Latest news with #EricDeMarco
Yahoo
07-05-2025
- Business
- Yahoo
Kratos to Webcast Annual Shareholders Meeting Featuring CEO Business-Wide Update
Kratos Defense & Security Solutions, Inc. SAN DIEGO, May 07, 2025 (GLOBE NEWSWIRE) -- Kratos Defense & Security Solutions, Inc. (NASDAQ: KTOS), a Technology Company in the Defense, National Security and Global Markets, today announced it will webcast a special presentation from President and CEO Eric DeMarco as part of its 2025 Annual Meeting of Shareholders. The webcast will be open to the public and will take place on Wednesday, May 14, 2025, at 9:00 a.m. PDT. During the webcast, Mr. DeMarco will provide a comprehensive business-wide update covering Kratos' strategic priorities, operational highlights, technology initiatives, and market outlook across all divisions. The presentation will also highlight the company's progress in hypersonic systems, unmanned platforms, propulsion, space-based capabilities, and dual-use technologies. Shareholders who have logged into the meeting with their 16-digit Control Number will have the opportunity to submit questions relevant to the matters properly addressed during the meeting after the formal business of the meeting has been conducted. Instructions for submitting questions will be provided to shareholders once logged into the meeting. The Annual Meeting is open to shareholders of record as of March 17, 2025 (Record Date) and/or their designated representatives. Interested persons who were not shareholders as of the close of business on the Record Date may view, but not participate in, the Annual Meeting at Webcast Details: Date: Wednesday, May 14, 2025 Time: 9:00 a.m. PDT Registration Link: Open to: All interested parties About Kratos Defense & Security Solutions Kratos Defense & Security Solutions, Inc. (NASDAQ: KTOS) is a technology, products, system and software company addressing the defense, national security, and commercial markets. Kratos makes true internally funded research, development, capital and other investments, to rapidly develop, produce and field solutions that address our customers' mission critical needs and requirements. At Kratos, affordability is a technology, and we seek to utilize proven, leading edge approaches and technology, not unproven bleeding edge approaches or technology, with Kratos' approach designed to reduce cost, schedule and risk, enabling us to be first to market with cost effective solutions. We believe that Kratos is known as an innovative disruptive change agent in the industry, a company that is an expert in designing products and systems up front for successful rapid, large quantity, low cost future manufacturing which is a value add competitive differentiator for our large traditional prime system integrator partners and also to our government and commercial customers. Kratos intends to pursue program and contract opportunities as the prime or lead contractor when we believe that our probability of win (PWin) is high and any investment required by Kratos is within our capital resource comfort level. We intend to partner and team with a large, traditional system integrator when our assessment of PWin is greater or required investment is beyond Kratos' comfort level. Kratos' primary business areas include virtualized ground systems for satellites and space vehicles including software for command & control (C2) and telemetry, tracking and control (TT&C), jet powered unmanned aerial drone systems, hypersonic vehicles and rocket systems, propulsion systems for drones, missiles, loitering munitions, supersonic systems, space craft and launch systems, C5ISR and microwave electronic products for missile, radar, missile defense, space, satellite, counter UAS, directed energy, communication and other systems, and virtual & augmented reality training systems for the warfighter. For more information, visit
Yahoo
20-03-2025
- Yahoo
Kratos Has A Hypersonic Drone In The Works
Kratos has revealed that it is working on a new drone capable of flying at hypersonic speeds, typically defined as anything above Mach 5. The company has also said it is aiming for the very-high-speed uncrewed aircraft to be 'orders of magnitude' less expensive than any comparable design or concept known to exist today. Kratos CEO Eric DeMarco first disclosed the existence of the hypersonic drone program, which is currently internally funded, in a recent interview with Aviation Week. It is unclear when the project started or how mature the design is at present, or what mission sets it might be intended to perform. Kratos has also not explicitly said if it will be reusable or air-breathing, but describing it as a drone points to both of those things being true. 'We will disclose the name of this specific system at or near initial flight,' a Kratos spokesperson told TWZ when asked for more information. 