Rocket Lab (RKLB) Stock Jumps as Company Lands Role in Kratos' (KTOS) $1.45B MACH-TB 2.0 Contract

Rocket Lab USA, Inc. RKLB shares are trading higher Monday following the announcement that the company will play a key role in Kratos Defense & Security Solutions KTOS

Defense technology company Kratos Defense & Security Solutions (NASDAQ:KTOS) has secured a $1.45 billion contract for Multi-Service Advanced Capability Hypersonic Test Bed (MACH-TB) 2.0 from the U.S. Department of Defense. This initiative will enhance the nation's hypersonic flight testing infrastructure.

The MACH-TB 2.0 program, part of the National Hypersonic Initiative 2.0, is designed to close the gap between ground testing and full-scale hypersonic system testing. By doing so, it aims to reduce risks and accelerate the development of hypersonic technologies, which are crucial for national security.

Kratos will lead Task Area 1 of the project, which includes systems engineering, integration, and testing. Meanwhile, Rocket Lab (NASDAQ:RKLB) will provide air launch services as part of a larger team. This team includes Leidos (NYSE:LDOS), Stratolaunch, and other subcontractors, working together to support the increased frequency of hypersonic flight tests.

Kratos' leadership highlighted the significance of the program in advancing affordable hypersonic technologies and noted that this contract is the largest in the company's history. The MACH-TB 2.0 contract is expected to be a major growth driver for Kratos, which also emphasized its existing hypersonic capabilities as a key factor in securing this contract.

“With the recent successes of our low-cost Erinyes Hypersonic Flyer and Zeus Solid Rocket Motors, Kratos is a leader in the testing and fielding of hypersonic systems. We are very excited to bring this unmatched expertise to the MACH-TB 2.0 program,” said Dave Carter, President of Kratos Defense and Rocket Support Services Division.