Kratos Defense & Security Solutions, Inc. Q2 2026 Earnings Recap

Shares of Kratos Defense & Security Solutions gained 12.5% following earnings, driven by strong bookings, robust organic growth, and confident margin expansion despite foreign exchange headwinds.

Key Takeaways

• Last 12-month bookings totaled $1.99 billion with a book-to-bill ratio of 1.3:1, signaling continued demand strength and an expanding pipeline now valued at $15 billion.
• Organic revenue growth was 19.1% year-over-year in Q2, with full-year 2026 organic growth guidance raised to 19%-23%.
• EBITDA margins are improving and expected to continue expanding into 2027, supported by scaling production and operating leverage, even as the strong shekel weighs on Israeli operations profitability.
• New contract wins include hypersonic programs Kraken 1 & 2, Nemesis, a $160 million directed energy counter-UAS system, and a $100 million space domain awareness system, highlighting broad defense market penetration.
• Supply chain orders for 3,000 small turbojet engines ahead of 2027 production and progress on BladeWorks turbofan program position the engine segment for meaningful growth.