'Since 2013, a key element of Kratos has been for Kratos to invest our own R&D [research and development], NRE [non-recurring engineering], and capital in order to move fast and rapidly design, engineer, and field affordable relevant systems for the warfighter, which is what we are doing with Kratos Furies Family of Hypersonic Systems,' the spokesperson added. 'Similar to Kratos Erinyes and Dark Fury Hypersonic Flyers, this new Kratos funded Hypersonic Drone initiative, included in Kratos Furies Family of Hypersonic Systems, is expected to be orders of magnitude less costly than any other hypersonic system or concept in existence today.' Erinyes and Dark Fury are both unpowered hypersonic boost-glide vehicles designed to be launched with the help of a booster rocket. Kratos has been developing its own Zeus family of solid-fuel rocket motors in parallel with those vehicles. This work is tied, at least in part, to the U.S. military's Multi-Service Advanced Capability Hypersonics Test Bed (MACH-TB) effort, U.S. Navy and Missile Defense Agency (MDA) requirements for hypersonic targets, and NASA's Sounding Rocket Program. Just in January, Kratos received a five-year contract for MACH-TB-related work, which, if all options are exercised, could have a total value of $1.45 billion. It's also worth noting here that affordability has long been a key tenet for Kratos when it comes to its drone programs, especially the company's flagship XQ-58 Valkyrie line. 'The mystery vehicle can be supported by the Hypersonic System Indiana Payload Integration Facility,' or IPIF, according to Aviation Week. 'Asked if the IPIF would support only payloads for hypersonic glide vehicles powered by solid rocket motors, DeMarco said vehicles with air-breathing propulsion technologies also are possible.' Kratos announced just earlier this week that ground had been broken at the site of the future IPIF in Crane, Indiana. Aviation Week also pointed to a statement that DeMarco made back in 2019 about how, 'beyond traditional turbojet and turbofan engines, we are also focused on developing advanced, affordable engines for a new class of hypersonic propulsion system.' Kratos has, so far, declined to say whether or not its hypersonic drone program is directly related to any other work the company has previously announced. Kratos was named as a member of the Leidos-led team that won a contract to develop a new air-breathing hypersonic platform as part of the Air Force's secretive Mayhem program in 2022, which we will come back to later on in this story. Kratos has also been working with Australian firm Hypersonix Launch Systems on the latter company's DART AE design. DART AE has been described as 'a three-meter-long, single-use, high temperature alloy, hydrogen-fueled, scramjet technology driven, autonomous, multi-mission, air-breathing hypersonic platform used to develop, demonstrate, test and evaluate hypersonic technologies and for 'other' potential hypersonic applications.' While it is a powered design, DART AE is also expected to be launched via a rocket booster. Hypersonix had originally targeted 2023 for DART AE's first flight, but the schedule subsequently slipped at least to the end of last year. Whether or not that design has actually flown now is unclear. The revelation that Kratos is working on a hypersonic drone also follows the emergence of the U.S. Defense Advanced Research Projects Agency's (DARPA) Next Generation Responsive Strike (Next RS) effort. From what is known now, Next RS is centered on advancing various technologies that could help in creating a new reusable hypersonic air vehicle capable of performing strike and intelligence, surveillance, and reconnaissance (ISR) missions. DARPA has indicated an actual Next RS prototype or demonstrator design could fly within the next five years. The Air Force is also involved in Next RS, the stated objectives of which are extremely similar to those of the previously mentioned Mayhem program. The service acknowledged to TWZ last year that there was uncertainty over whether or not there was even a requirement for this kind of hypersonic strike/ISR capability and the current status of the Mayhem effort is murky. Other companies are or at least have been working on reusable hypersonic aircraft designs. The Hermeus Corporation is notably working up to the first flight of its uncrewed Quarterhorse Mk. 1 aircraft, which is set to be staged from Edwards Air Force Base in California. The Quarterhorse Mk. 1 is powered by a J85 turbojet and is not expected to fly at even supersonic speed. Hermeus says this is the first stepping stone toward a hypersonic design that will feature its Chimera Turbine Based Combined Cycle (TBCC) propulsion system. A practical TBCC propulsion system has long been held out as a holy grail for very high-speed reusable aircraft. Ramjets and scramjets typically used to propel air-breathing air vehicle designs to hypersonic speeds do not work properly at subsonic speeds and often have difficulty performing even at low-supersonic speeds. This is why rocket motors are usually used to provide an initial boost for hypersonic air vehicles. TBCCs include jet engines that work at lower-speed regimes and offer the ability to seamlessly switch between high and low-speed modes on demand. As such, an air vehicle with TBCC propulsion would be able to take off and land from existing runways like any other aircraft, but be able to cruise at high-supersonic or even hypersonic speeds. This, in turn, would offer immense flexibility to perform a host of potential missions. More details about Kratos' hypersonic drone project may begin to emerge now that its existence has been disclosed, especially if a first flight may be getting closer on the horizon. Contact the author: joe@
