KRATOS DEFENSE & SECURITY SOLUTIONS, INC. (KTOS) FY2025 10-K Annual Report
KRATOS DEFENSE & SECURITY SOLUTIONS, INC. (KTOS) 10-K annual report for fiscal year 2025, filed with SEC EDGAR on Feb 23, 2026. This page provides AI-powered analysis including business overview, management discussion & analysis (MD&A), risk factors, and key financial data such as revenue, net income, gross margin, operating margin, and return on equity (ROE) extracted from XBRL.
KRATOS DEFENSE & SECURITY SOLUTIONS, INC. FY2025 10-K Analysis
Business Overview
- • Core business model: Design, development, and manufacturing of technologically advanced defense products and services primarily for U.S. Government agencies
- • Emphasis on UAS and UGS markets, with US segment representing 21.7% of total revenue in 2025, targeting expansion to foreign governments and commercial customers
- • Increased risk exposure from new executive orders reinforcing government efficiency, acquisition process reforms, and potential limits on contractor compensation during underperformance
- • Dependence on key customers: U.S. Air Force and Navy accounted for 12.6% and 17.7% of revenue in 2025, highlighting revenue concentration risk
- • Noteworthy regulatory and supply chain risks including global semiconductor shortages and stringent government-approved supplier requirements impacting C5ISR business segment
Management Discussion & Analysis
- • Revenue $1,346.8M, up 18.5% YoY from $1,136.3M; KGS segment up $189.0M (21.8%), US segment up $21.5M (7.9%)
- • Gross margin 22.9% vs 25.3% prior year; KGS margin 24.4% vs 27.6%, US margin 17.4% vs 17.9%; margin declines from unfavorable mix and higher labor/material costs
- • Best segment: KGS revenue $1,054.8M, up $189.0M (21.8%); Worst margin: US segment 17.4%, down 0.5 pts YoY
- • Cash and equivalents $560.6M vs $329.3M; total debt zero vs $185.0M prior year; $555.9M net proceeds from public equity offering; no buybacks or dividends disclosed
- • Management cites risks: government shutdowns, funding uncertainty, inflation, supply chain disruption, labor shortages; expects increased defense spending from new legislation FY26
Risk Factors
- • Risk of reduced U.S. Government funding due to budget constraints affecting defense spending
- • Supply chain disruptions and inflation continuing to impact operations and industry costs
- • Legal contingencies with potential liability revisions under FASB ASC Topic 450 impacting financial results
- • Market risk from volatility increasing discount rates, affecting valuation of reporting units
- • Increased competitive threat from rising use of small business providers in U.S. Government contracts
KRATOS DEFENSE & SECURITY SOLUTIONS, INC. FY2025 Key Financial MetricsXBRL
Revenue
$1.3B
▲ +18.5% YoY
Net Income
$22M
▲ +35.0% YoY
Gross Margin
22.9%
▼ -241bp YoY
Operating Margin
1.9%
▼ -65bp YoY
Net Margin
1.6%
▲ +20bp YoY
ROE
1.1%
▼ -10bp YoY
Total Assets
$2.5B
▲ +26.5% YoY
EPS (Diluted)
$0.13
▲ +18.2% YoY
Operating Cash Flow
-$42M
▼ -184.7% YoY
Source: XBRL data from KRATOS DEFENSE & SECURITY SOLUTIONS, INC. FY2025 10-K filing on SEC EDGAR. All figures in USD.
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