分组1 - Kratos (KTOS) reported quarterly earnings of $0.18 per share, exceeding the Zacks Consensus Estimate of $0.14 per share, and showing an increase from $0.13 per share a year ago, resulting in an earnings surprise of +28.57% [1] - The company achieved revenues of $345.1 million for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 5.13%, and up from $283.1 million year-over-year [2] - Kratos has consistently outperformed consensus EPS and revenue estimates over the last four quarters, indicating strong operational performance [2] 分组2 - The stock has gained approximately 26.6% since the beginning of the year, significantly outperforming the S&P 500's gain of 0.9% [3] - The current consensus EPS estimate for the upcoming quarter is $0.14 on revenues of $348.51 million, and for the current fiscal year, it is $0.73 on revenues of $1.6 billion [7] - The Aerospace - Defense Equipment industry, to which Kratos belongs, is currently ranked in the top 24% of over 250 Zacks industries, suggesting a favorable outlook for stocks in this sector [8]

Financial Data and Key Metrics Changes - The company achieved approximately 20% year-over-year organic revenue growth in Q4 2025, with a book-to-bill ratio of 1.3 to 1 and a record backlog of $1.573 billion [6][35] - Q4 2025 revenues were $345.1 million, exceeding the estimated range of $320 million to $330 million, with notable organic growth rates of 20% compared to Q4 2024 [35] - Adjusted EBITDA for Q4 2025 was $34.1 million, above the high end of the estimated range of $29 million to $34 million [36] Business Line Data and Key Metrics Changes - The Defense Rocket Support, Microwave Products, and Space Training and Cyber businesses reported organic revenue growth rates of 47.4%, 32.4%, and 22.7% respectively [36] - Unmanned Systems revenue increased by $7.4 million, or 12.1% organically, primarily driven by Valkyrie-related activity [36] - The space and satellite business achieved a record backlog of $600 million at the end of Q4 2025, with a book-to-bill ratio of 1.2 to 1 [19] Market Data and Key Metrics Changes - The U.S. Department of Defense has established a new acquisition model to expand munitions procurement, providing long-term demand signal certainty to the industry [20] - The global national security opportunity and funding environment for the industry has improved, with proposed future defense budget increases of approximately 50%, up to $1.5 trillion [7][8] - The company is positioned to benefit from a generational recapitalization of the defense industrial base, with expected increases in defense spending for the foreseeable future [8] Company Strategy and Development Direction - The company emphasizes being first to market with relevant products, focusing on affordability and rapid production capabilities [10][11] - Kratos is investing in expanding manufacturing and production facilities to meet existing and anticipated customer orders [38] - The strategy includes not paying dividends or buying back stock, but rather investing capital in rebuilding the defense industrial base [33] Management's Comments on Operating Environment and Future Outlook - Management believes the demand for military-grade hardware and software is increasing, with a strong growth trajectory expected [6][9] - The company anticipates that Q1 2026 will be the lowest revenue quarter, with expectations of ramping up throughout the year [7] - Management expressed confidence in achieving the previously communicated financial targets for 2026 and 2027 [7] Other Important Information - The company closed on a small tuck-in acquisition of Nomad Global Communication Solutions, focused on mobile command and control systems [34] - The anticipated acquisition of Orbit Technologies is expected to close by the end of Q1 2026, which will be included in future financial forecasts [41] Q&A Session Summary Question: Perspectives on defense tech valuations in the market - Management believes Kratos is the most valuable defense company in the industry and emphasizes a balanced business plan focused on organic growth and rebuilding the industrial base [51][52] Question: Partnership with Boom and customer backlogs - Management highlighted the expertise in industrial gas turbines and the aggressive movement in this area, indicating multiple companies are seeking assistance [53][54] Question: Exposure on ground and infrastructure equipment - Management noted significant supplier commitments with the Department of Defense, emphasizing the importance of long-term agreements for future business clarity [55][56] Question: CapEx peak and balance sheet comfort - Management indicated that the CapEx table presented is on the growth side and does not include potential government funding that may be received [60][61] Question: Potential for revenue growth and EBITDA generation - Management identified the hypersonic franchise as a key area for future growth and profitability, with significant demand expected [66]