Globe and Mail
18-03-2025
- Business
- Globe and Mail
Kratos Breaks Ground on $50 Million State-of-the-Art Hypersonic System Indiana Payload Integration Facility
SAN DIEGO, March 18, 2025 (GLOBE NEWSWIRE) -- Kratos Defense & Security Solutions, Inc. (Nasdaq: KTOS), a technology company specializing in defense, national security, and global markets, today announced the groundbreaking of Kratos' Hypersonic System Indiana Payload Integration Facility (IPIF) in Crane, Indiana. This state-of-the-art 68,000-square-foot office, laboratory, integration and test complex will support critical hypersonic vehicle and payload activities and systems for the Multi-Service Advanced Capabilities Hypersonic Testbed (MACH-TB) program. The project demonstrates Kratos' commitment to advancing hypersonic system payload integration and test capabilities and expanding crucial infrastructure needed to accelerate the time to Mach 5+ flight testing. Rendering of the Kratos Hypersonic System Indiana Payload Integration Facility A photo accompanying this announcement is available at With an investment in construction and equipment estimated to exceed $50 million, the Kratos IPIF is being designed for rapid, affordable preparation of experimental payloads to significantly boost the tempo of flight testing for next-generation hypersonic systems and technologies and to accelerate the development of advanced weapons systems. The facility is expected to create over 100 high-tech jobs, with an estimated average annual wage of $80,000+. IPIF operational readiness is expected by the end of 2026. The hypersonic system IPIF expands Kratos' footprint in Indiana and complements the recently announced agreement with Kratos and RAFAEL Advanced Defense Systems Ltd., launching Prometheus Energetics LLC (Prometheus), a new U.S.-based merchant supplier of Solid Rocket Motors (SRMs) and other energetics with Prometheus headquarters and production campus located on an approximate 550-acre site in Bloomfield, Indiana, at ACMI's National Security Industrial Hub (NSIH). Eric DeMarco, President and CEO of Kratos, said: 'The Kratos Hypersonic System Indiana Payload Integration Facility represents a strategic investment in our Nation's hypersonic infrastructure, workforce and capabilities. Kratos is committed to achieving, if not exceeding, the MACH-TB program's primary goals, which include, increasing the cadence of flight tests and to mature and qualify advanced hypersonic technologies. Kratos' IPIF will provide a vital commercial launch vehicle environmental test and assembly capability to supplement existing DoD and NASA facilities.' Mike Braun, Governor of Indiana, welcomed Kratos, highlighting the state's growing role in national security and advanced defense technology: 'Kratos' decision to establish operations here further cements Indiana's position as a national leader in defense innovation and advanced manufacturing. This investment will not only create high-paying jobs for Hoosiers but will also strengthen our state's role in supporting the Department of Defense's critical missions. We are proud to welcome Kratos to Indiana and look forward to future partnership and the economic and technological benefits Kratos will bring to our defense ecosystem and the region.' Mr. George Rumford, Director of the DoD Test Resource Management Center (TRMC), emphasized the importance of collaboration between DoD and industry to advance national strategic objectives: "As the U.S. accelerates hypersonic development and testing, we must take a 'whole-of-nation' approach to ensure our warfighters have the capabilities they need to stay ahead of emerging threats. State-of-the-art facilities in industry such as Kratos' Indiana Payload Integration Facility will significantly enhance our ability to rapidly test next-generation hypersonic systems.' The hypersonic system IPIF marks one of several strategic investments Kratos is making in the region located near Naval Support Activity Crane. Designed to serve as a key hub for defense innovation, the facility will support integration activities working with government and industry partners. Interior of the Kratos Hypersonic System Indiana Payload Integration Facility A photo accompanying this announcement is available at State and local leaders joined Kratos executives at the groundbreaking ceremony, recognizing the facility's importance in supporting regional economic growth and technological advancement. "We are thrilled to officially welcome Kratos to the WestGate@Crane Technology Park and eagerly anticipate their success in the Indiana Uplands' regional defense community,' said Bryant Niehoff, CEO of the Uplands Science & Technology Foundation (USTF), a nonprofit foundation established to lead the physical development and enhance the vitality of WestGate@Crane. 