It has been about a month since the last earnings report for Kratos (KTOS). Shares have lost about 13.7% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Kratos due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Kratos Defense Q2 Earnings and Revenues Outpace Estimates

Kratos Defense & Security Solutions, Inc. reported second-quarter 2026 adjusted earnings of 21 cents per share, which beat the Zacks Consensus Estimate of 13 cents by 61.5%. The bottom line also increased 90.9% from the year-ago quarter's 11 cents.

Kratos Defense reported GAAP earnings of 2 cents per share, which came in line with the year-ago quarter.

KTOS' Revenue Growth Accelerates

Revenues of $458.8 million beat the consensus estimate of $412 million by 11.4% and increased 30.5% year over year. Kratos Government Solutions led the growth, while total organic revenues advanced 19.1%.

Product sales climbed 33.5% year over year to $289.1 million. Service revenues increased 25.8% to $169.7 million.

Operational Update of Kratos Defense

Selling, general and administrative expenses jumped 35.5% to $73.3 million. Research and development expenses rose 33.3% to $13.6 million.

Amortization of intangible assets increased to $10.1 million from $2.8 million, while depreciation rose to $3.9 million from $3 million.

Kratos recorded an operating loss of $1.6 million against the operating income of $3.7 million a year earlier.

KTOS' Segmental Performance

Unmanned Systems: Revenues from this segment totaled $79.1 million compared with $73.2 million in the year-ago quarter. The increase was primarily driven by Valkyrie-related activity.

Kratos Government Solutions: Revenues from this segment amounted to $379.7 million compared with $278.3 million in the year-ago quarter. This rise was due to organic revenue growth across its Defense and Rocket Support business, Turbine Technologies and Microwave Products and Space, Training and Cyber businesses, with organic revenue growth rates of 50.2%, 43.3%, 29.5% and 8.7%, respectively, year over year.

Financial Details of KTOS

As of June 28, 2026, cash and cash equivalents totaled $1.44 billion, up from $0.56 billion as of Dec. 28, 2025.

The company reported other current liabilities of $19.9 million as of June 28, 2026 compared with $9 million recorded as of Dec. 28, 2025.

The net cash used in operating activities amounted to $38.4 million during the first six months of 2026 compared with $40.9 million in the same period of 2025.