Kratos Defense plans $500 million common stock offering

SAN DIEGO - Defense technology firm Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) announced Wednesday its intention to offer $500 million of common stock shares in an underwritten offering.

The company stated that underwriters will have a 30-day option to purchase up to an additional $75 million in shares. All shares in the offering will be sold by Kratos through an effective shelf registration statement previously filed with the Securities and Exchange Commission. With revenue of $1.16 billion and growing at 7.32% year-over-year, the company appears positioned for expansion, though current market prices suggest the stock may be overvalued.

According to the press release, Kratos plans to use the net proceeds to fund investments and capital expenditures related to National Security programs, finance targeted acquisitions, and for general corporate purposes including debt reduction and offering expenses. InvestingPro data shows the company operates with a moderate debt-to-equity ratio of 0.21, with 14 additional ProTips available to subscribers through the comprehensive Pro Research Report.

Baird, RBC Capital Markets, Truist Securities, and Raymond James are serving as joint book-running managers for the offering, which remains subject to market and other conditions.

The San Diego-based company describes itself as a technology provider addressing defense, national security, and commercial markets, with focus areas including virtualized ground systems for satellites, unmanned aerial drone systems, hypersonic vehicles, and C5ISR electronic products.

The announcement comes as Kratos seeks to scale operations for what it described as "large, mission critical National Security priorities related to existing programs, recent program awards and significant high-probability pipeline opportunities."

The offering will be made through a prospectus supplement and accompanying prospectus to be filed with the SEC.

This article is based on information contained in a press release statement from Kratos Defense & Security Solutions.

In other recent news, Kratos Defense & Security Solutions reported a strong first quarter in 2025, with revenue reaching $302.6 million, surpassing analyst estimates of $285 million to $295 million. The company’s adjusted EBITDA also exceeded expectations, coming in at $26.7 million. Kratos secured a $1.45 billion MACH-TB 2.0 contract for hypersonic testing, bolstered by an additional $400 million in funding. The defense contractor also announced a formal teaming agreement with GE Aerospace to advance propulsion technologies for unmanned aerial systems, including the development of the GEK800 Engine. Benchmark raised its price target for Kratos from $40 to $48, maintaining a Buy rating, citing the Defense Budget Reconciliation Bill that includes significant funding for Kratos-related programs. Additionally, Kratos shareholders approved all board nominees and ratified Deloitte & Touche LLP as the independent auditor for the fiscal year ending December 28, 2025. These developments reflect Kratos’ ongoing strategic initiatives and partnerships aimed at enhancing its capabilities in the defense sector.

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