Question · Q4 2025
Kashyin Kailer asked if the slightly lower organic growth outlook for the year, compared to the initial 15%-20% laid out last quarter, was purely a mathematical adjustment due to higher 2025 revenues. He also inquired about a timeline for Kratos to become more neutral or positive on free cash flow, given the current investment pipeline.
Answer
Deanna Lund, EVP and CFO, Kratos Defense & Security Solutions, confirmed that the adjustment was mathematical, as Kratos exceeded its 2025 organic growth forecast. Eric DeMarco, President and CEO, Kratos Defense & Security Solutions, stated that operating cash flow is starting to increase and is expected to ramp in 2027 and 2028. He emphasized that while Kratos is cognizant of cash flow, the current environment of increasing budgets and significant opportunities for non-traditionals means they will prioritize capital investment to build the company and generate shareholder returns, rather than providing a fixed timeline for FCF neutrality.
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