Financial Data and Key Metrics Changes - The company achieved approximately 20% year-over-year organic revenue growth in Q4 2025, with a book-to-bill ratio of 1.3 to 1, and a record backlog of $1.573 billion [7] - Q4 2025 revenues were $345.1 million, exceeding the estimated range of $320 million-$330 million, with an organic growth rate of 20% compared to Q4 2024 [46] - Adjusted EBITDA for Q4 2025 was $34.1 million, above the high end of the estimated range of $29 million-$34 million [47] - Free cash flow used in operations for Q4 2025 was $100,000, after accounting for capital expenditures of $24.2 million [49] Business Line Data and Key Metrics Changes - The Unmanned Systems business saw a revenue increase of $7.4 million, or 12.1% organically, primarily driven by Valkyrie-related activity [47] - The Defense Rocket Support, Microwave Products, and Space Training and Cyber businesses reported notable year-over-year organic revenue growth rates of 47.4%, 32.4%, and 22.7% respectively [46] Market Data and Key Metrics Changes - Revenues generated from contracts with the U.S. federal government during Q4 were approximately 67%, including revenues from DOD and non-DOD federal government agencies [52] - The company has a record opportunity pipeline of $13.7 billion, indicating strong future demand [7] Company Strategy and Development Direction - The company emphasizes being first to market with relevant products, aligning with the U.S. Department of Defense's focus on delivering systems that meet current needs rather than future potential [10][12] - Kratos is investing in expanding manufacturing capabilities and production facilities to meet existing and anticipated customer orders [50] - The company does not pay dividends or buy back stock, instead opting to invest in the defense industrial base [12][45] Management's Comments on Operating Environment and Future Outlook - Management noted that the global national security opportunity and funding environment has improved, with expectations for increased defense budgets [8][9] - The company anticipates achieving its financial targets for 2026 and 2027, with Q1 2026 expected to be the lowest revenue quarter due to the impact of a government shutdown [8][53] - Management highlighted the significant demand for hypersonic systems and the expected ramp-up in related revenues [17][79] Other Important Information - The company has been selected by the Pentagon to develop hypersonic missiles and expects to double its hypersonic franchise revenues in 2026 [17] - Kratos has closed on a small acquisition of Nomad Global Communication Solutions, focusing on mobile command and control systems [45] Q&A Session Summary Question: Perspectives on defense tech valuations in the market - Management believes Kratos is the most valuable defense company and emphasizes a balanced business plan focused on organic growth and rebuilding the industrial base [63][64] Question: Partnership with Boom and customer backlogs - Management indicated that the industrial gas turbine area is becoming a priority, with multiple companies seeking assistance [65][66] Question: Exposure on ground and infrastructure equipment - Management confirmed that Kratos is a merchant supplier for various missile and radar systems, which is significant for future business [68][69] Question: CapEx peak and balance sheet comfort - Management stated that the CapEx table presented is on the growth side and does not include potential government funding [74] Question: Initiatives with the most potential for revenue growth - Management highlighted the hypersonic franchise as a key driver for future growth and profitability [79] Question: Marine Corps program for Valkyrie - Management explained the strategic decision to partner with Northrop Grumman as the prime contractor, which reduces risk and increases the probability of winning contracts [90][91]

