Financial Data and Key Metrics - Q2 2024 revenues were $300 1 million, exceeding the estimated range of $265 million to $280 million, driven by strong performance in unmanned systems, turbine technologies, microwave products, and C5ISR businesses [24] - Adjusted EBITDA for Q2 2024 was $29 9 million, surpassing the estimated range of $20 million to $23 million, reflecting higher revenues and a favorable mix of higher-margin revenues [26] - Cash used in operating activities was $2 7 million, impacted by working capital requirements, including increases in receivables and prepaid assets [26] - Free cash flow used from operations was $15 4 million after CapEx of $12 7 million, with investments in manufacturing and production facilities [27] - Consolidated DSO improved from 107 days in Q1 2024 to 103 days in Q2 2024 [27] Business Line Data and Key Metrics - Unmanned Systems business saw organic growth of 61 8% in Q2 2024, driven by strong demand for target drones and tactical drones [25] - Turbine Technologies business exceeded its Q2 forecast, with continued revenue growth and profit expansion, supported by partnerships like the one with General Electric Aerospace [8][9] - Microwave electronics business exceeded its Q2 forecast, with a record backlog and opportunity pipeline, particularly in air defense systems [11] - C5ISR business exceeded its Q2 forecast, with a record backlog and opportunity pipeline, driven by demand for air defense and related systems [13] - Training systems business is growing with increasing margins, supported by global recapitalization of strategic weapon systems [14] Market Data and Key Metrics - International revenues accounted for 20% of total revenues in Q2 2024, with strong growth in Israel and NATO countries [62] - Global air defense system demand, including missiles, radar, and counter-UAS systems, contributed to the strong performance of the C5ISR business [13] - Increased demand for target drones continued in Q2 2024, with bookings of nearly $130 million and a book-to-bill ratio of 1 5:1 for the quarter [16] Company Strategy and Industry Competition - The company’s strategy focuses on internally funded investments to rapidly develop and field affordable, relevant products and systems, positioning it as a leader in defense and technology hardware and software [5][6] - The partnership with General Electric Aerospace for small jet engines is expected to drive future growth, with anticipated production of thousands of low-cost engines for drones and missiles [9] - The company is expanding its manufacturing capabilities, including additive manufacturing, 3D printing, and vertical integration initiatives, to reduce supply chain risks and meet customer demand [10] - The company’s focus on affordability and rapid development is a key differentiator in the industry, particularly in the context of tight defense budgets and the need for cost-effective solutions [6][21] Management Commentary on Operating Environment and Future Outlook - The company remains confident in its 2024 financial guidance and expects future year-over-year organic growth of 10%, with the potential to exceed it [22] - The company’s opportunity pipeline is at a record $12 billion, with significant investments in bid and proposal activities for large programs in unmanned systems, space, cyber, and training businesses [22] - The company is addressing operational challenges, including the hiring and retention of qualified personnel, particularly those with national security clearances [23] - The company is preparing for potential federal fiscal 2025 continuing resolution, which could impact new program contract awards and existing production contract funding [28] Other Important Information - The company’s space and satellite business is being impacted by delays in government programs and technical issues with software-defined satellites, but it expects to return to growth trajectory with upcoming DoD program opportunities [15] - The company is planning the expansion of its Oklahoma drone manufacturing capacity, including a potential additional facility, to meet demand for tactical and target drones [18] - The company’s Ghost Works is developing new and evolving weapon systems, including AI integration, which could have a game-changing impact in future conflicts [19] Q&A Session Summary Question: Impact of Valkyrie contract on guidance and cash flow - If a contract is awarded, costs in PP&E would be transferred to inventory and unbilled receivables, with revenue recorded based on the percentage of completion [31] - The timing of the contract is possible in the second half of 2024 but more probable in 2025 [32] Question: Customer preferences for Valkyrie variants - The company is offering different launch options for Valkyrie, including rail launch, trolley launch, and internal gear, to meet various customer priorities [33] Question: Economics of the GE Aerospace partnership - The company has multiple customers waiting for the engines, and the economics of the partnership are expected to be favorable, with a fair revenue and profit split [34][35] Question: Future of hypersonic testing and revenue potential - The company expects a ramp-up in hypersonic testing activity in 2025, with significant revenue potential from its Erinyes hypersonic glide vehicle and other hypersonic systems [39][40] Question: Scaling up engine production capacity - The company is preparing to produce hundreds to thousands of engines annually, with significant opportunities in programs like ERAM, MACE, and CAMs [41][42] Question: Growth in the bid pipeline - The bid pipeline expanded by $1 billion in Q2 2024, driven by opportunities in unmanned systems, space, and training businesses [43][44] Question: Outlook for the hypersonic activity pipeline - The company expects incremental revenue of $50 million to $100 million in 2025, $100 million to $150 million in 2026, and $150 million to $200 million annually thereafter from hypersonic activities [45] Question: Profitability in the Unmanned Systems business - Profitability will depend on the mix of programs and leverage from fixed infrastructure costs, with notable strength from international drone deliveries [47] Question: Expansion of Oklahoma manufacturing capacity - The company is expanding its Oklahoma facilities for tactical and target drones, while the low-cost turbofan engine production with GE Aerospace is likely to be located outside Tulsa [49] Question: Position in the solid rocket motor market - The company is considering becoming a merchant supplier of solid rocket motors, given the high demand and limited qualified suppliers in the market [51][52] Question: Impact of potential changes in Ukraine support - The company’s primary exposure to Ukraine is through NATO countries rearming, and it does not expect a resolution in Ukraine to significantly impact its business [78] Question: Strong book-to-bill in Unmanned Systems - The strong book-to-bill ratio in Q2 2024 was primarily driven by target drone orders, with potential for a significant tactical drone order in the near future [80][81] Question: Hiring challenges in the Turbine Technologies business - The company faces challenges in hiring and retaining turbo machinery and propulsion engineers, which remains a significant operational priority [84] Question: Lessons learned from munitions expenditure in Israel and Ukraine - The company expects continued strong demand for munitions and air defense systems, driven by the need to replenish expended inventory and the lessons learned from recent conflicts [88][89] Question: Margin improvement in Services revenues - The margin improvement in Services revenues was driven by the mix of programs in Q2 2024, with no specific factors identified [92]

