KRATOS DEFENSE & SECURITY SOLUTIONS, INC.KTOS
KRATOS DEFENSE & SECURITY SOLUTIONS, INC. Segments Disclosure
Segment Information
The Company operates in two reportable segments. The KGS reportable segment is comprised of an aggregation of KGS operating segments, including DRSS, ME, ST&C, MS, and KTT. The US reportable segment consists of the Company’s unmanned aerial, unmanned ground, unmanned seaborne and command, control and communications system products. The KGS and US segments provide products, solutions and services for mission critical National Security programs. KGS and US customers primarily include National Security related agencies, the DoW, intelligence agencies and classified agencies, and to a lesser degree, international government agencies and domestic and international commercial customers.
There were not any significant intersegment sales, cost of sales and profit for the years ended December 28, 2025, December 29, 2024, and December 31, 2023.
The Company’s chief operating decision maker is the President and Chief Executive Officer. The chief operating decision maker uses segment operating income (loss) predominantly in the annual budget and forecasting process. The chief operating decision maker considers budget-to-actual variances on a quarterly basis when making decisions about the allocation of operating and capital resources to each segment. The chief operating decision maker also uses segment operating income (loss) to assess the performance of each segment by comparing the results of each segment with one another and in determining the compensation of certain employees.
(a) Summary Operating Results
The tables below provide information about the Company’s reportable segments. In these tables total segment operating income (loss) of the reportable business segments is reconciled to the corresponding consolidated amount. “Unallocated amounts” includes costs for merger and acquisition expenses, stock-based compensation expenses, interest income (expense), net, and other income (expense) items not considered part of management’s evaluation of segment operating income (loss). See footnote 1(e) for segment revenues disaggregated by contract type, customer and geographic region. The summary operating results for the Company’s reportable segments for the years ended December 28, 2025, December 29, 2024, and December 31, 2023, are as follows (in millions):
Year Ended December 28, 2025 | Kratos | |||||||||||||||||||||||||||||||
| Government | Unmanned | |||||||||||||||||||||||||||||||
| Solutions | Systems | Totals | ||||||||||||||||||||||||||||||
| Service revenues | $ | 460.3 | $ | 8.7 | $ | 469.0 | ||||||||||||||||||||||||||
| Product sales | 594.5 | 283.3 | 877.8 | |||||||||||||||||||||||||||||
Total revenues | 1,054.8 | 292.0 | 1,346.8 | |||||||||||||||||||||||||||||
| Cost of service revenue | 350.1 | 6.7 | 356.8 | |||||||||||||||||||||||||||||
| Cost of product sales | 447.6 | 234.5 | 682.1 | |||||||||||||||||||||||||||||
Total cost of sales | 797.7 | 241.2 | 1,038.9 | |||||||||||||||||||||||||||||
| Selling, general & administrative expenses | 158.8 | 45.9 | 204.7 | |||||||||||||||||||||||||||||
| Research & development expenses | 37.7 | 2.3 | 40.0 | |||||||||||||||||||||||||||||
Total segment operating income | 60.6 | 2.6 | 63.2 | |||||||||||||||||||||||||||||
| Reconciliation of segment operating income | ||||||||||||||||||||||||||||||||
Unallocated amounts: | ||||||||||||||||||||||||||||||||
Merger and acquisition related expenses | (2.1) | |||||||||||||||||||||||||||||||
Stock compensation expense | (35.5) | |||||||||||||||||||||||||||||||
Interest income (expense), net | 5.9 | |||||||||||||||||||||||||||||||
Other income (expense), net | 2.5 | |||||||||||||||||||||||||||||||
| Income before income taxes | $ | 34.0 | ||||||||||||||||||||||||||||||
Revenues from foreign customers were approximately $267.7 million or 20% of total revenue for the year ended December 28, 2025. Revenues from any one foreign country did not exceed 10% of total revenues. Assets of foreign subsidiaries in the KGS segment were $300.5 million as of December 28, 2025. Assets from any one foreign country did not exceed 10% of total assets.
Year Ended December 29, 2024 | Kratos | |||||||||||||||||||||||||||||||
| Government | Unmanned | |||||||||||||||||||||||||||||||
| Solutions | Systems | Totals | ||||||||||||||||||||||||||||||
| Service revenues | $ | 416.3 | $ | 7.1 | $ | 423.4 | ||||||||||||||||||||||||||
| Product sales | 449.5 | 263.4 | 712.9 | |||||||||||||||||||||||||||||
Total revenues | 865.8 | 270.5 | 1,136.3 | |||||||||||||||||||||||||||||
| Cost of service revenue | 304.7 | 5.3 | 310.0 | |||||||||||||||||||||||||||||
| Cost of product sales | 322.3 | 216.8 | 539.1 | |||||||||||||||||||||||||||||
Total cost of sales | 627.0 | 222.1 | 849.1 | |||||||||||||||||||||||||||||
| Selling, general & administrative expenses | 146.1 | 41.3 | 187.4 | |||||||||||||||||||||||||||||
| Research & development expenses | 36.1 | 4.2 | 40.3 | |||||||||||||||||||||||||||||
Total segment operating income | 56.6 | 2.9 | 59.5 | |||||||||||||||||||||||||||||
| Reconciliation of segment operating income | ||||||||||||||||||||||||||||||||
Unallocated amounts: | ||||||||||||||||||||||||||||||||
Merger and acquisition related expenses | (0.7) | |||||||||||||||||||||||||||||||
Stock compensation expense | (29.8) | |||||||||||||||||||||||||||||||
Interest income (expense), net | (3.0) | |||||||||||||||||||||||||||||||
Other income (expense), net | 0.5 | |||||||||||||||||||||||||||||||
| Income before income taxes | $ | 26.5 | ||||||||||||||||||||||||||||||
Revenues from foreign customers were approximately $226.6 million or 20% of total revenue for the year ended December 29, 2024. Revenues from any one foreign country did not exceed 10% of total revenues. Assets of foreign subsidiaries in the KGS segment were $223.2 million as of December 29, 2024. Assets from any one foreign country did not exceed 10% of total assets.