Financial Data and Key Metrics Changes - The company achieved approximately 20% year-over-year organic revenue growth in Q4 2025, with a book-to-bill ratio of 1.3 to 1 and a record backlog of $1.573 billion [4] - Q4 2025 revenues were $345.1 million, exceeding the estimated range of $320 million-$330 million, with an organic growth rate of 20% compared to Q4 2024 [32] - Adjusted EBITDA for Q4 2025 was $34.1 million, above the high end of the estimated range of $29 million-$34 million [33] - Free cash flow used in operations for Q4 2025 was $100,000, after capital expenditures of $24.2 million [35] Business Line Data and Key Metrics Changes - The Defense Rocket Support, Microwave Products, and Space Training and Cyber businesses reported notable year-over-year organic revenue growth rates of 47.4%, 32.4%, and 22.7% respectively [33] - Unmanned Systems' revenue increased by $7.4 million, or 12.1% organically, primarily driven by Valkyrie-related activity [33] - The space and satellite business achieved a record backlog of $600 million at the end of Q4 2025, with a book-to-bill ratio of 1.2 to 1 [16] Market Data and Key Metrics Changes - The company noted a robust opportunity pipeline of $13.7 billion, with expectations for continued growth in defense spending driven by geopolitical factors [4][6] - The U.S. Department of Defense has established new acquisition models to expand munitions procurement, providing long-term demand certainty to the industry [17] - Revenues from contracts with the U.S. federal government accounted for approximately 67% of Q4 2025 revenues [37] Company Strategy and Development Direction - The company aims to be a leader in affordable military-grade hardware and software, focusing on rapid production and relevant systems for national security [6][8] - Kratos emphasizes internally funded investments ahead of government funding to enhance manufacturing capabilities and product relevance [8] - The company is committed to not paying dividends or buying back stock, instead investing in the defense industrial base [8][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2026 and 2027 financial targets, citing improvements in the national security funding environment [5] - The company anticipates a significant increase in defense budgets, with proposals for future budget increases of approximately 50% [5][6] - Management highlighted the urgency for relevant systems in the current geopolitical climate, indicating a shift towards wartime readiness [9] Other Important Information - The company has been selected by the Pentagon to develop hypersonic missiles, with expectations to double hypersonic franchise revenues in 2026 [11] - Kratos is expanding its hypersonic facilities and has received a Gauntlet award under the Department of War's Drone Dominance Program [28] - The acquisition of Nomad Global Communication Solutions is expected to enhance mobile command and control capabilities [31][92] Q&A Session Summary Question: Perspectives on defense tech valuations in the market - Management believes Kratos is the most valuable defense company and emphasizes a balanced business plan focused on organic growth and rebuilding the industrial base [48] Question: Partnership with Boom and Superpower IGT - Management highlighted expertise in industrial gas turbines and the aggressive market approach in this area [50] Question: Exposure on ground and infrastructure equipment for THAAD order - Management confirmed Kratos as a merchant supplier for ground infrastructure for various missile systems, indicating significant business potential [52] Question: CapEx peak and balance sheet comfort - Management indicated that the CapEx table reflects growth side investments and potential government funding is being pursued [58] Question: Most potential for revenue growth and EBITDA generation - Management identified the hypersonic franchise as a key growth driver, with significant demand expected [63] Question: Marine Corps program for Valkyrie - Management explained the strategic decision to partner with Northrop Grumman as the prime contractor, emphasizing risk reduction and profit margins [74]

