Kratos Defense & Security Solutions Inc. (NASDAQ: KTOS) shares rose more than 15% in midday trading on January 12, 2026, driven by strong fourth-quarter results and the announcement of two major new government contracts totaling $285 million. The company exceeded revenue and earnings expectations, with adjusted EBITDA increasing 22% year-over-year.
- KTOS stock rose 15.3% on January 12, 2026, following positive Q4 earnings
- Q4 revenue reached $412 million, exceeding estimates by 7%
- Adjusted EBITDA increased 22% YoY to $112 million
- New government contracts totaling $285 million awarded in Q4 2025
- Company backlog now stands at $1.3 billion, up 17% from prior year
- Full-year 2026 revenue guidance projected at $1.75B–$1.85B
Kratos Defense & Security Solutions Inc. (KTOS) experienced a sharp rally in its stock price, gaining over 15% during afternoon trading on January 12, 2026, as investors reacted positively to its latest quarterly performance and new contract wins. The surge followed the company’s release of Q4 2025 financial results, which showed revenue of $412 million—exceeding analyst estimates by 7%—and non-GAAP earnings per share of $0.83, surpassing the expected $0.76. Adjusted EBITDA reached $112 million, marking a 22% year-over-year increase, reflecting improved operational efficiency and stronger project execution across its unmanned systems and electronic warfare divisions. The company disclosed two significant new procurement awards from U.S. Department of Defense agencies, collectively valued at $285 million. The first, a $160 million contract from the Air Force, involves the development and production of high-altitude unmanned aircraft systems for surveillance and electronic warfare missions. The second, a $125 million award from the Navy, focuses on integrating next-generation cyber defense platforms into existing fleet command infrastructure. Both contracts are expected to be fulfilled over the next 24 to 36 months and are subject to annual funding approvals. Analysts noted the company’s increasing focus on autonomous systems and cyber-physical defense technologies as key growth drivers. The current backlog stands at $1.3 billion, up 17% from the prior year, with 70% of it attributable to long-term military contracts. The stock’s performance also reflects broader market optimism around defense spending, particularly in emerging technology domains like AI-enabled combat systems and electronic warfare. Investors are pricing in sustained revenue visibility, with management projecting full-year 2026 revenue of $1.75 billion to $1.85 billion, representing a 14% to 18% increase from 2025. Market participants across institutional and retail segments have increased their positions in KTOS, with short interest dropping by 18% over the past three weeks. The stock’s momentum is also being supported by favorable technical indicators, including a breakout above its 50-day moving average and a rising Relative Strength Index (RSI) indicating strong buying pressure.