Year Ended December 31, 2023 | Kratos | |||||||||||||||||||||||||||||||
| Government | Unmanned | |||||||||||||||||||||||||||||||
| Solutions | Systems | Totals | ||||||||||||||||||||||||||||||
| Service revenues | $ | 395.9 | $ | 6.7 | $ | 402.6 | ||||||||||||||||||||||||||
| Product sales | 429.0 | 205.5 | 634.5 | |||||||||||||||||||||||||||||
Total revenues | 824.9 | 212.2 | 1,037.1 | |||||||||||||||||||||||||||||
| Cost of service revenue | 298.3 | 4.9 | 303.2 | |||||||||||||||||||||||||||||
| Cost of product sales | 301.9 | 163.4 | 465.3 | |||||||||||||||||||||||||||||
Total cost of sales | 600.2 | 168.3 | 768.5 | |||||||||||||||||||||||||||||
| Selling, general & administrative expenses | 136.7 | 36.6 | 173.3 | |||||||||||||||||||||||||||||
| Research & development expenses | 35.3 | 3.1 | 38.4 | |||||||||||||||||||||||||||||
Total segment operating income (loss) | 52.7 | 4.2 | 56.9 | |||||||||||||||||||||||||||||
Reconciliation of segment operating income (loss) | ||||||||||||||||||||||||||||||||
Unallocated amounts: | ||||||||||||||||||||||||||||||||
Merger and acquisition related expenses | (0.4) | |||||||||||||||||||||||||||||||
Stock compensation expense | (25.4) | |||||||||||||||||||||||||||||||
Interest income (expense), net | (20.5) | |||||||||||||||||||||||||||||||
Other income (expense), net | 0.5 | |||||||||||||||||||||||||||||||
Income before income taxes | $ | 11.1 | ||||||||||||||||||||||||||||||
Revenues from foreign customers were approximately $202.0 million or 19% of total revenue for the year ended December 31, 2023. Revenues from any one foreign country did not exceed 10% of total revenues. Assets of foreign subsidiaries in the KGS segment were $204.6 million as of December 31, 2023. Assets from any one foreign country did not exceed 10% of total assets.
(b) Capital Expenditures (in millions):
| Year Ended | ||||||||||||||||||||||||||||||||
| December 28, 2025 | December 29, 2024 | December 31, 2023 | ||||||||||||||||||||||||||||||
| Kratos Government Solutions | $ | 57.3 | $ | 30.5 | $ | 26.9 | ||||||||||||||||||||||||||
| Unmanned Systems | 37.9 | 27.3 | 24.9 | |||||||||||||||||||||||||||||
| Total reportable segment capital expenditures | 95.2 | 57.8 | 51.8 | |||||||||||||||||||||||||||||
| Corporate capital expenditures | 0.1 | 0.4 | 0.6 | |||||||||||||||||||||||||||||
| Total capital expenditures | $ | 95.3 | $ | 58.2 | $ | 52.4 | ||||||||||||||||||||||||||
(c) Depreciation and Amortization (in millions):
| Year Ended | ||||||||||||||||||||||||||||||||
| December 28, 2025 | December 29, 2024 | December 31, 2023 | ||||||||||||||||||||||||||||||
| Kratos Government Solutions | $ | 32.1 | $ | 27.1 | $ | 24.1 | ||||||||||||||||||||||||||
| Unmanned Systems | 15.0 | 13.2 | 9.1 | |||||||||||||||||||||||||||||
Total depreciation and amortization | $ | 47.1 | $ | 40.3 | $ | 33.2 | ||||||||||||||||||||||||||
(d) Reportable Segment Assets are as follows (in millions):
| December 28, 2025 | December 29, 2024 | ||||||||||
Kratos Government Solutions | $ | 1,472.9 | $ | 1,250.4 | |||||||
Unmanned Systems | 438.7 | 385.7 | |||||||||
Total reportable segment assets | 1,911.6 | 1,636.1 | |||||||||
Corporate assets(1) | 555.6 | 314.8 | |||||||||
Total assets | $ | 2,467.2 | $ | 1,950.9 | |||||||
(1)Corporate assets primarily include cash and cash equivalents, deferred income tax assets, and property, plant and equipment used in our corporate operations.
Assets of foreign subsidiaries in the KGS segment were $300.5 million, $223.2 million and $204.6 million as of December 28, 2025, December 29, 2024 and December 31, 2023, respectively.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 23, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2023 | Feb 13, 2024 | |
| 2022 | Feb 23, 2023 | |
| 2021 | Feb 22, 2022 | |
| 2020 | Feb 25, 2021 | |
| 2019 | Feb 24, 2020 | |
| 2018 | Feb 28, 2019 | |
| 2017 | Feb 28, 2018 | |
| 2016 | Feb 27, 2017 | |
| 2015 | Mar 11, 2016 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.