Kratos Awarded $116.7 Million Prime Contract from the U.S. Space Development Agency for Ground System to Support Advanced Fire Control Missions

Rhea-AI Summary

Kratos Defense & Security Solutions (NASDAQ: KTOS) has secured a $116.7 million contract over five years from the U.S. Space Development Agency to create and operate an Advanced Fire Control Ground Infrastructure (AFCGI). The project supports the Advanced Fire Control program, focusing on missile defense capabilities, particularly tracking hypersonic missiles through the FOO Fighter program.

As the prime contractor, Kratos will lead a team including ASRC Federal Systems Solutions, Peraton, Sphinx Defense, and Stellar Solutions to deliver ground segment resources, manage operations centers, and provide cloud services. The system will utilize Kratos's OpenSpace Ground Platform to ensure interoperability across multiple AFC constellations.

Positive

• Secured major $116.7 million government contract over 5 years
• Prime contractor position in strategic defense infrastructure project
• Implementation of proprietary OpenSpace Platform technology

Negative

• None.

Insights

Defense Technology Analyst

This $116.7 million contract win represents a significant strategic advancement for Kratos in the critical space defense sector. The Advanced Fire Control Ground Infrastructure project positions KTOS as a key player in next-generation missile defense systems, particularly against hypersonic threats. The multi-year contract provides steady revenue visibility while establishing Kratos' OpenSpace platform as a central integration hub for multi-vendor satellite operations.

The contract's structure as a government-owned, contractor-operated facility creates a stable, long-term revenue stream while minimizing capital expenditure requirements. The inclusion of cloud services and software development components offers higher-margin opportunities compared to traditional hardware-focused defense contracts. Most importantly, this positions Kratos at the forefront of the rapidly growing space defense market, particularly in counter-hypersonic capabilities where significant future investment is expected.

Government Contracts Specialist

The contract structure demonstrates exceptional value with several positive aspects:

• Five-year duration provides stable, predictable revenue
• Prime contractor position gives Kratos strategic control and higher profit potential
• GOCO facility arrangement reduces operational risk while maintaining steady income
• Cloud services component allows for scalable growth opportunities

The selection of strong subcontractors including ASRC Federal and Peraton enhances execution capabilities while spreading operational risk. The demonstration sandbox nature of the project could lead to additional contract opportunities as successful capabilities are transitioned to operational programs.

Kratos Led Team Will Design, Implement and Operate Ground Infrastructure Supporting Interoperability Across Multi-Vendor LEO Constellations Using its Kratos OpenSpace® Platform

SAN DIEGO, Nov. 13, 2024 (GLOBE NEWSWIRE) -- Kratos Defense & Security Solutions, Inc. (Nasdaq: KTOS), a technology company in the defense, national security and global markets, announced today that it has been awarded a contract valued at a maximum of $116.7 million over five years to create and operate an Advanced Fire Control Ground Infrastructure (AFCGI) for the U.S. Space Development Agency’s (SDA) Advanced Fire Control (AFC) program. The AFC will deliver integrated space and ground elements to demonstrate advanced fire control missions for missile defense.

Advanced fire control brings highly sophisticated systems for space-based sensing. These systems enable precise, real-time coordination for tracking operations in space for effective responses to threats. Among its applications, the AFCGI will support SDA’s Fire-control On Orbit-support-to-the-war Fighter program, also known as FOO Fighter or F2, which is tasked with detecting and tracking advanced missile threats, including hypersonic missiles.

As the AFCGI prime contractor, Kratos will lead a team of partner companies to:

• Deliver and manage ground segment resources, including ground entry points and terrestrial network connections;
• Fit-out and manage a government-owned, contractor-operated (GOCO) facility called the Demonstration Operations Center;
• Manage a government-procured, contractor-operated cloud environment to provide cloud services, including hosting space vehicle mission operations center software and interfacing with mission partner systems; and,
• Provide program management, systems engineering, integration, verification, and operations and maintenance of the AFC ground infrastructure.

Members of the Kratos-led team include ASRC Federal Systems Solutions, LLC, Peraton, Inc., Sphinx Defense, Inc. and Stellar Solutions, Inc.

Core to the AFCGI, Kratos will provide a Ground Resource Manager (GRM) which will be built for the FOO Fighter program and designed to support any future fire control demonstrations. Built upon Kratos’s OpenSpace Ground Platform, the GRM will ensure interoperability to support new space vehicles built by multiple manufacturers from multiple AFC constellations. OpenSpace is an orchestrated, software-defined and cloud-native platform based on accepted industry standards. With it, these satellite manufacturers will be able to synchronize their Command and Control (C2) missions into the AFCGI infrastructure, and new network elements and software applications will integrate seamlessly into the AFCGI. The GRM will act as the hub for the AFC constellations, serving to demonstrate modern capabilities as they evolve to support increasingly sophisticated operational programs.

