Kratos is a defense technology hardware company focused on designing, developing, and manufacturing military-grade systems primarily for the U.S. Department of Defense, allied militaries, and large prime contractors like Northrop Grumman, Lockheed Martin, and Raytheon. Kratos' core products span jet-powered unmanned aerial systems (both target drones and tactical combat drones), hypersonic and rocket systems, microwave electronics for missiles and air defense platforms, satellite ground systems, and C5ISR electronics. Kratos operates through two segments: Kratos Government Solutions (KGS), covering microwave electronics, space and satellite, C5ISR, and turbine technologies; and Unmanned Systems (US), covering target and tactical drones. Kratos sells both as a prime contractor and as a merchant supplier to the primes. Its business model centers on winning multi-year government contracts, with roughly 69% of revenue from fixed-price production contracts and 27% from cost-plus contracts, supported by a funded backlog of approximately $1.2B. Kratos' key competitive strategy is investing its own capital to develop hardware ahead of contract awards, with the goal of securing sole-source production positions once programs mature. Kratos has invested over $310M in its UAS business since 2013 and approximately $315M in space and satellite since 2019. Key growth initiatives include ramping its Valkyrie tactical drone, scaling a hypersonic franchise anchored by the $1.45B MACH-TB 2.0 contract, a joint venture with Rafael to manufacture solid rocket motors, and a turbofan engine partnership with GE Aerospace. Kratos is currently in a heavy investment phase, with elevated capex and several new production facilities coming online in 2026-2028.