Kratos Defense & Security Solutions (KTOS) Q3 FY2023 earnings: revenue $275 million, up 20.1% on the year

Kratos Defense & Security Solutions, Inc. (KTOS) reported revenue of $275 million for Q3 FY2023, the quarter ended 1 October 2023, up 20.1% on the same quarter a year earlier. Net income was -$2 million, and diluted earnings per share $-0.01. The figures are the company's own, from the 10-Q it filed with the SEC on 2 November 2023.

Revenue$275 millionup 20.1%

Net income-$2 million

Diluted EPS$-0.01

QuarterQ3 FY2023ended 1 October 2023

The quarter, against the one before and a year earlier

Line	Q3 FY2023	Quarter before	A year earlier	Change on the year
Revenue	275	n/a	n/a	n/a
Cost of revenue	201	n/a	n/a	n/a
Gross profit	73.4	n/a	n/a	n/a
Gross margin	26.7%	n/a	n/a
Research and development	10.3	n/a	n/a	n/a
Selling, general and administrative	50.9	n/a	n/a	n/a
Operating income	12.2	n/a	n/a	n/a
Operating margin	4.4%	n/a	n/a
Pre-tax income	6.8	n/a	n/a	n/a
Income tax	3.8	n/a	n/a	n/a
Effective tax rate	55.9%	n/a	n/a
Net income	-1.6	n/a	n/a	n/a
Net margin	-0.6%	n/a	n/a
Diluted EPS	-$0.01	n/a	n/a	n/a

$ million except per share.

Free cash flow is operating cash flow less capital expenditure; the effective tax rate is income tax over pre-tax income; margins are the line over revenue. Gross profit is revenue less cost of revenue, and operating income is revenue less the company's own total costs, where the statement does not print those lines. Those four are arithmetic on the filed numbers; everything else is as filed. Money is in $ million as the company files it, or in $ billion by the switch above the tables; per share figures and share counts are as they are.

Cash flow and capital returned

Line	Q3 FY2023	Quarter before	A year earlier	Change on the year
Operating cash flow	0.0	n/a	n/a	n/a
Capital expenditure	14.2	n/a	n/a	n/a
Free cash flow	-14.2	n/a	n/a	n/a
Free cash flow margin	-5.2%	n/a	n/a
Cash from investing	-14.2	n/a	n/a	n/a
Cash from financing	8.7	n/a	n/a	n/a
Depreciation and amortisation	8.2	n/a	n/a	n/a
Share-based compensation	6.4	n/a	n/a	n/a
Diluted shares, weighted	130m	n/a	n/a	n/a
Shares outstanding at period end	128m	n/a	n/a	n/a

Cash flow lines for the quarter; where the company files them year to date, the quarter is the difference between two filings.

Balance sheet at quarter end

Line	Q3 FY2023	Quarter before	A year earlier	Change on the year
Shareholders' equity	953	n/a	n/a	n/a
Redeemable equity	19.3	n/a	n/a	n/a
Debt	234	n/a	n/a	n/a
Operating lease liabilities	43.0	n/a	n/a	n/a
Finance lease liabilities	49.5	n/a	n/a	n/a
Other liabilities	291	n/a	n/a	n/a
Total liabilities and equity	1,591	n/a	n/a	n/a
Goodwill	558	n/a	n/a	n/a
Intangible assets	50.7	n/a	n/a	n/a
Cash and equivalents	42.2	n/a	n/a	n/a
Receivables	128	n/a	n/a	n/a
Other assets	812	n/a	n/a	n/a
Total assets	1,591	n/a	n/a	n/a

Quarterly results, the last 12 quarters

	Q3 FY2023	Q4 FY2023 *	Q1 FY2024	Q2 FY2024	Q3 FY2024	Q4 FY2024 *	Q1 FY2025	Q2 FY2025	Q3 FY2025	Q4 FY2025 *	Q1 FY2026	Q2 FY2026
Revenue	275	274	277	300	276	283	303	352	348	345	371	459
Cost of revenue	201	202	206	223	207	213	229	278	270	262	281	359
Gross profit	73.4	71.9	71.0	77.2	69.2	69.8	73.6	73.8	77.1	83.4	89.6	100
Gross margin	27%	26%	26%	26%	25%	25%	24%	21%	22%	24%	24%	22%
R&D	10.3	8.0	9.6	10.2	9.9	10.6	10.0	10.2	10.0	9.8	10.7	13.6
SG&A	50.9	51.8	54.4	54.5	52.6	52.5	57.0	59.9	59.8	63.5	72.3	87.3
Operating income	12.2	11.7	7.0	12.5	6.5	3.0	6.6	3.7	7.1	8.2	4.7	-1.6
Operating margin	4%	4%	3%	4%	2%	1%	2%	1%	2%	2%	1%	-0%
Pre-tax income	6.8	7.6	4.0	12.7	5.8	4.0	5.4	4.6	11.9	12.1	9.8	7.0
Tax rate	56%	26%	68%	38%	45%	2%	17%	37%	27%	51%	-21%	37%
Net income	-1.6	2.4	1.3	7.9	3.2	3.9	4.5	2.9	8.7	5.9	11.9	4.4
Net margin	-1%	1%	0%	3%	1%	1%	1%	1%	3%	2%	3%	1%
Diluted EPS	-$0.01	$0.02	$0.01	$0.05	$0.02	$0.03	$0.03	$0.02	$0.05	$0.03	$0.07	$0.02
Operating cash flow	0.0	67.4	0.7	-2.7	6.1	45.6	-29.2	-11.7	-13.3	12.1	-27.4	-11.0
Capital expenditure	14.2	19.3	16.6	12.7	15.3	13.6	22.6	20.5	28.0	24.2	19.9	17.2
Free cash flow	-14.2	48.1	-15.9	-15.4	-9.2	32.0	-51.8	-32.2	-41.3	-12.1	-47.3	-28.2
Shares outstanding	128m	129m	150m	151m	151m	151m	153m	169m	169m	169m	187m	188m
Filing	10-Q	10-K	10-Q	10-Q	10-Q	10-K	10-Q	10-Q	10-Q	10-K	10-Q	10-Q

Each quarter as filed, linked to its filing.

* The fourth quarter is the full year less the first three quarters, because the company files the year and not the quarter on its own. A fourth quarter's EPS and diluted share count are from the company's results press release for that quarter, used where the release gives the same revenue and net income as the table. Money is in $ million as the company files it, or in $ billion by the switch above the tables; per share figures and the share count are as they are. Free cash flow is operating cash flow less capital expenditure; the effective tax rate is income tax over pre-tax income; margins are the line over revenue. Gross profit is revenue less cost of revenue, and operating income is revenue less the company's own total costs, where the statement does not print those lines. Cash flow lines filed year to date are the difference between two filings. Shares outstanding are at the period end where the balance sheet tags them, otherwise the count on the filing's cover page. A derived fourth-quarter EPS is left blank when a split in the year makes the arithmetic meaningless.

Source

10-Q for the period ended 1 October 2023, filed 2 November 2023, accession 0001069258-23-000062: the filing on EDGAR. All of Kratos Defense & Security Solutions, Inc.'s filings: EDGAR company page.

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