Kratos Breaks Ground on $50 Million State-of-the-Art Hypersonic System Indiana Payload Integration Facility

Rhea-AI Summary

Kratos Defense & Security Solutions (NASDAQ: KTOS) has broken ground on a new $50 million Hypersonic System Indiana Payload Integration Facility (IPIF) in Crane, Indiana. The 68,000-square-foot complex will support hypersonic vehicle and payload activities for the Multi-Service Advanced Capabilities Hypersonic Testbed (MACH-TB) program.

The facility, expected to be operational by end of 2026, will create over 100 high-tech jobs with average annual salaries exceeding $80,000. The IPIF aims to accelerate the development of advanced weapons systems and boost the tempo of flight testing for next-generation hypersonic systems.

This investment complements Kratos' recent partnership with RAFAEL Advanced Defense Systems in launching Prometheus Energetics , a solid rocket motor supplier located in Bloomfield, Indiana. Kratos was recently selected as the prime contractor for the MACH-TB 2.0 program, leading efficiency initiatives to increase hypersonic flight test tempo and effectiveness.

Positive

• $50 million strategic investment in hypersonic testing infrastructure
• Creation of 100+ high-tech jobs with $80,000+ average annual salary
• Prime contractor selection for MACH-TB 2.0 program
• Expansion of operations through partnership with RAFAEL in Prometheus Energetics
• Only company delivering both propulsion and flyer systems in the sector

Negative

• Facility won't be operational until end of 2026
• Significant capital expenditure required ($50M+)

Insights

Defense Analyst

Kratos' $50 million investment in its new Indiana Payload Integration Facility represents a significant strategic positioning in the hypersonic weapons sector, which has become a top DoD priority. The 68,000-square-foot complex will support critical payload integration and testing capabilities for the Multi-Service Advanced Capabilities Hypersonic Testbed (MACH-TB) program, enhancing the company's ability to accelerate hypersonic testing from concept to flight.

This facility strengthens Kratos' unique competitive advantage as the only defense contractor delivering both propulsion systems (Dark Fury, Zeus, and Oriole Solid Rocket Motors) and hypersonic vehicles (Erinyes Hypersonic Flyer). This vertical integration approach differentiates Kratos in the defense market, potentially improving operational efficiency and margins on future hypersonic contracts.

Most notably, Kratos' selection as prime contractor for the MACH-TB 2.0 program under Task Area 1 validates their technical capabilities and positions them favorably for future hypersonic development contracts. The facility is designed to supplement existing DoD and NASA testing infrastructure, addressing a critical bottleneck in the hypersonic development pipeline.

The facility complements Kratos' recent joint venture with RAFAEL (Prometheus Energetics) for solid rocket motor production, demonstrating a comprehensive ecosystem approach to capturing market share in hypersonic systems. With 100+ high-tech jobs being created and strong backing from both Indiana government officials and DoD leadership, this investment represents a well-orchestrated expansion into a defense sector receiving prioritized funding.

Investment Strategist

Kratos' groundbreaking on this $50 million hypersonic testing facility represents approximately 1% of the company's current market capitalization - a measured but strategic investment that could generate substantial long-term returns. The facility addresses a critical capability gap in U.S. hypersonic testing infrastructure, potentially positioning Kratos to capture significant contract value as hypersonic weapon development accelerates.

Investors should note that operational readiness isn't expected until end-2026, meaning this investment won't drive immediate revenue growth. However, Kratos' selection as prime contractor for the MACH-TB 2.0 program already validates their capabilities in this domain and suggests strong potential for follow-on contracts.

The announcement reinforces Kratos' evolution from a primarily unmanned systems company to a more diversified defense technology provider with capabilities across multiple high-growth defense segments. Their unique position as the only company delivering both propulsion and vehicle systems creates a competitive moat that could lead to expanded margins and more predictable revenue streams.

The Indiana facility also demonstrates management's commitment to vertical integration, controlling critical elements of the hypersonic development pipeline rather than serving solely as a component supplier. This strategic expansion, coupled with strong state and DoD support, indicates Kratos is successfully positioning itself within the hypersonic weapons industrial base - a sector likely to see sustained funding priority regardless of political shifts due to competition with near-peer adversaries developing similar capabilities.

SAN DIEGO, March 18, 2025 (GLOBE NEWSWIRE) -- Kratos Defense & Security Solutions, Inc. (Nasdaq: KTOS), a technology company specializing in defense, national security, and global markets, today announced the groundbreaking of Kratos’ Hypersonic System Indiana Payload Integration Facility (IPIF) in Crane, Indiana. This state-of-the-art 68,000-square-foot office, laboratory, integration and test complex will support critical hypersonic vehicle and payload activities and systems for the Multi-Service Advanced Capabilities Hypersonic Testbed (MACH-TB) program. The project demonstrates Kratos’ commitment to advancing hypersonic system payload integration and test capabilities and expanding crucial infrastructure needed to accelerate the time to Mach 5+ flight testing.

