Shares of Kratos Defense & Security Solutions, Inc. (KTOS) surged a solid 17% to reach $20.82 on Feb 15, reflecting investors’ optimism following the company’s latest report.KTOS reported fourth-quarter 2023 adjusted earnings of 12 cents per share, up 50% from 8 cents reported in the prior-year quarter. The bottom line also surpassed the Zacks Consensus Estimate of 8 cents by 50%.Kratos Defense reported GAAP earnings of 2 cents per share against a loss of 7 cents per share in the fourth quarter of 2022.For ...

Financial Data and Key Metrics - Revenues for Q4 2023 were $273.8 million, exceeding the estimated range of $237 million to $257 million, driven by strong performance in space and satellite, turbine technologies, C5ISR, and microwave products businesses [175] - Adjusted EBITDA for Q4 2023 was $29.1 million, above the estimated range of $19 million to $23 million, reflecting higher revenues and a favorable revenue mix [176] - Free cash flow for Q4 2023 was $48.1 million after $19.3 million in CapEx, driven by accelerated customer milestone payments in turbine technologies, unmanned systems, and space and satellite businesses [177] - Full-year 2023 revenues were $1.037 billion, with an organic growth rate of 12.6% YoY, and adjusted EBITDA of $95.4 million [179][180] Business Line Data and Key Metrics - The unmanned systems business is expected to generate $260 million to $270 million in revenues in 2024, reflecting 20% to 25% organic growth over 2023 [96] - The space business, impacted by the CRA, is forecasted to grow at a lower rate than the overall KGS segment, which is expected to grow at 6% organically in 2024 [189] - The microwave electronics business is performing strongly, particularly in Israel, with record backlog and revenue levels due to increased demand for missile systems [19][20][21] - The engine business, including turbojets and turbofans, is seeing incredible demand, with a strong pipeline for Made in the USA engines [8] Market Data and Key Metrics - The Israeli market is a key driver for the microwave electronics business, with the company being a primary provider for Israeli missile and radar systems [19][21] - The U.S. federal government accounted for 69% of Q4 2023 revenues, with 13% from commercial customers and 18% from foreign customers [85] - The international target drone business is not tied to the U.S. federal budget and is expected to perform well, with higher margins compared to domestic sales [65] Company Strategy and Industry Competition - The company is focusing on affordability and rapid development in the drone market, positioning itself as a low-cost, rapid provider of jet drones [99][100] - Kratos is partnering with prime system integrators to increase the probability of winning contracts and reducing financial risk [15][118] - The company is investing in growth areas such as high-performance jet drone systems, hypersonic rocket motors, and next-generation jet engines [112] - Kratos is establishing production facilities for jet engines and expanding its microwave electronics manufacturing capabilities [154][157] Management Commentary on Operating Environment and Future Outlook - The company expects Q3 and Q4 2024 to be stronger than the first half of the year, driven by government contracting activities once the CRA is resolved [172] - The threat environment is increasing, and the company believes that affordability will be a key factor in winning contracts in a potentially tightening budget environment [43][44] - The company is forecasting 10% organic revenue growth for 2024, with significant investments in CapEx, particularly in unmanned systems and space businesses [112][181] Other Important Information - The company's backlog is $1.2 billion, with an opportunity pipeline of approximately $11 billion, providing confidence in the 2024 financial forecast [136] - Kratos is investing in a Material Production Center of Excellence and expanding its global satellite sensor network, with costs expected to be recovered under customer contracts [182] - The company is not planning any acquisitions and is focused on executing existing programs and making necessary investments to win new opportunities [171] Q&A Session Summary Question: Growth profile of KGS vs KUS in 2024 - The unmanned systems business is expected to be the biggest growth segment in 2024, particularly in drones, with potential to exceed expectations if the budget is approved [4] - The space business within KGS is expected to see growth in 2025 as programs transition to production [6] Question: Pipeline increase and moving pieces - The pipeline has increased by $700 million sequentially, with significant growth in the C5ISR, turbine, and microwave businesses [7] - The engine business has an incredible pipeline, with strong demand for turbojets, turbofans, and rocket engines [8] Question: CapEx increase and normalization - The $20 million increase in CapEx is driven by investments in microwave business, Valkyrie production, and the satellite network, and is not expected to be recurring [10] Question: Microwave systems backlog - The microwave electronics business is at record backlog and revenue levels, driven by demand from Israel for missile systems [19][20][21] Question: Impact of BlueHalo and Eclipse merger - The merger does not impact the $160 million OpenSpace award, and the SCAR program is expected to be a key driver for Kratos in 2025 [26] Question: Margin expectations for tactical drones - Margins for tactical drones are expected to be in the 7% range during development, with potential for expansion in full-rate production [62][74] Question: Space business inflection in 2025 - The space business is expected to see an inflection in 2025, with increased deliveries and higher margins, driven by production ramp-ups [77][78] Question: Valkyrie production and CapEx - CapEx related to Valkyrie production in 2024 is approximately $20 million, with production expected to continue into 2025 [63] Question: Competitive landscape in tactical drones - Kratos is focused on affordability and rapid development, with a different model compared to competitors like Australia's Ghost Bat program [165][167] Question: Non-DoD business growth - 30% of Kratos' business is not tied to the DoD, with strong performance in the Israeli microwave electronics business and commercial satellite contracts [168]