'Collaboration is at the very foundation of our tri-county technology park. Today's announcement is a testament to our collaborative efforts, backed by local support from the Daviess County Council and Economic Development Corporation, as well as regional and state-level commitment through the IEDC's READI program, spearheaded in our region by the Regional Opportunity Initiatives (ROI).' Kratos remains at the forefront of hypersonic and advanced technology development and testing, providing affordable, high-performance solutions to meet the needs of the U.S. military and allied nations. Kratos was recently selected as the prime contractor for the Multi-Service Advanced Capability Hypersonic Test Bed (MACH-TB) 2.0 program under Task Area 1, leading the effort to implement efficiency and affordability initiatives to increase hypersonic flight test tempo and effectiveness. Kratos is the only company delivering both propulsion and flyer systems, which includes Kratos' low cost Erinyes Hypersonic Flyer, Dark Fury, Zeus and Oriole Solid Rocket Motors, along with other Kratos systems and technologies. Kratos provides unmatched innovation, disruptive capabilities, mission responsiveness and affordability to our customers across our portfolio of systems. For more information on Kratos and its hypersonic programs, visit About Kratos Defense & Security Solutions Kratos Defense & Security Solutions, Inc. (NASDAQ: KTOS) is a technology, products, system and software company addressing the defense, national security, and commercial markets. Kratos makes true internally funded research, development, capital and other investments, to rapidly develop, produce and field solutions that address our customers' mission critical needs and requirements. At Kratos, affordability is a technology, and we seek to utilize proven, leading edge approaches and technology, not unproven bleeding edge approaches or technology, with Kratos' approach designed to reduce cost, schedule and risk, enabling us to be first to market with cost effective solutions. We believe that Kratos is known as an innovative disruptive change agent in the industry, a company that is an expert in designing products and systems up front for successful rapid, large quantity, low-cost future manufacturing which is a value add competitive differentiator for our large traditional prime system integrator partners and also to our government and commercial customers. Kratos intends to pursue program and contract opportunities as the prime or lead contractor when we believe that our probability of win (PWin) is high and any investment required by Kratos is within our capital resource comfort level. We intend to partner and team with a large, traditional system integrator when our assessment of PWin is greater or required investment is beyond Kratos' comfort level. Kratos' primary business areas include virtualized ground systems for satellites and space vehicles including software for command & control (C2) and telemetry, tracking and control (TT&C), jet powered unmanned aerial drone systems, advanced vehicles and rocket systems, propulsion systems for drones, missiles, loitering munitions, supersonic systems, space craft and launch systems, C5ISR and microwave electronic products for missile, radar, missile defense, space, satellite, counter UAS, directed energy, communication and other systems, and virtual & augmented reality training systems for the warfighter. For more information, visit Notice Regarding Forward-Looking Statements Certain statements in this press release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are made on the basis of the current beliefs, expectations and assumptions of the management of Kratos and are subject to significant risks and uncertainty. Investors are cautioned not to place undue reliance on any such forward-looking statements. All such forward-looking statements speak only as of the date they are made, and Kratos undertakes no obligation to update or revise these statements, whether as a result of new information, future events or otherwise. Although Kratos believes that the expectations reflected in these forward-looking statements are reasonable, these statements involve many risks and uncertainties that may cause actual results to differ materially from what may be expressed or implied in these forward-looking statements. For a further discussion of risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to the business of Kratos in general, see the risk disclosures in the Annual Report on Form 10-K of Kratos for the year ended December 29, 2024, and in subsequent reports on Forms 10-Q and 8-K and other filings made with the SEC by Kratos.