Phil Carrai, President of Kratos’ Space Division stated, “Advancements in missile technology and hypersonics that can travel at more than 3000 mph present new adversarial threats and will require new defensive capabilities to identify, track and respond to them rapidly. The AFCGI will serve as a standing sandbox for exploring and validating new technologies, solutions and techniques to address these threats with commensurate speed and agility. The GRM will enable the Space Force to capitalize on best of breed technologies from across the most advanced developers, and seamlessly integrate and orchestrate their operations.”

About Kratos OpenSpace
Kratos’ OpenSpace family of solutions enables the digital transformation of satellite ground systems to become a more dynamic and powerful part of the space network. The family consists of three product lines: OpenSpace SpectralNet for converting satellite RF signals to be used in digital environments; OpenSpace quantum products, which are virtual versions of traditional hardware components; and the OpenSpace Platform, the first commercially available, fully orchestrated, software-defined ground system. These three OpenSpace lines enable government agencies, commercial satellite operators and other service providers to implement digital operations at their own pace and in ways that meet their unique mission goals and business models. For more information about the OpenSpace family visit www.KratosDefense.com/OpenSpace.

About Kratos Defense & Security Solutions
Kratos Defense & Security Solutions, Inc. (NASDAQ: KTOS) is a technology, products, system and software company addressing the defense, national security, and commercial markets. Kratos makes true internally funded research, development, capital and other investments, to rapidly develop, produce and field solutions that address our customers’ mission critical needs and requirements. At Kratos, affordability is a technology, and we seek to utilize proven, leading edge approaches and technology, not unproven bleeding edge approaches or technology, with Kratos’ approach designed to reduce cost, schedule and risk, enabling us to be first to market with cost effective solutions. We believe that Kratos is known as an innovative disruptive change agent in the industry, a company that is an expert in designing products and systems up front for successful rapid, large quantity, low cost future manufacturing which is a value add competitive differentiator for our large traditional prime system integrator partners and also to our government and commercial customers. Kratos intends to pursue program and contract opportunities as the prime or lead contractor when we believe that our probability of win (PWin) is high and any investment required by Kratos is within our capital resource comfort level. We intend to partner and team with a large, traditional system integrator when our assessment of PWin is greater or required investment is beyond Kratos’ comfort level. Kratos’ primary business areas include virtualized ground systems for satellites and space vehicles including software for command & control (C2) and telemetry, tracking and control (TT&C), jet powered unmanned aerial drone systems, hypersonic vehicles and rocket systems, propulsion systems for drones, missiles, loitering munitions, supersonic systems, space craft and launch systems, C5ISR and microwave electronic products for missile, radar, missile defense, space, satellite, counter UAS, directed energy, communication and other systems, and virtual & augmented reality training systems for the warfighter. For more information, visit www.KratosDefense.com.

Notice Regarding Forward-Looking Statements

Certain statements in this press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are made on the basis of the current beliefs, expectations and assumptions of the management of Kratos and are subject to significant risks and uncertainty. Investors are cautioned not to place undue reliance on any such forward-looking statements. All such forward-looking statements speak only as of the date they are made, and Kratos undertakes no obligation to update or revise these statements, whether as a result of new information, future events or otherwise. Although Kratos believes that the expectations reflected in these forward-looking statements are reasonable, these statements involve many risks and uncertainties that may cause actual results to differ materially from what may be expressed or implied in these forward-looking statements. For a further discussion of risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to the business of Kratos in general, see the risk disclosures in the Annual Report on Form 10-K of Kratos for the year ended December 31, 2023, and in subsequent reports on Forms 10-Q and 8-K and other filings made with the SEC by Kratos.

Press Contact:
Claire Burghoff
claire.burghoff@kratosdefense.com

Investor Information:
877-934-4687
investor@kratosdefense.com

FAQ

What is the value of Kratos's (KTOS) Space Development Agency contract?

Kratos (KTOS) was awarded a contract valued at $116.7 million over five years from the U.S. Space Development Agency.

What is the purpose of Kratos's (KTOS) Advanced Fire Control Ground Infrastructure?

The AFCGI will support missile defense capabilities, specifically detecting and tracking advanced missile threats, including hypersonic missiles, through the FOO Fighter program.

Which companies are partnering with Kratos (KTOS) on the AFCGI contract?

The Kratos-led team includes ASRC Federal Systems Solutions, Peraton, Sphinx Defense, and Stellar Solutions.

What technology will Kratos (KTOS) use for the AFCGI project?

Kratos will implement its OpenSpace Ground Platform, which is an orchestrated, software-defined and cloud-native platform designed to ensure interoperability across multiple AFC constellations.