Defense & Security Solutions, Inc. (KTOS) reported total revenue of $1.35B. This represents a 2495.0% increase compared to $51.9M in 1998.
Kratos Defense & Security Solutions, Inc. (KTOS) is profitable, generating $22.0M in net income for the fiscal year ending 2025 with a net profit margin of 1.6%.
Kratos Defense & Security Solutions, Inc. (KTOS) reported an operating income of $27.7M, resulting in an operating profit margin of 2.1%. This margin reflects the operational efficiency of the business before interest and taxes.
Kratos Defense & Security Solutions, Inc. (KTOS) generated $298.3M in gross profit for the year, representing a gross profit margin of 22.1%. This demonstrates the company's core pricing power and production efficiency.