Kratos Defense & Security Solutions Inc (NASDAQ:KTOS) reported financial results for the first quarter after the market close on Wednesday. Here’s a look at the key details from the report.

• Kratos Defense & Security stock is showing exceptional strength. Why are KTOS shares rallying?

Kratos Defense Q1 Key Metrics

Kratos reported first-quarter revenue of $371 million, beating analyst estimates of $339.84 million, according to Benzinga Pro. The defense company posted adjusted earnings of 16 cents per share for the quarter, beating estimates of 13 cents per share.

Total revenue was up 22.6% on a year-over-year basis. The company said it experienced 30.9% growth in its Unmanned Systems segment and 11.8% growth in its Government Solutions segment.

Kratos reported a consolidated backlog of $2.01 billion, and a bid and proposal pipeline of $14.3 billion at quarter's end. The company ended the period with $1.46 billion in total cash and cash equivalents.

“Kratos’ balanced business model, including making internally funded investments in property, plant, equipment and facilities, and the rapid development and fielding of relevant products for the Department of War, while generating growth and profitability, is accelerating as reflected in our Q1 results and 1.6 to 1.0 book-to-bill ratio,” said Eric DeMarco, president and CEO of Kratos.

“There is a generational recapitalization of the U.S. defense industrial base underway and Kratos is committed to doing its part to ensure that the Department and our country are successful.”

What’s Next For Kratos?

Kratos expects second-quarter revenue to be in the range of $400 million to $410 million versus Benzinga Pro estimates of $409.43 million. The company now expects full-year 2026 revenue to be in the range of approximately $1.70 billion to $1.76 billion, up from prior guidance of $1.595 billion to $1.675 billion. Analysts are looking for full-year revenue of $1.67 billion.

Kratos Defense executives will further discuss the quarter on an earnings call with investors and analysts at 5 p.m. ET.

KTOS Stock Slips After Hours

KTOS Price Action: Kratos Defense shares were down 1.04% in after-hours, trading at $60.88 at the time of publication on Wednesday, according to Benzinga Pro. The stock initially popped above $64 when earnings were first released.

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