Kratos (KTOS) came out with quarterly earnings of $0.14 per share, beating the Zacks Consensus Estimate of $0.08 per share. This compares to earnings of $0.09 per share a year ago. These figures are adjusted for nonrecurring items. This quarterly report represents an earnings surprise of 75%. A quarter ago, it was expected that this military contractor would post earnings of $0.05 per share when it actually produced earnings of $0.11, delivering a surprise of 120%. Over the last four quarters, the company h ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended June 30, 2024 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission file number 001-34460 KRATOS DEFENSE & SECURITY SOLUTIONS, INC. (Exact name of registrant as specified in its charter) Delaware 13-381 ...

Exhibit 99.1 Press Contact: Yolanda White 858-812-7302 Direct Investor Information: 877-934-4687 investor@kratosdefense.com Kratos Reports Second Quarter 2024 Financial Results Second Quarter 2024 Revenues of $300.1 Million Increased 16.8 Percent over Second Quarter 2023 Revenues of $256.9 Million, including 16.7 Percent Organic Growth Second Quarter 2024 Unmanned Systems Revenues of $85.8 Million Increased 64.7 Percent over Second Quarter 2023 Revenues of $52.1 Million, including 61.8 Percent Organic Growt ...

Investors interested in Aerospace stocks should always be looking to find the best-performing companies in the group. Is Kratos (KTOS) one of those stocks right now? A quick glance at the company's year-to-date performance in comparison to the rest of the Aerospace sector should help us answer this question. Within the past quarter, the Zacks Consensus Estimate for KTOS' full-year earnings has moved 14.5% higher. This is a sign of improving analyst sentiment and a positive earnings outlook trend. To break t ...

FARNBOROUGH, United Kingdom, July 22, 2024 (GLOBE NEWSWIRE) -- Kratos Defense & Security Solutions, Inc. (Nasdaq: KTOS), a technology company in Defense, National Security and Global Markets, today announced that GE Aerospace (NYSE:GE) and Kratos Turbine Technologies, a division of Kratos Defense & Security Solutions, Inc., signed a Memorandum of Understanding to partner on the development and production of small affordable engines that could potentially power unmanned aerial systems (UAS), collaborative co ...

For those looking to find strong Aerospace stocks, it is prudent to search for companies in the group that are outperforming their peers. Kratos (KTOS) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? By taking a look at the stock's year-to-date performance in comparison to its Aerospace peers, we might be able to answer that question. The Zacks Rank is a proven model that highlights a variety of stocks with the right c ...

SAN DIEGO, July 02, 2024 (GLOBE NEWSWIRE) -- Kratos Defense & Security Solutions, Inc. (Nasdaq: KTOS), a technology company in Defense, National Security and Global Markets, today announced the successful demonstration of the second of three Valkyrie launch methods: the Kratos Trolley Launch System (KTLS). The KTLS enables the Valkyrie to take off from traditional runways or straight roads, without requiring Rocket Assist Take Off (RATO) or other acceleration producing devices. The KTLS is unpowered with ta ...

SAN DIEGO, June 27, 2024 (GLOBE NEWSWIRE) -- Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS), a technology company in the defense, national security and global markets, announced today that its Space & Missile Defense Systems Business Unit, a part of Kratos' Defense & Rocket Support Systems (DRSS) Division, supported the Missile Defense Agency (MDA) and the Naval Surface Warfare Center (NSWC), in the successful launch and flight of the Kratos Erinyes™ Hypersonic Test Bed, on June 12, 2024, from the ...

SAN DIEGO, June 24, 2024 (GLOBE NEWSWIRE) -- Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS), a technology company in Defense, National Security and Global Markets, today announced the addition of Claire Burghoff to its corporate team as the Vice President of Government Affairs & Corporate Communications. In this role, Claire will lead corporate communications for Kratos and will support the company's strategic initiatives in government affairs, leveraging her extensive experience and ability to mar ...