Contracts and Revenue - Kratos has been awarded the largest contract in its history, the MACH-TB 2.0 contract, valued at $1.45 billion if all options are exercised over a five-year period[44]. - Approximately 69% of Kratos' 2025 revenue is derived from fixed-price contracts, with cost-plus-fee contracts and time and materials contracts representing approximately 27% and 4%, respectively[51]. - The company has a diverse base of key contracts, with no single contract representing more than 5% of its 2025 revenue, providing a stable revenue stream[51]. - Recent major contract awards include a $34.8 million contract for Valkyrie mission system integration and a $116.7 million contract for Advanced Fire Control Ground Infrastructure[52]. - Total backlog as of December 28, 2025, was approximately $1,573.4 million, up from $1,445.1 million in 2024, with $1,232.0 million funded in 2025[54]. - Revenue from U.S. Government customers accounted for approximately 68% of total revenues in 2025, consistent with 67% in 2024 and 69% in 2023[68]. - Funded backlog as of December 28, 2025, includes $1,232.0 million for 2025, reflecting appropriated funds authorized for expenditure[69]. - The company expects to recognize approximately 54.0% of the remaining total backlog as revenue in 2026, with an additional 20.0% in 2027[69]. Research and Development - The company’s focus on internally funding research and development positions it to be "first to market" in high-growth areas such as unmanned combat aerial vehicles and hypersonic systems[49]. - Research and development expenses were $40.0 million in 2025, $40.3 million in 2024, and $38.4 million in 2023, indicating a consistent investment in innovation[85]. Workforce and Talent - The company has a skilled workforce of approximately 4,300 employees, many of whom hold National Security clearances, enhancing its competitive position[55]. - The company has a workforce of approximately 4,300 employees across 14 countries, emphasizing the importance of talent acquisition and retention[78]. Strategic Focus and Innovation - The company’s strategy emphasizes affordability and rapid innovation, aligning with U.S. National Security priorities and the Department of Defense's focus on technology[34][38]. - The company has made a strategic decision to focus on products, systems, and technology areas rather than low-cost services, responding to changing market dynamics[84]. - The company is focused on expanding its customer base into areas with significant growth opportunities, leveraging its technology and past performance qualifications[62]. Cybersecurity and Compliance - The company’s cybersecurity program includes monitoring, detection, and protection measures, although it acknowledges that no system can guarantee absolute security against cyberattacks[75]. - The company has made significant investments in corporate infrastructure to enhance cybersecurity and comply with changing regulations, positioning itself for larger contract opportunities[65]. - Compliance with environmental laws is critical, with potential civil and criminal penalties for violations[98]. - The company has management programs in place to achieve compliance with applicable environmental laws and regulations[100]. Market Conditions and Risks - The competitive landscape includes major U.S. Government contractors and newer defense technology companies, with intense competition and long operating cycles being key characteristics of the industry[82]. - The market for electronic components is experiencing increased demand and a global shortage of semiconductors, impacting the supply chain and costs[97]. - The company has taken steps to mitigate sourcing risks by working closely with suppliers and stocking reserve materials[96]. - Inflation has increased during the reporting period and is expected to continue, potentially affecting operating results due to rising costs of materials and supplies[379]. - The company has decided not to hedge commodity price exposures as they are deemed immaterial[380]. Financial Position and Risks - The company has cash and cash equivalents of $560.6 million as of December 28, 2025, primarily invested in money market interest-bearing accounts[378]. - A hypothetical 10% adverse change in the average interest rate on cash investments would have had no material effect on net income for the year ended December 28, 2025[378]. - The company is exposed to interest rate risk, but a 1% change in the SOFR would not materially impact financial position and results of operations[376]. - Foreign currency exchange rate risk is related to receipts from customers and payments to suppliers, with a 10% appreciation or depreciation of the USD expected to have minimal impact on financial results[377].

Exhibit 99.1 Last Twelve Months Ended December 28, 2025, Consolidated Book to Bill Ratio of 1.1 to 1 and Bookings of $1.475 Billion Fiscal 2026 Base Case Revenue Forecast of $1.595 Billion to $1.675 Billion and Adjusted EBITDA Forecast of $157.0 million to $167.0 million or 9.9% to 10.0% of Revenue, including Recently Closed Nomad Global Communication Solutions Acquisition SAN DIEGO, CA, February 23, 2026 – Kratos Defense & Security Solutions, Inc. (Nasdaq: KTOS), a Technology, Hardware, Products, System an ...

Core Viewpoint - Kratos exceeded fourth-quarter estimates and anticipates nearly 20% sales growth for 2026, but weaker first-quarter guidance and high expectations have negatively impacted shares [1] Group 1 - Kratos reported better-than-expected results for the fourth quarter [1] - The company projects approximately 20% sales growth by 2026 [1] - First-quarter guidance is weaker than anticipated, contributing to share price pressure [1]

