Kratos Awarded $61.1 Million Navy Contract Modification for Full-Rate Production of 70 BQM-177A Subsonic Aerial Targets and Equipment
Kratos (NASDAQ: KTOS) received a $61,068,139 modification to a firm-fixed-price Navy contract for full-rate production Lot Seven of 70 BQM-177A subsonic aerial targets, plus 70 RATO kits and technical data.
Rhea-AI Summary
Kratos (NASDAQ: KTOS) received a $61,068,139 modification to a firm-fixed-price Navy contract for full-rate production Lot Seven of 70 BQM-177A subsonic aerial targets, plus 70 RATO kits and technical data. Total contract value at maximum quantity is $238,798,157. Work is expected to complete in August 2028, with ~50% of work in Sacramento, CA. Kratos said it is investing in capital production improvements to boost capacity or efficiency.
Positive
- $61,068,139 contract modification for 70 BQM-177A units
- Maximum $238,798,157 total contract value at 70 aircraft
- Contract work completion expected by August 2028
- Company is investing in capital production improvements to improve capacity or efficiency
Negative
- Final option exercised at maximum negotiated quantity—limits near-term incremental upside under this contract
- Workload concentrated with 50% of work in Sacramento, California
Details
News Market Reaction – KTOS
On Feb 25, the day this news came out, KTOS closed 2.70% below the previous close.
Data tracked by StockTitan Argus for the Feb 25 session.
Key Figures
- Navy contract modification
- $61,068,139
- Modification to previously awarded firm-fixed-price contract N0001923C0021
- BQM-177A targets
- 70 units
- Full-rate production Lot Seven BQM-177A subsonic aerial targets
- RATO attachment kits
- 70 kits
- Rocket-Assisted Takeoff attachment kits procured with the targets
- Total contract value
- $238,798,157
- Total value after exercise of final option at max 70-aircraft quantity
- Sacramento work share
- 50%
- Portion of contract work expected in Sacramento, California
- Dallas work share
- 20%
- Portion of contract work expected in Dallas, Texas
- Other locations work share
- 11%
- Work at various other U.S. locations
- Contract completion
- August 2028
- Expected completion date for the Navy contract
Historical Context
-
Q4 and full-year 2025 results with higher 2026 guidance and backlog.
-
USAF award for GEK1500 engine preliminary design for CCAs and UAS.
-
Groundbreaking of 600-acre SRM campus with up to $175M capital.
-
Contract to support hypersonic thermal protection system test and evaluation.
-
Multi-million dollar ground system contract for OmanSat-1 with Airbus.
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Key Terms
firm-fixed-price contract financial
rocket-assisted takeoff (RATO) technical
subsonic technical
AI-generated analysis. How Rhea-AI works. Not financial advice.
SAN DIEGO, Feb. 25, 2026 (GLOBE NEWSWIRE) -- Kratos Defense & Security Solutions, Inc. (NASDAQ: KTOS), a leader in defense, national security and global markets, announced today that it has been awarded a
“Achieving full-rate production of the BQM-177A reflects the Navy’s continued confidence in Kratos’ ability to deliver reliable, high-performance aerial target systems at scale,” said Steve Fendley, President of Kratos Unmanned Systems Division. “This award underscores our commitment to providing affordable, mission-relevant unmanned systems that directly support Navy training, test, and evaluation requirements while maintaining production readiness for future demand. As with all previous awards or modifications, the exercise of this final option is at the maximum negotiated production quantity of seventy aircraft resulting in a total contract value of
The BQM-177A is a subsonic, surface-launched aerial target designed to support realistic threat representation for advanced weapons testing and fleet training operations.
Work under the contract is expected to be performed in the following locations (with the expected share of the work): Sacramento, California (
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 28, 2025, 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
AI-generated questions and answers. How Rhea-AI works. Not financial advice.