Kratos Defense & Security Solutions

Kratos Government Solutions: Birmingham and Huntsville, AL; Placerville, San Diego, and San Jose, CA; Colorado Springs and Englewood, CO; Jupiter and Orlando, FL; Crane, IN, Baltimore, Princess Anne, and Lanham, MD; Reno, NV, Bristow, OK; Dallastown and York, PA; Plano, TX; and Alexandria, Herndon and Chantilly, VA. Locations outside the U.S. include Australia, Canada, France, Germany, Israel, Norway, and the United Kingdom.

Unmanned Systems: Huntsville, AL; McClellan, Roseville, Sacramento, and Tehachapi, CA; Fort Walton Beach, FL; Oxford, MI; Oklahoma City, OK; and Arlington and Round Rock, TX.

Corporate and other locations: San Diego, CA and Round Rock, TX.

The following is a summary of our floor space at December 28, 2025:

Square feet (in thousands) · Owned · Leased · Total

Kratos Government Solutions · 619 · 1,136 · 1,755

Unmanned Systems · 35 · 534 · 569

Corporate (includes San Diego, operations of KGS and US segments) · — · 26 · 26

Total · 654 · 1,696 · 2,350

See Note 6 of the Notes to Consolidated Financial Statements contained within this Annual Report for information regarding commitments under leases.

• Kratos Antenna Holdings Division, Inc. Delaware⁷
• Kratos Antenna Solutions Canada Corporation Canada⁷
• Kratos Antenna Solutions Corporation Delaware⁷
• Kratos Antenna Solutions Global Corporation Delaware⁷
• Kratos Antenna Solutions International Corporation Delaware⁷
• Kratos Arabia, Ltd. Saudi Arabia⁷
• Kratos BladeWorks, Inc. Delaware⁷
• Kratos Communications Japan, Inc. Japan⁷
• Kratos Communications Ltd. United Kingdom⁷
• Kratos Communications S.A.S. France⁷
• Kratos Communications Singapore Pte. Ltd. Singapore⁷
• Kratos Communications, Inc. Delaware⁷
• Kratos Defence (Australia) Pty Limited Australia⁷
• Kratos Defense & Rocket Support Services, Inc. Delaware⁷
• Kratos GMI Eyal Ltd. Israel⁷
• Kratos Holdings U K Limited United Kingdom⁷
• Kratos Integral Holdings, LLC Maryland⁷
• Kratos Integral Systems International, Inc. California⁷
• Kratos Microwave Holding, LLC Delaware⁷
• Kratos Microwave, Inc. California⁷
• Kratos Norway AS Norway⁷
• Kratos S1, Inc. Colorado⁷
• Kratos S2, Inc. Colorado⁷
• Kratos SRE, Inc. Delaware⁷
• Kratos Space & Missile Defense Systems, Inc. Delaware⁷
• Kratos Systems and Solutions, Inc. Virginia⁷
• Kratos Technology & Training Solutions, Inc. California⁷
• Kratos Unmanned Aerial Systems, Inc. California⁷
• Kratos Unmanned Systems Solutions, Inc. Delaware⁷
• MSI Acquisition Corp. Delaware⁷
• Micro Systems, Inc. Florida⁷
• Nomad Global Communications, Incorporated Montana⁷
• SAT Corporation California⁷
• Shadow I, Inc. California⁷
• Shadow II, Inc. California⁷
• Sierra Technical Services, Inc. California⁷
• Summit Research Corporation Alabama⁷
• Technical Directions, Inc. Michigan⁷

