Kratos Defense & Security Solutions, Inc. 2025 Annual Report: Key Highlights for Investors

Overview

Kratos Defense & Security Solutions, Inc. (“Kratos” or the “Company”) has released its annual report for the fiscal year ended December 28, 2025. The report provides comprehensive insights into the Company’s financial position, strategic priorities, operational performance, and outlook. Below, we present the most significant points for shareholders and potential investors, including information that may impact the share price.

Key Financial Highlights

• Public Float: As of June 29, 2025, Kratos’ aggregate market value of voting and non-voting common equity held by non-affiliates was approximately \$6.5 billion, based on the NASDAQ Global Select Market closing price.
• Shares Outstanding: As of February 20, 2026, the Company had 170,329,158 shares of common stock outstanding.
• Research and Development Investment: R&D expenses were \$40.0 million in 2025, \$40.3 million in 2024, and \$38.4 million in 2023, reflecting a consistent and significant commitment to innovation.

Operational and Strategic Highlights

• Business Segments: Kratos operates in two reportable segments:
  • Kratos Government Solutions (KGS): Focused on defense and national security solutions.
  • Unmanned Systems: Focused on advanced drone and unmanned system technologies.
• Integrated Business Model: Kratos views its business as an integrated whole, leveraging technological synergies, skillsets, and assets across segments to maximize efficiency and innovation.
• Competitive Strengths: The Company identifies its rapid innovation culture, experienced leadership, and focus on affordability as key competitive advantages. Strategic investments are prioritized in high-growth areas, especially in satellite communications, electronic products, and unmanned systems.
• Intellectual Property: Kratos emphasizes ownership of critical intellectual property and being first-to-market as crucial to maintaining its competitive edge.

Regulatory and Governance Notes

• SEC Filings: Kratos is a well-known seasoned issuer and a large accelerated filer on the NASDAQ Global Select Market (trading symbol: KTOS).
• Internal Controls: The Company’s management assessment of the effectiveness of internal control over financial reporting has been attested to by its registered public accounting firm, with no material weaknesses reported.
• No Financial Restatements: The Company affirms that the financial statements included in the filing do not reflect corrections of errors or restatements requiring recovery analysis of incentive-based compensation.
• Regulatory Compliance: Kratos maintains a robust compliance program for environmental and foreign investment regulations, including adherence to the Foreign Investment Risk Review Modernization Act (FIRRMA) and Committee on Foreign Investment in the United States (CFIUS) requirements.

Risks and Forward-Looking Statements

• Forward-Looking Statements: The report contains forward-looking statements regarding future performance, capital expenditures, and market opportunities. These are subject to various risks and uncertainties, including macroeconomic factors, contract timing and cancellations, regulatory actions, cybersecurity threats, and competitive pressures.
• Risk Factors: Shareholders are advised to carefully review the Risk Factors section, as material risks may affect future results and share value.

Shareholder Information

• Annual Meeting and Proxy Statement: Items 10–14 of the Annual Report incorporate information by reference from Kratos’ definitive proxy statement for the 2026 Annual Meeting of Stockholders, to be filed within 120 days after the close of the fiscal year.
• SEC and Company Website: Financial reports, filings, and amendments are available free of charge on the Company’s investor relations website and via the SEC’s EDGAR system.

Potential Price-Sensitive Information

• The strong market capitalization and public float indicate significant investor interest and liquidity in Kratos shares.
• Continued high investment in R&D signals an ongoing commitment to innovation, which may drive future growth and earnings.
• No financial restatements or corrections have been noted, reducing concerns regarding historical financial reporting and management credibility.
• Robust compliance and internal control attestations may enhance investor confidence, especially in a sector with complex regulatory requirements.
• Shareholders should closely monitor risks outlined in the report, as any materialization of these risks could impact share value.

Conclusion

Kratos Defense & Security Solutions, Inc. enters 2026 with a robust financial position, continued strategic investment in high-growth technology areas, and a strong commitment to regulatory compliance and governance. Investors should remain mindful of the risks outlined; however, the Company’s focus on innovation, integrated operations, and market leadership positions it as a significant player in the defense technology sector.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should review the full Kratos Defense & Security Solutions, Inc. Annual Report and consult their own financial advisors before making investment decisions. The forward-looking statements included are subject to risks and uncertainties that may cause actual results to differ materially.

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