Kratos Defense
Kratos Defense builds jet-powered attritable drones, aerial targets, hypersonic vehicles, and C5ISR systems for the U.S. military and allied customers.
Background
Kratos Defense & Security Solutions was founded in 1994 and is headquartered in San Diego, California, operating under CEO Eric M. DeMarco.
The company grew through a series of defense acquisitions to become a primary provider of advanced unmanned systems and national security products, most recently absorbing Orbit Technologies, Ltd. into its fiscal 2026 structure.
Kratos's core product lines center on jet-powered unmanned aerial systems — most visibly the XQ-58 Valkyrie family of attritable tactical drones — alongside aerial target drones including the BQM-177A Subsonic Sea-Skimming Aerial Target and GQM-163, hypersonic vehicles developed under the Joint Hypersonics Transition Office, loitering munition propulsion systems, microwave electronic products for radar and counter-UAS applications, and virtualized satellite ground systems for C2 and TT&C.
Kratos operates primarily through two segments — Kratos Government Solutions and Unmanned Systems — selling directly to U.S. military services, combatant commands, and foreign military sales customers.
The company competes for large prime contracts while also partnering with major primes such as Northrop Grumman on programs like MUX TACAIR.
Linked records
Wired to the rest of BattlePolicy — the systems it builds in the Lexicon and the contracts it wins in the Procurement Tracker. Every link below is a record in our own datasets.
- United States (Marine Corps) — XQ-58A Valkyrie
- United States (Marine Corps) — XQ-58 Valkyrie mission system integration
- United States (Navy) — XQ-58A Valkyrie
- United States (AFRL) — XQ-58A Valkyrie
- Japan — BQM-177A Subsonic Sea-Skimming Aerial Targets (SSAT) and GQM-163 target drones, with Aegis Weapon System follow-on technical support
- none linked yet
Financial footing
- Prime for jet-powered tactical UAV flight-test programs
Kratos is publicly traded and does not carry a conventional venture-funding history. In February 2026 the company priced a public stock offering of 14,285,714 shares at $84.00 per share, generating expected net proceeds of approximately $1.173 billion. An analyst note from late February 2026 placed the equity market capitalization at approximately $16.37 billion, based on roughly 170.33 million shares outstanding at a share price of $96.08.
Bloomberg and Investors.com described the February 2026 offering as a $1.0–$1.2 billion share sale. Kratos has a U.S. Space Force prime contract with a potential ceiling of $446.8 million. Fiscal 2026 guidance incorporates the Orbit Technologies acquisition. No private venture rounds apply given its public status.
Major customers & contracts
Joined live from the Procurement & Contracts Tracker — real award/announcement records.
| Customer | System | Scale / detail | Status |
|---|---|---|---|
| United States (Marine Corps) | XQ-58A Valkyrie | ~$15.5 million total | signed |
| United States (Marine Corps) | XQ-58 Valkyrie mission system integration | $34.8 million | signed |
| United States (Navy) | XQ-58A Valkyrie | ~$15.5 million total | signed |
| United States (AFRL) | XQ-58A Valkyrie | $17.8 million | signed |
| Japan | BQM-177A Subsonic Sea-Skimming Aerial Targets (SSAT) and GQM-163 target drones, with Aegis Weapon System follow-on technical support | MDE: $2.6M; non-MDE: $110.4M | tender |
Further disclosed customers & programs (public reporting):
The U.S. Marine Corps awarded Kratos two XQ-58 Valkyrie contracts totaling approximately $50.3 million — roughly $15.5 million for the aircraft and $34.8 million for mission system integration. The U.S. Navy awarded a separate XQ-58A Valkyrie contract also valued at approximately $15.5 million. The Air Force Research Laboratory awarded Kratos $17.8 million for the XQ-58A program. The U.S. Space Force awarded Kratos a prime contract with a ceiling of up to $446.8 million.
The Department of Defense awarded Kratos approximately $1 billion under the Gauntlet Drone Dominance Program for small lethal drones over a two-year period. Kratos and Northrop Grumman jointly received a $230 million MUX TACAIR award split approximately evenly across a 24-month period of performance. Japan is a notified FMS customer for the BQM-177A SSAT and GQM-163 target drones with Aegis Weapon System support, valued at $2.6 million MDE and $110.4 million non-MDE.
Leadership & contact surface
Leadership: Eric DeMarco
Official site: https://www.kratosdefense.com
Competitive position
Against Northrop Grumman, Kratos competes directly in tactical unmanned aircraft and aerial targets while also partnering with Northrop on MUX TACAIR; Kratos's edge is lower-cost attritable airframes, but Northrop's scale and integration depth give it leverage on large platform programs. Against AeroVironment in loitering munitions and small UAS, Kratos brings jet-powered speed and range the smaller AV platforms cannot match, though AeroVironment has a larger installed base of fielded systems at the tactical edge.
Against Anduril in autonomous attritable air vehicles, both compete directly for Collaborative Combat Aircraft-adjacent roles; Kratos holds an early-mover advantage with the XQ-58 and demonstrated AFRL flight history, while Anduril's software-first architecture and faster iteration pace are a genuine threat. Against General Atomics in unmanned aircraft, Kratos targets the lower-cost attritable tier rather than the persistent ISR tier where GA dominates. The attritable-drone market is expanding rapidly under Replicator and Gauntlet, favoring Kratos's cost model.
Battlefield relevance
No confirmed combat use to date.
Sources & verification
- BattlePolicy – XQ-58 Valkyrie program tracker
- Federal Register – Japan BQM-177A/GQM-163 FMS notification
- https://www.bloomberg.com/news/articles/2026-02-26/drone-maker-kratos-defense-seeks-1-billion-in-share-sale
- https://www.investing.com/news/transcripts/earnings-call-transcript-kratos-defense-q4-2025-beats-forecasts-stock-dips-93CH-4520299
- https://www.kratosdefense.com/newsroom/kratos-reports-first-quarter-2026-financial-results-and-increases-fiscal-fy26-financial-guidance
- https://www.investors.com/news/kratos-defense-stock-offering-1-2-billion-ktos-stock-drones/
- https://finance.yahoo.com/markets/stocks/articles/look-kratos-defense-ktos-valuation-221946133.html
- https://www.kratosdefense.com/newsroom/kratos-defense-security-solutions-inc-prices-public-offering-of-common-stock-4
- https://ir.kratosdefense.com/static-files/59fce3a6-1e0e-49e8-9df6-26d9ecb38eb2
- https://www.sahmcapital.com/news/content/a-look-at-kratos-defense-security-solutions-ktos-valuation-after-major-us-space-force-contract-win-2026-04-12
- https://dashboard.channelchek.com/wp-content/uploads/pdf/KTOS_20260223_28065.pdf
- https://finance.yahoo.com/news/kratos-defense-poised-gain-higher-140800456.html
- https://www.youtube.com/watch?v=SnFWtzos0yU
- https://simplywall.st/stocks/us/capital-goods/nasdaq-ktos/kratos-defense-security-solutions
- https://www.kratosdefense.com
- https://www.kratosdefense.com/newsroom/kratos-reports-fourth-quarter-and-full-year-2025-financial-results
- https://www.stocktitan.net/sec-filings/KTOS/424b5-kratos-defense-security-solutions-inc-prospectus-supplement-deb-b47fefd6329c.html