Yahoo
18-03-2025
- Business
- Yahoo
Kratos Breaks Ground on $50 Million State-of-the-Art Hypersonic System Indiana Payload Integration Facility
SAN DIEGO, March 18, 2025 (GLOBE NEWSWIRE) -- Kratos Defense & Security Solutions, Inc. (Nasdaq: KTOS), a technology company specializing in defense, national security, and global markets, today announced the groundbreaking of Kratos' Hypersonic System Indiana Payload Integration Facility (IPIF) in Crane, Indiana. This state-of-the-art 68,000-square-foot office, laboratory, integration and test complex will support critical hypersonic vehicle and payload activities and systems for the Multi-Service Advanced Capabilities Hypersonic Testbed (MACH-TB) program. The project demonstrates Kratos' commitment to advancing hypersonic system payload integration and test capabilities and expanding crucial infrastructure needed to accelerate the time to Mach 5+ flight of the Kratos Hypersonic System Indiana Payload Integration Facility A photo accompanying this announcement is available at With an investment in construction and equipment estimated to exceed $50 million, the Kratos IPIF is being designed for rapid, affordable preparation of experimental payloads to significantly boost the tempo of flight testing for next-generation hypersonic systems and technologies and to accelerate the development of advanced weapons systems. The facility is expected to create over 100 high-tech jobs, with an estimated average annual wage of $80,000+. IPIF operational readiness is expected by the end of 2026. The hypersonic system IPIF expands Kratos' footprint in Indiana and complements the recently announced agreement with Kratos and RAFAEL Advanced Defense Systems Ltd., launching Prometheus Energetics LLC (Prometheus), a new U.S.-based merchant supplier of Solid Rocket Motors (SRMs) and other energetics with Prometheus headquarters and production campus located on an approximate 550-acre site in Bloomfield, Indiana, at ACMI's National Security Industrial Hub (NSIH). Eric DeMarco, President and CEO of Kratos, said: 'The Kratos Hypersonic System Indiana Payload Integration Facility represents a strategic investment in our Nation's hypersonic infrastructure, workforce and capabilities. Kratos is committed to achieving, if not exceeding, the MACH-TB program's primary goals, which include, increasing the cadence of flight tests and to mature and qualify advanced hypersonic technologies. Kratos' IPIF will provide a vital commercial launch vehicle environmental test and assembly capability to supplement existing DoD and NASA facilities.' Mike Braun, Governor of Indiana, welcomed Kratos, highlighting the state's growing role in national security and advanced defense technology: 'Kratos' decision to establish operations here further cements Indiana's position as a national leader in defense innovation and advanced manufacturing. This investment will not only create high-paying jobs for Hoosiers but will also strengthen our state's role in supporting the Department of Defense's critical missions. We are proud to welcome Kratos to Indiana and look forward to future partnership and the economic and technological benefits Kratos will bring to our defense ecosystem and the region.' Mr. George Rumford, Director of the DoD Test Resource Management Center (TRMC), emphasized the importance of collaboration between DoD and industry to advance national strategic objectives: "As the U.S. accelerates hypersonic development and testing, we must take a 'whole-of-nation' approach to ensure our warfighters have the capabilities they need to stay ahead of emerging threats. State-of-the-art facilities in industry such as Kratos' Indiana Payload Integration Facility will significantly enhance our ability to rapidly test next-generation hypersonic systems.' The hypersonic system IPIF marks one of several strategic investments Kratos is making in the region located near Naval Support Activity Crane. Designed to serve as a key hub for defense innovation, the facility will support integration activities working with government and industry of the Kratos Hypersonic System Indiana Payload Integration Facility A photo accompanying this announcement is available at State and local leaders joined Kratos executives at the groundbreaking ceremony, recognizing the facility's importance in supporting regional economic growth and technological advancement. "We are thrilled to officially welcome Kratos to the WestGate@Crane Technology Park and eagerly anticipate their success in the Indiana Uplands' regional defense community,' said Bryant Niehoff, CEO of the Uplands Science & Technology Foundation (USTF), a nonprofit foundation established to lead the physical development and enhance the vitality of WestGate@Crane. 