Kratos Defense & Security Solutions Inc (KTOS) Q1 2025 Earnings Call Highlights: Strong ...

GuruFocus News

Thu, May 8, 2025, 1:34 AM 4 min read

Release Date: May 07, 2025

For the implicit transcript of the net call, delight notation to the full net telephone transcript.

• Kratos Defense & Security Solutions Inc (NASDAQ:KTOS) reported a beardown Q1 book-to-bill ratio of 1.2 to 1, indicating robust request and aboriginal gross potential.

• The company's accidental pipeline stands astatine an all-time precocious of astir $12.6 billion, showcasing important maturation prospects.

• Kratos is seeing accrued opportunities successful integrated aerial and rocket defence and antagonistic UAS, areas wherever it is an acknowledged manufacture leader.

• The hypersonic franchise is expected to beryllium a large maturation driver, with operational and in-production systems similar Zeus hypersonic rocket motors and Dark Fury hypersonic flyers.

• Kratos' nationalist security-focused abstraction and outer concern continues to person further backing and declaration awards, contributing to expected accrued EBITA margins successful 2026.

• The institution is facing accrued subcontractor and worldly costs connected definite multi-year fixed terms contracts, impacting margins.

• Free currency travel utilized successful operations for Q1 was $51.8 million, reflecting important superior expenditures and moving superior requirements.

• Consolidated DSOs accrued from 104 days to 109 days, indicating slower collections and imaginable currency travel challenges.

• The commercialized outer concern continues to beryllium adversely impacted by macro-level manufacture issues, affecting wide margins.

• Kratos is experiencing outgo pressures from sole-source suppliers for people drones, starring to accrued expenses that cannot beryllium recovered until aboriginal declaration renewals.

• Warning! GuruFocus has detected 9 Warning Signs with KTOS.

Q: How does Kratos acceptable into the Golden Dome inaugural and what are the expected benefits arsenic the programme progresses? A: Eric DeMarco, President and CEO, explained that Kratos is progressive successful the crushed conception of the program, specifically successful bid and control, telemetry tracking, and control. As much assets are deployed successful space, the request for crushed instrumentality and bundle increases, benefiting Kratos. The institution is well-positioned owed to its capabilities successful abstraction domain consciousness and the expanding backing successful this area.

Q: When tin we expect trial flights for the Valkyrie with the caller landing gear? A: Eric DeMarco stated that the Valkyrie with landing cogwheel is expected to alert this year. The improvement is successful conjunction with respective customers, but circumstantial details cannot beryllium disclosed owed to information reasons.

Q: What rocket programs enactment the accumulation of respective 100 turbojet engines this year? A: Eric DeMarco mentioned that Kratos' engines could beryllium progressive with programs similar JDAM and Mace Franklin, on with a mates of classified ones.