Collaborative Arrangement

6 Months Ended

Jun. 29, 2025

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Collaborative Arrangement

Collaborative Arrangement

On June 3, 2025, the Company and GE Aerospace (“GE”) announced a formal teaming agreement to advance the development and production of engines for the next generation of affordable unmanned aerial systems and Collaborative Combat Aircraft-type (CCA-type) aircraft. This teaming agreement supersedes an earlier letter of intent and memorandum of understanding between the Company and GE related to the development, testing and fielding of these engines. Under this arrangement, Kratos and GE share in the risks and rewards of the program through various revenue, cost and profit-sharing payment structures. In accordance with FASB ASC Topic 808, Collaborative Arrangements, (“Topic 808”), the accounting for the arrangement is within the scope of ASC 606 and revenue and costs are recognized as the promised services are provided. Since the signing of the memorandum of understanding between the Company and GE on July 22, 2024, Kratos has recorded revenues of $25.9 million and cost of sales of $25.9 million through June 29, 2025 related to this arrangement. Approximately $3.8 million and $7.3 million of revenues and cost of sales related to this arrangement have been recorded by Kratos for the three and six months ended June 29, 2025, respectively.