Adjusted EBITDA for Q2 2025 was $28.3 million, above the forecasted range of $21 million to $25 million, despite increased contractor and material costs in Unmanned Systems and a less favorable mix in Space, Training and Cyber.
Cash flow used in operations was $10.6 million, reflecting working capital needs from revenue growth, increased inventory, and investments in development initiatives.
Contract mix for Q2 was 65% fixed price, 31% cost plus, and 4% time and material, with 71% of revenues from U.S. government contracts.
Days sales outstanding (DSO) improved slightly from 104 to 103 days quarter-over-quarter.
Free cash flow used was $31.1 million after $20.5 million in capital expenditures, primarily for expanding manufacturing and production facilities.
KGS segment revenue increased by $64 million year-over-year with organic growth of 27.1%, excluding the impact of the Norden Millimeter acquisition.
Second quarter 2025 revenues were $351.5 million, exceeding the estimated range of $300 million to $310 million, with notable growth in defense rocket support and C5ISR businesses.
Unmanned Systems revenue declined by $12.6 million year-over-year due to prior year international target drone shipments, partially offset by increased tactical drone revenues.
Dafinchi