'Collaboration is at the very foundation of our tri-county technology park. Today's announcement is a testament to our collaborative efforts, backed by local support from the Daviess County Council and Economic Development Corporation, as well as regional and state-level commitment through the IEDC's READI program, spearheaded in our region by the Regional Opportunity Initiatives (ROI).' Kratos remains at the forefront of hypersonic and advanced technology development and testing, providing affordable, high-performance solutions to meet the needs of the U.S. military and allied nations. Kratos was recently selected as the prime contractor for the Multi-Service Advanced Capability Hypersonic Test Bed (MACH-TB) 2.0 program under Task Area 1, leading the effort to implement efficiency and affordability initiatives to increase hypersonic flight test tempo and effectiveness. Kratos is the only company delivering both propulsion and flyer systems, which includes Kratos' low cost Erinyes Hypersonic Flyer, Dark Fury, Zeus and Oriole Solid Rocket Motors, along with other Kratos systems and technologies. Kratos provides unmatched innovation, disruptive capabilities, mission responsiveness and affordability to our customers across our portfolio of systems. For more information on Kratos and its hypersonic programs, visit About Kratos Defense & Security SolutionsKratos Defense & Security Solutions, Inc. (NASDAQ: KTOS) is a technology, products, system and software company addressing the defense, national security, and commercial markets. Kratos makes true internally funded research, development, capital and other investments, to rapidly develop, produce and field solutions that address our customers' mission critical needs and requirements. At Kratos, affordability is a technology, and we seek to utilize proven, leading edge approaches and technology, not unproven bleeding edge approaches or technology, with Kratos' approach designed to reduce cost, schedule and risk, enabling us to be first to market with cost effective solutions. We believe that Kratos is known as an innovative disruptive change agent in the industry, a company that is an expert in designing products and systems up front for successful rapid, large quantity, low-cost future manufacturing which is a value add competitive differentiator for our large traditional prime system integrator partners and also to our government and commercial customers. Kratos intends to pursue program and contract opportunities as the prime or lead contractor when we believe that our probability of win (PWin) is high and any investment required by Kratos is within our capital resource comfort level. We intend to partner and team with a large, traditional system integrator when our assessment of PWin is greater or required investment is beyond Kratos' comfort level. Kratos' primary business areas include virtualized ground systems for satellites and space vehicles including software for command & control (C2) and telemetry, tracking and control (TT&C), jet powered unmanned aerial drone systems, advanced vehicles and rocket systems, propulsion systems for drones, missiles, loitering munitions, supersonic systems, space craft and launch systems, C5ISR and microwave electronic products for missile, radar, missile defense, space, satellite, counter UAS, directed energy, communication and other systems, and virtual & augmented reality training systems for the warfighter. For more information, visit Notice Regarding Forward-Looking StatementsCertain statements in this press release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are made on the basis of the current beliefs, expectations and assumptions of the management of Kratos and are subject to significant risks and uncertainty. Investors are cautioned not to place undue reliance on any such forward-looking statements. All such forward-looking statements speak only as of the date they are made, and Kratos undertakes no obligation to update or revise these statements, whether as a result of new information, future events or otherwise. Although Kratos believes that the expectations reflected in these forward-looking statements are reasonable, these statements involve many risks and uncertainties that may cause actual results to differ materially from what may be expressed or implied in these forward-looking statements. For a further discussion of risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to the business of Kratos in general, see the risk disclosures in the Annual Report on Form 10-K of Kratos for the year ended December 29, 2024, and in subsequent reports on Forms 10-Q and 8-K and other filings made with the SEC by Kratos. Press Contact:Claire Investor Information:877-934-4687investor@
Yahoo
27-02-2025
- Business
- Yahoo
Kratos Defense & Security Solutions Inc (KTOS) Q4 2024 Earnings Call Highlights: Strong ...
