By Christopher Kuo

Kratos Defense & Security Solutions raised its outlook and logged a higher profit in the first quarter on growth in its government solutions segment and higher revenue from its Valkyrie drones.

The aerospace and defense company said Wednesday it now expects revenue of $1.70 billion to $1.76 billion, compared with previous guidance of $1.60 billion to $1.68 billion. Analysts polled by FactSet expect $1.67 billion of revenue.

For the second quarter, the company forecasts revenue of $400 million to $410 million. Wall Street expects revenue of $412 million.

Kratos posted first-quarter net income of $11.9 million, or 7 cents a share, compared with $4.5 million, or 3 cents a share, a year earlier.

Adjusted earnings came in at 16 cents a share. Analysts polled by FactSet were expecting 14 cents a share.

Revenue grew 23% to $371 million, beating the $345 million that Wall Street had forecast, according to FactSet.

Kratos' government solutions segment, which accounts for most of its top-line, recorded revenue growth 20% rising to $288.4 million, driven by gains across its defense and rocket support business, turbine technologies and microwave products businesses.

The company's unmanned systems business logged revenue of $82.6 million, up from $63.1 million a year earlier.

Kratos is making significant investments in inventory, property, plant, equipment and facilities, and the company is increasing staffing, the company said.

"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," Chief Executive Eric DeMarco said.

Write to Christopher Kuo at chris.kuo@wsj.com

(END) Dow Jones Newswires

May 06, 2026 16:47 ET (20:47 GMT)

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