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Friday, Jun 14, 2024

Kratos Grows First Quarter Revenue by 20%

DEFENSE: At Least $265M Expected During Current Quarter

SAN DIEGO – Kratos Defense & Security Solutions (Nasdaq: KTOS) essentially broke even in its first quarter while revenues increased 20% year-over-year. The company’s stock was trading near a 52-week high when the Scripps Ranch business reported quarterly financial results earlier this month (May 7).

The defense technology contractor, which is increasing its work in military drones, reported net income of $1.3 million, or a penny a share, on revenue of $277.2 million in the quarter that ended March 31.

In the same quarter of 2023, Kratos Defense reported a net loss of $7 million, or 5 cents per share, on revenue of $231.8 million.

Both service revenue and product sales increased from the first quarter of 2023.

Service revenue grew 16% to $106.5 million, while product sales grew almost 22% to $170.7 million.

‘Increased Confidence’

“Kratos’ position as a leading defense technology company is reflected in our first quarter results, which came in above our forecast,” said Eric DeMarco, Kratos’ president and CEO. “Q1 strength included our unmanned systems, air defense, propulsion system, turbine technologies and Israel-based microwave electronics businesses, and also production and delivery on certain programs that were executed earlier in the year than initially expected. With the 2024 U.S. defense budget now complete, we have increased confidence in our full year 2024 financial forecast.”

Eric DeMarco
President & CEO
Kratos Defense & Security Solutions

Kratos affirmed its previously issued guidance. It said it expects to finish the year with revenue in the range of $1.125 billion to $1.15 billion and adjusted EBITDA of $102 million to $107 million. EBITDA stands for earnings before interest, taxes, depreciation and amortization.

The business released guidance for its second quarter, saying it expects revenue of $265 million to $280 million and projected EBITDA of $20 million to $23 million.

On the day following the earnings announcement, May 8, shares of Kratos closed at $19.84, up 5.7% from the previous day’s closing price of $18.76. Over the last 52 weeks, shares have traded in the range of $12.88 to $21.60.

As of Wednesday (May 15) shares closed at $20.31.

The business reported first quarter bookings of $317.8 million.

Kratos’ Unmanned Systems Segment reported a book-to-bill ratio for the first quarter of 2024 of 1.4 to 1.0. The ratio was 1.0 to 1.0 for the 12 months ended March 31. The business reported bookings of $81.1 million for the three months ended March 31 and bookings of $232.5 million for the 12 months ended March 31.

Kratos Defense & Security Solutions
FOUNDED: 1994 as Wireless Facilities Inc.
CEO: Eric DeMarco
BUSINESS: Defense contractor
REVENUE: $1.04 billion in 2023
STOCK: KTOS (Nasdaq)
EMPLOYEES: Approximately 3,900 full-time, part-time and on-call employees worldwide
WEBSITE: kratosdefense.com
CONTACT: 858-812-7300
NOTABLE: One highlight of the first quarter was pricing an underwritten offering of 16.7 million shares at $18 per share. Net proceeds of the offering were $288 million.


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