Release Date: February 26, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Kratos Defense & Security Solutions Inc (NASDAQ:KTOS) achieved its financial objectives for 2024, with a 9.1% organic revenue growth. The company forecasts a 10% organic revenue growth for 2025 and 13-15% for 2026, indicating strong future growth potential. Kratos has secured several large new program awards, including a $1.5 billion hypersonic area contract, positioning it for significant future revenue growth. The company is expanding its facilities and capabilities, including a new hypersonic production campus, to meet increased demand and future growth. Kratos' partnership with Rafael to establish the Prometheus Energetics Joint Venture is expected to significantly enhance its production capabilities and market position. Kratos is operating under a continuing resolution authorization (CRA) with no 2025 defense budget in place, creating uncertainty in financial planning. The company faces challenges in obtaining and retaining qualified personnel, particularly those with national security clearances. Supply chain issues and increasing material costs are impacting Kratos' multi-year fixed price contracts, affecting profitability. The commercial satellite business is experiencing delays due to OEM manufacturing and delivery issues, impacting revenue. Kratos is cautious about including potential significant tactical drone sales in its financial forecast until contracts are secured. Warning! GuruFocus has detected 6 Warning Signs with KTOS. Q: As Kratos becomes more of a merchant supplier with low-cost engines and the Prometheus Rocket motor, how does this affect the company's long-term margin profile or strategy? A: Eric DeMarco, CEO: The margin profile is expected to improve starting now and significantly in 2026 and 2027. This is due to the merchant supplier strategy and the renewal of long-term contracts at higher rates, allowing us to recover from past inflation-driven costs. We anticipate being in great shape going into 2026 as these factors positively impact our margins. Q: Regarding the Mock TV 2.0 program, is there any reason to think Kratos won't convert affordable bridge products to technical products in the future? A: Eric DeMarco, CEO: There is no reason to think we would not pursue that path. We have a history of converting affordable bridge products to technical products, and we plan to continue doing so. Q: Can you provide more details on the evolution of the Mock TV contract and what drives revenue and profitability? A: Eric DeMarco, CEO: The Mock TV contract is primarily an aerial test contract. The U.S. lacks sufficient test assets, especially in the air, and Kratos is one of the few companies with hypersonic systems flying today. We have a roadmap for launches with the customer, and the program is planned to ramp significantly starting in 2026, with further increases in 2027 and 2028. Q: How should we model out the level of investment going forward, and where does cash flow go after this year? A: Deanna Lund, CFO: The Prometheus investment is not included in the current numbers, with the majority expected in 2026. Most other investments should be non-recurring and completed in 2025, except for the turbojet facility, which will predominantly be completed in 2026. These are the main factors affecting cash flow and investment levels. Q: What are Kratos' objectives with the defense electronics business, and how does the recent acquisition of Norden Millimeter fit into this strategy? A: Eric DeMarco, CEO: Kratos aims to be a leading merchant supplier of microwave electronics in the U.S. We have re-entered the market and accelerated our efforts recently. Our objective is to grow this business rapidly and achieve high margins, leveraging our strong relationships with traditional primes and new defense technology companies. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
