Kratos Defense & Security Solutions to Join S&P MidCap 400 Index

Rhea-AI Summary

Kratos Defense & Security Solutions (NASDAQ: KTOS) announced its upcoming addition to the S&P MidCap 400 Index, upgrading from the S&P SmallCap 600 Index. This transition reflects the company's significant growth and market recognition in unmanned systems, hypersonics, space, propulsion, and national security solutions.

The inclusion in the MidCap 400, a benchmark index for mid-sized U.S. companies, validates Kratos' financial growth and strategic direction. CEO Eric DeMarco highlighted this achievement as a testament to employee dedication and customer trust, while emphasizing the company's commitment to delivering affordable, high-performance defense systems.

Positive

• Upgrade to S&P MidCap 400 Index from SmallCap 600, indicating significant company growth
• Enhanced market visibility and potential for increased institutional investment
• Demonstrates strong financial performance and market capitalization growth

Negative

• None.

Insights

Financial Index Analyst

Kratos' promotion to S&P MidCap 400 will drive increased institutional investment, likely boosting share price and trading volumes.

Kratos Defense's addition to the S&P MidCap 400 Index represents a significant milestone with tangible financial implications. This transition from the SmallCap 600 reflects the company's evolution beyond small-cap territory and places it among mid-sized companies valued between approximately $2 billion and $10 billion.

The index inclusion creates a forced buying scenario where passive funds tracking the S&P MidCap 400 must purchase KTOS shares, potentially driving share price appreciation in the near term. Simultaneously, SmallCap 600 trackers will need to sell their positions. The net effect typically favors the company as the MidCap 400 has significantly larger assets under management.

Beyond immediate trading dynamics, this elevation enhances Kratos' visibility among institutional investors who often use index membership as an investment screening criterion. The company should experience increased liquidity, tighter bid-ask spreads, and potentially lower capital costs – all beneficial for long-term valuation.

This promotion validates Kratos' continued financial performance and reinforces its growth trajectory in high-priority defense sectors including unmanned systems, hypersonics, and space technologies. The milestone signals to the market that Kratos has successfully executed its strategy of delivering advanced defense technologies through a more commercial, cost-effective approach that resonates with defense procurement priorities.

SAN DIEGO, Sept. 22, 2025 (GLOBE NEWSWIRE) -- Kratos Defense & Security Solutions, Inc. (Nasdaq: KTOS), a Technology Company in the Defense, National Security and Global Markets, announced today that it will be added to the S&P MidCap 400 Index, transitioning from the S&P SmallCap 600 Index.

The move reflects Kratos’ continued growth, performance, and market recognition as the company scales its leadership in unmanned systems, hypersonics, space, propulsion, and other national security solutions. Placement in the MidCap 400 highlights Kratos’ trajectory as it executes on key programs and expands its role within the U.S. defense industrial base.

“We are honored to be recognized through our inclusion in the S&P MidCap 400, a milestone that reflects both our financial growth and the confidence in Kratos’ strategy,” said Eric DeMarco, President and CEO of Kratos. “This achievement underscores the hard work of our employees, the trust of our customers and partners, and the company’s commitment to delivering affordable, high-performance systems that support U.S. and allied national security.”

The S&P MidCap 400 Index measures the performance of mid-sized companies across diverse industries in the United States and is widely regarded as a leading benchmark for institutional and retail investors. Companies in the index are selected for their balance of size, liquidity, and representation of the U.S. mid-cap market, making inclusion an important marker of corporate growth and visibility.

Kratos remains focused on delivering cutting-edge defense technologies at an accelerated pace, leveraging its commercial approach to drive affordability and agility in support of the U.S. Department of Defense and allied partners worldwide. For more information about Kratos and its industry-leading solutions, 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 Cantrell
claire.cantrell@kratosdefense.com

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

FAQ

What does Kratos Defense's inclusion in the S&P MidCap 400 mean for investors?

The inclusion indicates significant company growth and potentially increased visibility to institutional investors, as the S&P MidCap 400 is a leading benchmark for mid-sized U.S. companies.

When will KTOS join the S&P MidCap 400 index?

While the specific effective date wasn't mentioned in the announcement made on September 22, 2025, the company confirmed it will be transitioning from the S&P SmallCap 600 to the MidCap 400 index.

What are Kratos Defense's main business areas?

Kratos specializes in unmanned systems, hypersonics, space, propulsion, and national security solutions, focusing on delivering affordable, high-performance systems for the U.S. Department of Defense and allied partners.

Who is the CEO of Kratos Defense (KTOS)?

Eric DeMarco serves as the President and CEO of Kratos Defense & Security Solutions.

What are the requirements for a company to join the S&P MidCap 400?

Companies must meet criteria including appropriate market capitalization size, liquidity, and representation of the U.S. mid-cap market. The index is widely used as a benchmark for institutional and retail investors.