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10-K annual report · filed Feb 23, 2026

KRATOS DEFENSE & SECURITY SOLUTIONS, INC. (KTOS) FY2025 10-K Annual Report

KTOS overviewOriginal on SEC EDGAR
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KRATOS DEFENSE & SECURITY SOLUTIONS, INC. (KTOS) filed its fiscal 2025 10-K annual report with the SEC on Feb 23, 2026. It reported revenue of $1.3B (+18.5% year over year) and net income of $22M.

  • Top risk flagged: Risk of reduced U.S. Government funding due to budget constraints affecting defense spending

FY2025 key financial metrics · XBRL

Revenue
$1.3B
+18.5% YoY
Net income
$22M
+35.0% YoY
Operating margin
1.9%
−0.7 pp YoY
Gross margin
22.9%
−2.4 pp YoY
EPS (diluted)
$0.13
+18.2% YoY
ROE
1.1%
−0.1 pp YoY
Operating cash flow
−$42M
−184.7% YoY

Source: XBRL data from the KRATOS DEFENSE & SECURITY SOLUTIONS, INC. (KTOS) FY2025 10-K on SEC EDGAR. USD.

KRATOS DEFENSE & SECURITY SOLUTIONS, INC. FY2025 10-K analysis

AI summary of each section, grounded in the filing text

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

Generated from the filing text; verify against the original. How to read a 10-K

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