For the quarter ended December 2023, Kratos (KTOS) reported revenue of $273.8 million, up 9.8% over the same period last year. EPS came in at $0.12, compared to $0.08 in the year-ago quarter.The reported revenue represents a surprise of +8.63% over the Zacks Consensus Estimate of $252.05 million. With the consensus EPS estimate being $0.08, the EPS surprise was +50.00%.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their ...

SAN DIEGO, Feb. 13, 2024 (GLOBE NEWSWIRE) -- Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS), a technology company in the defense, national security and global markets, announced today that it is the single recipient for the Command and Control (C2) System Consolidated (CCS-C) Sustainment and Resiliency (C-SAR) indefinite-delivery/indefinite-quantity (IDIQ) contract with a maximum value of $579 million, if all options are exercised. The start date is December 1, 2023, with options going to May 31, 2 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 Commission file number 001-34460 KRATOS DEFENSE & SECURITY SOLUTIONS, INC. (Exact name of Registrant as specified in its charter) Delaware 13-3818604 (State or other jurisdiction of incorporation ...

The upcoming report from Kratos (KTOS) is expected to reveal quarterly earnings of $0.08 per share, indicating no change from the year-ago quarter compared to the year-ago period. Analysts forecast revenues of $252.05 million, representing an increase of 1.1% year over year.Over the past 30 days, the consensus EPS estimate for the quarter has remained unchanged. This demonstrates the covering analysts' collective reassessment of their initial projections during this period.Before a company reveals its earni ...

Kratos Defense & Security Solutions, Inc. (KTOS) recently secured a $50 million contract for Products and Hardware to develop and support Counter Unmanned Aerial Systems (CUAS), Air Defense and Radar Systems.The work related to these awards will be conducted at secure Kratos manufacturing facilities and various customer locations.What’s Ahead?Increasing geopolitical tensions worldwide have prompted nations to strengthen their defense systems manifold. With rapid technological upgrades, Unmanned Aerial Vehic ...

SAN DIEGO, Jan. 16, 2024 (GLOBE NEWSWIRE) -- Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS), a Technology Company in Defense, National Security and Global Markets, announced today that it has recently received approximately $50 million in awards for Products and Hardware, including for and in support of Counter Unmanned Aerial System (CUAS), Air Defense and Radar Systems. The $50 million total includes contracts and programs that were awarded to Kratos on a single award or sole source basis. Kratos ...

SAN DIEGO, Jan. 04, 2024 (GLOBE NEWSWIRE) -- Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS), a technology company in Defense, National Security and Global Markets and Rancher Government Solutions (RGS), the leading provider of enterprise Kubernetes management solutions to the U.S. Government, announced today a strategic partnership to enable customers to seamlessly deploy and scale virtual ground systems using Kratos' software-based OpenSpace® Platform. With increasingly complex and dynamic satcom ...

Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) Q3 2023 Earnings Call November 2, 2023 5:00 PM ET Company Participants Marie Mendoza - Senior Vice President, General Counsel Eric M. DeMarco - President and Chief Executive Officer Deanna Hom Lund - Executive Vice President and Chief Financial Officer Conference Call Participants Seth Seifman - JPMorgan Michael Ciarmoli - Truist Mike Crawford - B. Riley Securities Ken Herbert - RBC Capital Markets Peter Arment - Baird Josh Sullivan - The Benchmark Com ...