Rendering of the Kratos Hypersonic System Indiana Payload Integration Facility

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/7a0c69ad-a977-4380-b5a6-062665ddb264 

With an investment in construction and equipment estimated to exceed $50 million, the Kratos IPIF is being designed for rapid, affordable preparation of experimental payloads to significantly boost the tempo of flight testing for next-generation hypersonic systems and technologies and to accelerate the development of advanced weapons systems. The facility is expected to create over 100 high-tech jobs, with an estimated average annual wage of $80,000+. IPIF operational readiness is expected by the end of 2026.

The hypersonic system IPIF expands Kratos’ footprint in Indiana and complements the recently announced agreement with Kratos and RAFAEL Advanced Defense Systems Ltd., launching Prometheus Energetics LLC (Prometheus), a new U.S.-based merchant supplier of Solid Rocket Motors (SRMs) and other energetics with Prometheus headquarters and production campus located on an approximate 550-acre site in Bloomfield, Indiana, at ACMI’s National Security Industrial Hub (NSIH).

Eric DeMarco, President and CEO of Kratos, said: “The Kratos Hypersonic System Indiana Payload Integration Facility represents a strategic investment in our Nation’s hypersonic infrastructure, workforce and capabilities. Kratos is committed to achieving, if not exceeding, the MACH-TB program’s primary goals, which include, increasing the cadence of flight tests and to mature and qualify advanced hypersonic technologies. Kratos’ IPIF will provide a vital commercial launch vehicle environmental test and assembly capability to supplement existing DoD and NASA facilities.”

Mike Braun, Governor of Indiana, welcomed Kratos, highlighting the state’s growing role in national security and advanced defense technology: “Kratos' decision to establish operations here further cements Indiana’s position as a national leader in defense innovation and advanced manufacturing. This investment will not only create high-paying jobs for Hoosiers but will also strengthen our state’s role in supporting the Department of Defense’s critical missions. We are proud to welcome Kratos to Indiana and look forward to future partnership and the economic and technological benefits Kratos will bring to our defense ecosystem and the region.”

Mr. George Rumford, Director of the DoD Test Resource Management Center (TRMC), emphasized the importance of collaboration between DoD and industry to advance national strategic objectives: "As the U.S. accelerates hypersonic development and testing, we must take a ‘whole-of-nation’ approach to ensure our warfighters have the capabilities they need to stay ahead of emerging threats. State-of-the-art facilities in industry such as Kratos’ Indiana Payload Integration Facility will significantly enhance our ability to rapidly test next-generation hypersonic systems.”

The hypersonic system IPIF marks one of several strategic investments Kratos is making in the region located near Naval Support Activity Crane. Designed to serve as a key hub for defense innovation, the facility will support integration activities working with government and industry partners.

Interior of the Kratos Hypersonic System Indiana Payload Integration Facility

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/1495ce30-942e-484f-8401-4beaad10981b

State and local leaders joined Kratos executives at the groundbreaking ceremony, recognizing the facility’s importance in supporting regional economic growth and technological advancement.

"We are thrilled to officially welcome Kratos to the WestGate@Crane Technology Park and eagerly anticipate their success in the Indiana Uplands’ regional defense community,” said Bryant Niehoff, CEO of the Uplands Science & Technology Foundation (USTF), a nonprofit foundation established to lead the physical development and enhance the vitality of WestGate@Crane. “Collaboration is at the very foundation of our tri-county technology park. Today’s announcement is a testament to our collaborative efforts, backed by local support from the Daviess County Council and Economic Development Corporation, as well as regional and state-level commitment through the IEDC’s READI program, spearheaded in our region by the Regional Opportunity Initiatives (ROI).” 

Kratos remains at the forefront of hypersonic and advanced technology development and testing, providing affordable, high-performance solutions to meet the needs of the U.S. military and allied nations. Kratos was recently selected as the prime contractor for the Multi-Service Advanced Capability Hypersonic Test Bed (MACH-TB) 2.0 program under Task Area 1, leading the effort to implement efficiency and affordability initiatives to increase hypersonic flight test tempo and effectiveness. Kratos is the only company delivering both propulsion and flyer systems, which includes Kratos’ low cost Erinyes Hypersonic Flyer, Dark Fury, Zeus and Oriole Solid Rocket Motors, along with other Kratos systems and technologies. Kratos provides unmatched innovation, disruptive capabilities, mission responsiveness and affordability to our customers across our portfolio of systems.

For more information on Kratos and its hypersonic programs, visit www.kratosdefense.com.

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, advanced 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 29, 2024, 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 cost and size of KTOS's new Hypersonic System facility in Indiana?

The facility costs $50 million and spans 68,000 square feet, located in Crane, Indiana.

How many jobs will KTOS's new Indiana facility create and what's the average salary?

The facility will create over 100 high-tech jobs with average annual salaries exceeding $80,000.

When will KTOS's Indiana Payload Integration Facility become operational?

The facility is expected to be operational by the end of 2026.

What is the purpose of KTOS's new Hypersonic System facility?

The facility will support hypersonic vehicle and payload activities, accelerating flight testing for next-generation hypersonic systems and advanced weapons development.

What recent contract did KTOS win related to hypersonic testing?

Kratos was selected as prime contractor for the Multi-Service Advanced Capability Hypersonic Test Bed (MACH-TB) 2.0 program.