Eric Demarco on defense budget
From $KTOS Kratos Defense & Security Q4 2025 Earnings Conference Call · · EARNMOAR
“Crisply stated, we now have a $1 trillion annual defense spend that is expected to increase for the foreseeable future. And as a result of the defense industry consolidation, which began with the infamous DoD Last Supper in 1993, there are few qualified companies with proven capabilities to address the required militarygrade hardware, software, and weapon systems demand. Kratos is one of the few non-large traditional prime contractors, which in my opinion is qualified to adequately address this demand.”
On , Eric Demarco, Chief Executive Officer, President & Director at KRATOS DEFENSE & SECURITY, spoke about defense budget during $KTOS Kratos Defense & Security Q4 2025 Earnings Conference Call on EARNMOAR.
About Eric Demarco
Eric DeMarco, CEO of Kratos Defense & Security Solutions, stated during the company's Q4 2025 earnings call that Kratos expects to approximately double its hypersonic franchise revenues in 2026 over 2025 to around $400 million, with a potential further increase of over 75% in 2027 to approximately $700 million. He described the current period as a "generational recapitalization of strategic weapon systems" driven by geopolitical threats, and noted that Kratos is one of the few non-traditional prime contractors qualified to address the resulting demand for military-grade hardware. DeMarco also emphasized the company's focus on low-cost, high-volume production of jet drones, hypersonic systems, and small jet engines, citing the principle that "quantity has a quality all of its own." In interviews and public appearances, DeMarco has discussed Kratos's vertical integration strategy for mission-critical parts and its use of non-traditional manufacturers, such as automotive industry suppliers, to manage costs. He has expressed concern about low-cost, fiber-optic tethered drones used by adversaries, describing them as difficult to counter. DeMarco has also argued that the U.S. defense industry needs to prioritize fielding systems at 90% capability rather than pursuing perfection, stating that "better is the enemy of good enough." He characterized his role at Kratos as a "passion" and a "mission," citing "God, family, country" as his guiding principles)Skip