Core Insights - Kratos Defense & Security Solutions reported fourth quarter 2025 revenues of $345.1 million, reflecting a 21.9% growth compared to $283.1 million in the fourth quarter of 2024, with 20.0% organic growth [1][5][12] - The company achieved a consolidated book-to-bill ratio of 1.3 to 1 for the fourth quarter of 2025, with bookings totaling $438.3 million [1][12] - Full year 2025 revenues reached $1.347 billion, representing a 16.6% organic growth over $1.136 billion in 2024 [1][13] Financial Performance - Fourth quarter 2025 operating income was $8.2 million, with net income of $5.9 million, compared to $3.9 million in the same quarter of 2024 [2][4][13] - Adjusted EBITDA for the fourth quarter of 2025 was $34.1 million, up from $25.2 million in the fourth quarter of 2024 [2][40] - Full year 2025 adjusted EBITDA was $119.9 million, compared to $105.7 million in 2024 [13][40] Segment Performance - The Unmanned Systems (KUS) segment generated revenues of $68.5 million in Q4 2025, a 12.1% increase from $61.1 million in Q4 2024, with an operating income of $1.9 million [1][7][9] - The Government Solutions (KGS) segment reported revenues of $276.6 million in Q4 2025, reflecting a 22.2% organic growth from $222.0 million in Q4 2024, with an operating income of $17.3 million [1][9][10] Cash Flow and Working Capital - Cash flow generated by operations in Q4 2025 was $12.1 million, impacted by working capital requirements due to revenue growth [6] - Free cash flow used in operations for Q4 2025 was $0.1 million after capital expenditures of $24.2 million [6] Future Guidance - The company provided a fiscal 2026 revenue forecast of $1.595 billion to $1.675 billion, with an adjusted EBITDA forecast of $157.0 million to $167.0 million [2][22] - Expected organic revenue growth for fiscal 2026 is projected to be approximately 15% to 20% above the fiscal 2025 revenue [29] Strategic Positioning - The company is positioned to benefit from a generational recapitalization of the defense industrial base, with a record backlog of $1.573 billion and a bid and proposal pipeline of $13.7 billion [21][12] - Recent contract awards and anticipated production increases, particularly for the Valkyrie tactical drone, are expected to drive future revenue growth [21][23]

Core Viewpoint - Kratos Defense & Security Solutions and GE Aerospace have secured a $12.4 million contract with the U.S. Air Force to design the GEK1500 engine, aimed at enhancing performance and reducing costs for small Collaborative Combat Aircraft (CCA) [1][2]. Group 1: Contract and Engine Development - The contract focuses on completing the preliminary design of the GEK1500 engine, which is expected to meet high performance and cost targets [1]. - The GEK1500 engine is designed to provide 1,500 lbs of thrust and is intended for use in unmanned aerial systems, collaborative combat aircraft, and missiles [3]. - The development of the GEK1500 builds on the successful GEK800 engine program, utilizing lessons learned to improve thrust, power generation, and lifecycle costs [2][4]. Group 2: Strategic Collaboration - The partnership between Kratos and GE Aerospace is formalized through a teaming agreement that aims to advance propulsion technologies for affordable unmanned aerial systems and CCA-type aircraft [5]. - This collaboration enhances the companies' existing relationship and is based on a 2024 Memorandum of Understanding to develop cost-effective engines for unmanned platforms [5]. Group 3: Technological Advancements - Recent altitude testing of the GEK800 engine has demonstrated critical technologies that will enhance the performance of future systems, including increased range and decreased lifecycle costs [4]. - The GEK1500 engine design leverages the successful architecture of the GEK800 cruise missile engine, which is currently undergoing technical maturation [3]. Group 4: Company Backgrounds - Kratos has over 25 years of experience in developing small, affordable engines for UAS, drones, and missile platforms, while GE Aerospace brings a century of expertise in propulsion technology [7]. - GE Aerospace operates with an installed base of approximately 49,000 commercial and 29,000 military aircraft engines, emphasizing its leadership in aerospace propulsion [8].

Core Viewpoint - Kratos Defense & Security Solutions, Inc. is expected to report an increase in quarterly earnings and revenue for its fourth quarter, indicating positive financial performance [1]. Financial Performance - The company is projected to report earnings of 15 cents per share for the fourth quarter, an increase from 13 cents per share in the same period last year [1]. - The consensus estimate for quarterly revenue is $327.46 million, compared to $283.1 million a year earlier, reflecting a significant growth [1]. Recent Developments - On February 17, Kratos announced it was awarded a contract by Airbus Defence and Space to support the OmanSat-1 software-defined satellite [2]. - Following this announcement, Kratos Defense shares experienced a decline of 9.1%, closing at $96.08 [2].