Kratos Raises Outlook as Defense Backlog Grows

Suppliers to defense primes should watch Kratos's $2.65 billion backlog when planning orders and staffing.

Updated on Nov. 5, 2026 in Corporate Finance

Kratos Raises Outlook as Defense Backlog Grows

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Kratos Defense & Security reported third-quarter 2026 revenue of $471.80 million and adjusted earnings of 24 cents per share, up 35.7% year over year. The company also raised its full-year 2026 revenue outlook to $1.78 billion to $1.81 billion, a development that matters to operators selling into defense and national security supply chains.

Why it matters

Defense contractors and their suppliers are watching backlog and guidance closely because they signal how long government and prime-contractor demand will hold up. Kratos's $2.65 billion consolidated backlog and $15.5 billion bid and proposal pipeline indicate where sustained procurement is expected, which shapes hiring, capacity, and supplier planning for firms downstream.

Kratos posted $471.80 million in third-quarter revenue, up 35.7% from a year earlier, with a $2.65 billion consolidated backlog and $1.40 billion in cash and equivalents. It expects fourth-quarter revenue of $480 million to $510 million and guided fiscal 2027 revenue to $2.1 billion to $2.2 billion.

The players

Kratos Defense & Security Solutions (KTOS)

A U.S. defense technology company that builds unmanned systems, space and satellite hardware, and national security electronics, selling primarily to the Department of Defense and allied governments.

The details

Revenue growth of this size tells operators that Kratos is converting a large order book into recognized sales rather than relying on a single contract. The company's backlog and bid pipeline serve as a leading indicator: much of the revenue scheduled for the coming quarters is already contracted, which reduces forecasting uncertainty for suppliers. Kratos also guided adjusted EBITDA of $230 million to $240 million for fiscal 2027, giving subcontractors and vendors a benchmark for the scale of work the prime is planning to support.

Thursday, November 5, 2026: Kratos reported Q3 results after the market close.
Thursday, 5 p.m. ET: The earnings call discussing the quarter began.
Fourth quarter 2026: Expected revenue of $480 million to $510 million.
Fiscal 2027: Guided revenue of $2.1 billion to $2.2 billion.

Market Landscape

Kratos's raised outlook follows a backlog-driven growth pattern in which defense-technology primes convert booked awards into near-term revenue. The company's $15.5 billion bid and proposal pipeline positions it to keep pursuing large federal programs as the U.S. military-industrial base continues to expand its unmanned and space capabilities.

Suppliers and subcontractors to Kratos should plan around its guided fourth-quarter and fiscal 2027 revenue ranges when forecasting their own orders and staffing. Finance teams at firms that depend on defense primes should track backlog figures in future filings as an early signal of demand.

The takeaway

Kratos's backlog is the number to watch, because it is what converts into the guided revenue ahead. Operators in defense supply chains should review prime-contractor backlog and guidance in each quarterly filing before committing capacity or hiring.

What happens next

Kratos's fiscal 2027 guidance will be tested against its fourth-quarter 2026 results, which the company expects to land between $480 million and $510 million.