A premier US manufacturer of fixed-wing and rotary-wing unmanned aircraft systems delivering high-endurance ISR solutions to the DoD and global defense sectors.
Investors should consider Kratos due to its commanding market share in the rapidly expanding autonomous systems sector and its proven ability to transition from prototype development to high-volume production. The absence of long-term debt combined with a massive cash hoard provides an enormous runway for R&D investment without the need for immediate dilutive financing.
Concerns persist regarding the company's negative operating cash flow of -$42.1M in 2025, which suggests that heavy capital expenditures or working capital changes are outpacing operational cash generation at this stage of growth. Additionally, high accounts receivable of $165.0M relative to revenue implies significant concentration risk with a single major customer base.
Kratos Defense & Security Solutions, Inc. is a leading US-based developer and manufacturer of advanced unmanned systems, including fixed-wing and rotary-wing drones, serving the Department of Defense and international commercial markets. The company specializes in high-endurance tactical aircraft designed for ISR (Intelligence, Surveillance, Reconnaissance) missions and has demonstrated consistent top-line growth over recent years. With a strong balance sheet featuring substantial cash reserves and no long-term debt, Kratos is well-positioned to fund its research and development pipeline while maintaining financial flexibility.
Financial performance reflects a robust growth trajectory with revenue climbing from $898.3M in 2022 to $1.35B in 2025, driven by successful program wins and scaling production capabilities. Net income has stabilized and expanded from a loss of $33.2M in 2022 to $22.0M in 2025, while the company strengthened its liquidity position with ending cash of $560.6M and zero long-term debt.
The global defense and security UAV market is experiencing rapid expansion driven by the strategic shift towards autonomy in modern warfare and persistent surveillance requirements from both government and commercial entities. Competitors in this space are under pressure to deliver lower-cost, higher-endurance platforms while managing complex integration with existing military logistics networks.
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $898.3M | $1.04B | $1.14B | $1.35B |
| Cost of Revenue | $672.3M | $768.5M | $849.1M | $1.04B |
| Gross Profit | $226.0M | $268.6M | $287.2M | $307.9M |
| Operating Expenses | $228.6M | $237.5M | $258.2M | $282.3M |
| Operating Income | $-2.6M | $31.1M | $29.0M | $25.6M |
| R&D | $38.6M | $38.4M | $40.3M | $40.0M |
| G&A | $182.5M | $197.8M | $214.0M | $240.2M |
| Stock-Based Comp | $26.3M | $25.3M | $29.8M | $35.5M |
| D&A | $30.5M | $33.2M | $40.3M | $47.1M |
| Amortization | $7.4M | $6.8M | $8.6M | $9.6M |
| Other OpEx | $7.5M | $1.3M | $3.9M | $2.1M |
| Non-Operating Income | $-30.1M | $-20.0M | $-2.5M | $8.4M |
| Interest Income | $600.0K | $1.2M | $12.2M | $15.5M |
| Pre-Tax Income | $-32.7M | $11.1M | $26.5M | $34.0M |
| Income Tax | $1.4M | $8.9M | $10.2M | $12.0M |
| Continuing Ops | $-34.1M | $2.2M | $16.3M | $22.0M |
| Discontinued Ops | $900.0K | $200.0K | $0 | $0 |
| Net Income | $-33.2M | $2.4M | $16.3M | $22.0M |
| Minority Interest | $3.7M | $11.3M | $0 | $0 |
| Net to Common | $-36.9M | $-8.9M | $16.3M | $22.0M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $582.6M | $594.2M | $872.1M | $1.26B |
| Cash & Equivalents | $81.3M | $72.8M | $329.3M | $560.6M |
| Accounts Receivable | $105.7M | $128.8M | $117.5M | $165.0M |
| Other Current Assets | $395.6M | $392.6M | $425.3M | $537.3M |
| Long-Term Assets | $968.9M | $1.04B | $1.08B | $1.20B |
| Intangibles | $55.2M | $62.4M | $53.8M | $53.9M |
| Goodwill | $558.2M | $569.1M | $568.9M | $595.7M |
| Operating Leases | $47.4M | $45.7M | $37.6M | $43.4M |
| Other LT Assets | $308.1M | $361.1M | $418.5M | $506.3M |
| Total Assets | $1.55B | $1.63B | $1.95B | $2.47B |
| Current Liabilities | $234.2M | $292.5M | $296.7M | $311.0M |
| Accounts Payable | $57.3M | $63.1M | $82.0M | $69.6M |
| Current Leases | $10.8M | $12.1M | $11.3M | $12.8M |
| Deferred Revenue | — | — | $76.3M | $73.4M |
| Other Current Liab | $132.3M | $181.9M | $88.3M | $94.7M |
| Long-Term Liabilities | $369.8M | $341.5M | $301.0M | $159.9M |
| Long-Term Debt | $250.2M | $219.3M | $174.6M | $0 |
| LT Operating Leases | $40.8M | $37.8M | $29.8M | $33.8M |
| Other LT Liab | $78.8M | $84.4M | $96.6M | $126.1M |
| Total Liabilities | $604.0M | $634.0M | $597.7M | $470.9M |
| Shareholders' Equity | $947.5M | $998.5M | $1.35B | $2.00B |
| Retained Earnings | $-671.3M | $-680.2M | $-663.9M | $-641.9M |
| AOCI | $-800.0K | $1.7M | $-500.0K | $2.1M |
| Total L&E | $1.55B | $1.63B | $1.95B | $2.47B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $-33.2M | $2.4M | $16.3M | $22.0M |
| Non-Cash Adjustments | $-71.5M | $-26.4M | $-200.0K | $-242.8M |
| Working Capital Changes | $79.0M | $89.2M | $33.6M | $178.7M |
| Cash from Operations | $-25.7M | $65.2M | $49.7M | $-42.1M |
| Cash from Investing | $-177.4M | $-43.8M | $-69.7M | $-88.3M |
| Debt Issuances | $200.0M | $0 | $0 | — |
| Cash from Financing | $-63.3M | $-30.7M | $277.6M | $360.7M |
| FX Effect | $-1.7M | $800.0K | $-1.1M | $1.0M |
| Net Change in Cash | $-268.1M | $-8.5M | $256.5M | $231.3M |
| Beginning Cash | $349.4M | $81.3M | $72.8M | $329.3M |
| Ending Cash | $81.3M | $72.8M | $329.3M | $560.6M |
Primary revenue streams include Fixed Wing UAVs (such as the XQ-58A Valkyrie and Scan Eagle) which dominate the tactical reconnaissance market, Rotary Wing UAVs for persistent surveillance missions, and associated mission payload and services contracts that provide recurring revenue opportunities.
The company faces significant exposure to US Department of Defense budget fluctuations and potential delays in contract award cycles, vulnerability to geopolitical instability that could disrupt international commercial sales, and supply chain constraints regarding specialized aerospace materials and components.
Kratos possesses a robust 'fly-before-you-buy' technology validation program that significantly de-risks procurement for government clients, a proprietary supply chain that mitigates semiconductor shortages affecting the aerospace sector, and an agile engineering culture that accelerates time-to-market compared to legacy defense contractors.
Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.