Kratos Defense Q4 Earnings Beat Estimates, Revenues Rise Y/Y

Core Insights - Kratos Defense & Security Solutions, Inc. (KTOS) reported a fourth-quarter 2024 adjusted earnings of 13 cents per share, an increase of 8.3% from 12 cents in the prior-year quarter, and exceeded the Zacks Consensus Estimate by 44.4% [1][2] - The company achieved total revenues of $283.1 million in the fourth quarter, which was a 3.4% increase from $273.8 million in the previous year, although it fell short of the Zacks Consensus Estimate of $288 million by 1.8% [3] - For the full year 2024, total revenues reached $1.14 billion, up from $1.04 billion in 2023, aligning with the Zacks Consensus Estimate [4] Financial Performance - GAAP earnings for the fourth quarter were reported at three cents per share, compared to two cents in the fourth quarter of 2023 [2] - Selling, general and administrative expenses increased by 1.1% year over year, while research and development expenses surged by 32.5% [5] - Operating income for the fourth quarter was $3 million, a decline from $11.7 million in the same quarter last year [5] Segment Performance - Unmanned Systems segment net revenues improved by 10.3% year over year to $61.1 million [7] - Kratos Government Solutions segment net revenues increased by 1.6% to $222 million compared to the previous year [7] Operational Metrics - The consolidated book-to-bill ratio was reported at 1.5-1.0, with bookings totaling $434.2 million, and total backlog at the end of the fourth quarter was $1.45 billion, up from $1.29 billion at the end of the third quarter [6] Cash Flow and Debt - As of December 29, 2024, cash and cash equivalents totaled $329.3 million, a significant increase from $72.8 million as of December 31, 2023 [8] - Long-term debt decreased to $174.6 million from $219.3 million recorded at the end of 2023 [8] - Net cash flow from operating activities was $49.7 million in 2024, down from $65.2 million at the end of 2023 [8] Future Guidance - For the first quarter of 2025, KTOS projects revenues in the range of $285-$295 million, while the full-year 2025 revenue guidance is set between $1.26-$1.29 billion [9] - The Zacks Consensus Estimate for 2025 revenues is pegged at $1.28 billion, closely aligning with the company's mid-point guidance [9] - Operating cash flows for 2025 are expected to be between $50-$60 million, with free cash outflow projected at $75-$85 million [10]