Kratos Defense & Security Solutions, Inc. Announces Completion of Public Offering of $575 Million of Common Stock at $38.50 Per Share

Rhea-AI Summary

Kratos Defense & Security Solutions (NASDAQ: KTOS) has successfully completed a public offering of common stock, raising $575 million in gross proceeds. The offering was priced at $38.50 per share, resulting in the issuance of 14,935,065 shares, including the underwriters' additional share purchase option.

After deducting underwriting discounts, commissions, and related fees, the net proceeds amount to approximately $556 million. The company plans to use these funds to scale operations for National Security programs, finance strategic acquisitions, and for general corporate purposes including debt reduction.

According to CEO Eric DeMarco, the capital raise positions Kratos to capitalize on opportunities in the global recapitalization of advanced strategic weapon systems, with significant new opportunities expected over the next 12 months.

Positive

• Substantial capital raise of $575 million in gross proceeds
• Strong market position in strategic weapon systems recapitalization
• Multiple growth opportunities expected in next 12 months
• Strategic use of proceeds for program execution and acquisitions
• Successful exercise of underwriters' option indicating strong demand

Negative

• Significant shareholder dilution through issuance of 14.9 million new shares
• Approximately $19 million in fees and expenses reducing net proceeds

Insights

Financial Strategist

Kratos' $575M stock offering strengthens its financial position to capitalize on defense sector growth and acquisition opportunities.

Kratos has successfully completed a $575 million public offering at $38.50 per share, issuing approximately 14.9 million shares. After deducting costs, the company has secured net proceeds of roughly $556 million. This significant capital raise represents a strategic financial maneuver designed to position Kratos advantageously in the rapidly evolving defense sector.

The timing of this offering aligns with what the CEO describes as a "generational, global recapitalization of technologically advanced strategic weapon systems" - suggesting Kratos sees substantial growth opportunities on the horizon. The company has outlined three specific uses for these funds: scaling operations for large national security programs (both existing and recently awarded), financing strategic acquisitions, and general corporate purposes including debt reduction.

This capital infusion substantially enhances Kratos' financial flexibility at a critical juncture. The company appears to be preparing for accelerated growth, with management indicating a "significant number of new, substantial opportunities" expected within the next 12 months. By raising capital proactively rather than reactively, Kratos has positioned itself to respond swiftly to emerging opportunities without the constraints of insufficient funding.

The offering also signals confidence from institutional investors in Kratos' growth strategy and market position. Successfully raising over half a billion dollars in equity capital demonstrates strong market appetite for exposure to Kratos' defense technology portfolio during a period of increased global defense spending.

SAN DIEGO, June 30, 2025 (GLOBE NEWSWIRE) -- Kratos Defense & Security Solutions, Inc. (“Kratos”) (NASDAQ: KTOS), a Technology Company in the Defense, National Security and Commercial Markets, today announced that it has completed its previously announced offering of Kratos common stock, raising $575,000,000 in gross proceeds, at a public offering price of $38.50 per share, for a total of 14,935,065 shares of common stock, which includes the exercise of the underwriters option to purchase additional shares. Net proceeds from the offering, after deducting underwriting discounts and commissions and related fees, are approximately $556 million.

Kratos expects to use the net proceeds of the offering to (i) fund investments and capital expenditures to scale and successfully execute on large, mission critical National Security priorities related to existing programs, recent program awards and significant high-probability pipeline opportunities; (ii) to finance important customer and program targeted acquisitions; (iii) and for general corporate purposes, including pay-down of debt and to pay fees and expenses in connection with the offering.

Eric DeMarco, Kratos’ President and CEO, said, “There is a generational, global recapitalization of technologically advanced strategic weapon systems underway, which Kratos is uniquely positioned to successfully execute on. We raised this capital to ensure that Kratos has the capability to move quickly, scale and successfully execute on large mission critical, National Security priorities. We have a significant number of new, substantial opportunities we expect to be successful on over the next 12 months, we expect our opportunity pipeline to continue to grow – and we must be ready.”

The securities described above were offered by Kratos pursuant to an effective registration statement previously filed with the U.S. Securities and Exchange Commission. This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

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.

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. Such statements relate to a variety of matters including, without limitation, Kratos’ expectations regarding the use of the proceeds from the public offering, the pipeline for opportunities, and Kratos’ success with respect to such opportunities, as well as other statements that are not purely statements of historical fact. 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 including, but not limited to: risks and uncertainties related to market conditions as well as general economic factors. 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

How much did Kratos Defense (KTOS) raise in their June 2025 public offering?

Kratos raised $575 million in gross proceeds through a public offering of common stock at $38.50 per share, with net proceeds of approximately $556 million after fees and expenses.

What is the purpose of Kratos Defense's (KTOS) $575M stock offering?

The proceeds will fund investments in National Security programs, finance strategic acquisitions, support general corporate purposes, and reduce debt.

How many new shares did Kratos Defense (KTOS) issue in the June 2025 offering?

Kratos issued 14,935,065 shares of common stock, which includes shares from the exercise of the underwriters' option to purchase additional shares.

What is Kratos Defense's (KTOS) strategic focus according to the 2025 offering announcement?

Kratos is focusing on the global recapitalization of technologically advanced strategic weapon systems, with significant new opportunities expected over the next 12 months.

What was the pricing of Kratos Defense's (KTOS) June 2025 stock offering?

The public offering was priced at $38.50 per share.