Kratos Defense (KTOS) – Time to Run the Gauntlet
In case you missed it, this past Tuesday, the Department of War announced the 25 vendors invited to compete in “Gauntlet I” of the Drone Dominance Program (DDP), a program designed to “rapidly field domestically manufactured low-cost, one way attack drones.”
According to a report (See HERE), the first gauntlet begins on February 18th when program participants will bring unmanned aircraft system prototypes to Fort Benning, Georgia. There, participants will teach military personnel how to use those prototypes, and then military operators will use them to complete various mission scenarios, including an evaluation on their ability to find, lock on and destroy a target. As part of the first phase, 12 vendors will be selected to produce a total of 30,000 units, at an average price of $5,000 for each, and deliver by July. Secretary of War Pete Hegseth would say in a recent social media video: “We will deliver tens of thousands of small drones to our force in 2026, and hundreds of thousands of them by 2027.”
The invited vendors range from established low-cost FPV businesses to engineering services firms vying to elevate their component expertise into consolidated systems. Of the 25 vendors selected, a division of Kratos Defense (KTOS): Kratos SRE inc. was selected.
Stifel analyst Jonathan Siegmann would write, “We were initially surprised to see KTOS on the list given their traditional focus on larger UAS such as the Valkyrie. After followup with management, we confirmed KTOS was actually selected for one of their seldom mentioned group 1-2 “Wolf Pack” drones. We see this as an opportunity for KTOS to display their capabilities in the sUAS space that often gets overlooked given their role in multiple CCA programs. We will continue to monitor the event to see how KTOS’s sUAS systems stack up against the competition.”
Separately, Piper Sandler analyst Clarke Jefferies would write, “With a ramp in volume to >200,000 drones per year by 2027, this should represent a $1B+ opportunity for the selected vendor(s). We will continue to monitor this program for further developments, including KTOS implications.”
