Kratos Defense & Security Solutions announced a priced equity offering on February 26, 2026 that will sell 14,285,714 shares of common stock at $84 per share, with an option for underwriters to purchase an additional 2,142,857 shares. The transaction is expected to generate approximately $1.17 billion in net proceeds.
The company will deploy the proceeds to fund the recent acquisition of Nomad, the pending acquisition of Orbit, capital expenditures needed to scale operations, and other general corporate purposes. These investments are intended to strengthen Kratos’ capabilities in unmanned systems, hypersonic vehicles, and space technology, and to support the growing demand from the Department of War and other national‑security customers.
Kratos’ 2025 financial results provide context for the capital raise. Full‑year revenue reached $1.347 billion, an 18.5% increase from 2024, and adjusted earnings per share rose to $0.55 from $0.49. The company’s backlog exceeded $4 billion and its balance sheet remains strong, with a current ratio of 4.3 and a debt‑to‑equity ratio of 0.07. Management has guided 2026 revenue to $1.59 billion–$1.675 billion, reflecting confidence in continued organic growth.
Investors reacted to the offering with concerns about dilution and the discounted pricing relative to the prior closing price. The market’s focus on these factors underscores the sensitivity of Kratos’ shareholders to large equity issuances, even as the company positions itself for accelerated growth through strategic acquisitions and operational scaling.
"There is a generational, global recapitalization of technologically advanced strategic weapon systems underway, which Kratos is uniquely positioned to successfully execute on. We raised this capital to ensure that Kratos has the capability to move quickly, scale and successfully execute on large mission critical, National Security priorities," said CEO Eric DeMarco.
The equity offering represents a significant capital raise that will enable Kratos to pursue its growth strategy while maintaining a robust balance sheet. The company’s ability to secure financing at a favorable price demonstrates investor confidence in its long‑term prospects, even as the market remains vigilant about dilution risks.
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