Kratos sees double-digit growth in 2023 as it invests for future

Kratos continues to develop its XQ-58 Valkyrie drone to meet new customer requirements. The Valkyrie demonstrator made its first flight in March 2019 (pictured). (US Air Force)

Kratos saw significant revenue growth in 2023 and is investing internally for future programmes. Revenues of USD1.04 billion resulted from 15.5% growth and 12.6% organic growth compared with 2022, according to a company statement on 13 February.

In the fourth quarter (Q4) of 2023, Kratos saw revenues of USD237.8 million from 9.8% growth and 7.3% organic growth compared with the third quarter of 2023.

The fourth quarter also saw a company-funded research and development expense of USD8 million related to the ongoing development of the OpenSpace virtual; software-based command-and-control (C2); telemetry, tracking, and control (TT&C); and other ground systems, Kratos said. Eric DeMarco, president and CEO of Kratos, said in an earnings call on 13 February that the company had made significant investments in potential “transformational growth areas”.

The company noted reduced revenues in its Unmanned Systems segment, which it attributed to reduced tactical drone activity.

During the call, DeMarco reviewed Kratos' business strategy, highlighting internal investment to bring systems, software, and products to market quickly. The company said it takes a conservative approach, bidding for prime contractor positions only when the required internal investment is acceptable, and Kratos has a high probability of winning. Otherwise, it will team with a larger system integrator partner that is well-positioned to win a contract.

In 2024 Kratos expects to see growth in satellite communications; jet engines for drones, missiles, loitering munitions, and supersonic and space systems; hypersonic systems; command, control, communications, computers, cyber, intelligence, surveillance, and reconnaissance (C5ISR); microwave electronics for missiles, radars, and counter-unmanned aircraft systems (C-UASs); and augmented reality training systems, DeMarco said.