Kratos Defense & Security Solutions Says 2027 Forecast Assumes That We Will Sell To Customers About 1,500 Turbo Jet Engines In 2027, With Significant Majority Of These Deliveries Occurring In H2 2027

Kratos’ revised 2026 guidance and our 2027 forecast also assumes certain investments in our Hypersonic, Rocket System, Turbine Technology and Unmanned Systems businesses, including as related to the procurement of rocket motors, jet engines, UAVs and related systems, all of which are expected to continue to impact our operating and free cash flow as we invest in the business. Our fiscal 2026 and fiscal 2027 cash flow estimates also include current expected working capital requirements as related to the procurement of the materials, components and equipment to increase production of turbo jet engines up to 3,000 engines produced in 2027 and potentially up to 5,000 additional engines produced in 2028, to address expected customer demand for jet engines for small cruise missiles and drones. Our 2027 Forecast assumes that we will sell to customers approximately 1,500 turbo jet engines in 2027, with the significant majority of these deliveries occurring in the second half of 2027. Our 2027 Forecast also includes our assumptions to begin to procure the inventory, materials and components required to produce turbofan jet engines for missiles and drones, which we also currently expect future customer contractual demand for. We expect to continue ordering inventory, components and materials required to increase the production of Kratos Valkyries and other jet drone systems throughout 2027, with the mix of expected customer drone orders potentially changing from our current expectations, and potentially impacting the mix and numbers of drones we produce, including Valkyrie. We also expect to continue to produce certain Kratos-owned capital drone systems and related derivatives and vehicles. Kratos’ Space and Satellite business currently has a significant new opportunity pipeline that we are pursuing, including a substantial number of large opportunities wherein Kratos, if successful, will be the prime program system integrator. If successful, on certain of these large new opportunities, Kratos could see increased organic revenue growth, albeit at a somewhat reduced Adjusted EBITDA profit margin rate, including as a result of the potential mix of Kratos, subcontractor, supplier, and material required effort or content to satisfy related contractual program requirements.