• The loss or delay of one or more of our largest customers, programs, or applications could adversely affect our results of operations.
• Many of our contracts contain performance obligations that require innovative design capabilities, are technologically complex, require state-of-the-art manufacturing expertise, or are dependent upon factors not wholly within our control. Failure to meet these obligations could adversely affect our profitability and future prospects. Early termination of client contracts, pauses or stop work orders by our customers, or contract penalties could adversely affect our results of operations.
• If our subcontractors or suppliers fail to perform their contractual obligations, our performance and reputation as a contractor and our ability to obtain future business could suffer.
• Our earnings and profitability depend, in part, on subcontractor and supplier performance and product availability.
• We face intense competition from many competitors that have greater resources than we do, which could result in price reductions, reduced profitability or loss of market share.
• Our business is dependent upon our ability to keep pace with the latest technological changes.
• If the UAS and UGS markets do not experience significant growth, if we cannot expand our customer base or if our products do not achieve broad acceptance, or if the products we have developed or will develop do not become programs of record, then we may not be able to achieve our anticipated level of growth.
• Loss of our GSA contracts or GWACs could impair our ability to attract new business.
• Government contracts differ materially from standard commercial contracts, involve competitive bidding and may be subject to cancellation or delay without penalty.
• We may not receive the full amounts estimated under the contracts in our backlog, which could reduce our revenue in future periods below the levels anticipated. This makes backlog an uncertain indicator of future operating results.
• A preference for minority-owned, small and small disadvantaged businesses could impact our ability to be a prime contractor and limit our opportunity to work as a subcontractor on certain governmental procurements.
• U.S. Government in-sourcing could result in loss of business opportunities and personnel.
• Our business could be negatively impacted by cyber and other security threats or disruptions.
• If we experience systems or service failure, our reputation could be harmed and our customers could assert claims against us for damages or refunds.
• Our products are complex and could have unknown defects or errors, which may increase our costs, harm our reputation with customers, give rise to costly litigation, or divert our resources from other purposes.
• Due to the volatile and flammable nature of certain components of our products and equipment, fires or explosions may
• disrupt our business or cause significant injuries, which could adversely affect our financial results.
• Our financial results may vary significantly from quarter to quarter.
• Our margins and operating results may suffer if we experience unfavorable changes in the proportion of cost-plus-fee or fixed‑price contracts in our total contract mix.
• Cost overruns on our contracts could subject us to losses, decrease our operating margins and adversely affect our future business.
• Our cash flow and profitability could be reduced if expenditures are incurred prior to the final receipt of a contract.
• If we fail to respond to commercial industry cycles in terms of our cost structure, manufacturing capacity, and/or personnel needs, our business could be seriously harmed.
• We face significant risks in the management of our inventory, and failure to effectively manage our inventory levels may result in product recalls or supply imbalances that could harm our business.
• We have incurred and may continue to incur goodwill impairment charges in our reporting entities, which could harm our profitability.
• Failure to properly manage projects may result in additional costs or claims.
• We use estimates when accounting for contracts, and any changes in such estimates could have an adverse effect on our profitability and our overall financial performance.
• Our ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited. We may be required to record valuation allowances on our net operating loss carryforwards in future periods which could adversely impact our profitability and financial condition.
• We expect to incur substantial research and development costs and devote significant resources to identifying and developing new products and services, which could significantly reduce our profitability and may never result in revenue to us.
• Risks Related to Our Operations
• Our operations expose us to risks associated with pandemics, epidemics or other public health emergencies.
• We may need additional capital to fund the growth of our business, and financing may not be available on favorable terms or at all.
• Our cash may be subject to a risk of loss and we may be exposed to fluctuations in the market values of our portfolio
• investments and in interest rates.
• Past acquisitions and future acquisitions could prove difficult to integrate, disrupt our business, dilute stockholder value and strain our resources.
• Other strategic transactions, including spin-offs, divestitures, and investments involve significant risks and uncertainties that could adversely affect our business, financial condition, results of operations, cash flows and equity.
• If we are unable to manage our growth, our business and financial results could suffer.
• We may need to invest in new information technology systems and infrastructure to scale our operations.
• The loss of any member of our senior management could impair our relationships with U.S. Government customers and disrupt the management of our business.
• If we fail to attract and retain skilled employees or employees with the necessary National Security clearances, we might not be able to perform under our contracts or win new business.
• We are subject to the requirements of the National Industrial Security Program Operating Manual for our facility security clearance, which is a prerequisite to our ability to perform on classified contracts for the U.S. Government.
• We are subject to the DoW CMMC requirement issued by the Pentagon which may limit our ability to bid and win projects. The cost for the DoW CMMC requirement may be significant.
• Cybersecurity breaches or disruptions of our information technology systems could negatively impact our operations.
• Our operations expose us to the risk of material environmental liabilities.
• Risks Related to Our International Operations
• Revenues derived from our international business could be subject to global economic downturn and hardship.
• Changes in foreign tax laws and regulations could expose us to additional tax liabilities and could adversely affect our financial results.
• Our international business exposes us to additional risks.
• Risks Related to Our Indebtedness
• We and our subsidiaries may incur long-term indebtedness, which may introduce risks associated with our leverage, including our ability to service our indebtedness.
• Changes in our credit metrics or macroeconomic conditions may affect our liquidity, increasing borrowing costs and limiting our financing options.
• A portion of our business is conducted through foreign subsidiaries, and the failure to generate sufficient cash flow from these subsidiaries, or otherwise repatriate or receive cash from these subsidiaries, could result in our inability to repay our indebtedness.
• The agreements governing our debt impose significant operating and financial restrictions on us and our subsidiaries that may prevent us and our subsidiaries from pursuing certain business opportunities and restrict our ability to operate our business.
• Risks Related to Our Intellectual Property
• We may be unable to protect our intellectual property rights.
• Disclosure of trade secrets could cause harm to our business.
• We may be harmed by intellectual property infringement claims.
• Our failure to comply with complex procurement laws and regulations could cause us to lose business and subject us to a variety of penalties.
• Our contracts and administrative processes and systems are subject to audits and cost adjustments by the U.S. Government, which could reduce our revenue, disrupt our business or otherwise adversely affect our results of operations.
• Our employees or others acting on our behalf may engage in misconduct or other improper activities, which could cause us to lose contracts or cause us to incur costs.
• We are subject to environmental laws and potential exposure to environmental liabilities. This may affect our ability to develop, sell or rent our property or to borrow money where such property is required to be used as collateral.
• The increasing focus on environmental sustainability and social initiatives could increase our costs, harm our reputation and adversely impact our financial results.
• Regulations related to “conflict minerals” may cause us to incur additional expenses and could limit the supply and increase the cost of certain metals used in manufacturing our products.
• Natural disasters or severe weather conditions could disrupt our business and result in loss of revenue or higher expenses.
• Some of our contracts with the U.S. Government are classified, which may limit investor insight into portions of our business.
• We do not expect to pay any cash dividends or buyback any Kratos stock for the foreseeable future.
• Certain provisions in our amended and restated certificate of incorporation and third amended and restated bylaws, and of Delaware law, may prevent or delay an acquisition of our Company, which could decrease the trading price of our common stock.
• General Risk Factors
• The market price of our common stock is volatile.