Kratos Allocates Spartan J85 Engine Production to Boeing JDAM LR Program

Kratos Defense & Security Solutions (KTOS ) said on August 24, 2026 that it is allocating expanded production capacity for its Spartan J85 turbojet engines to support Boeing‘s Joint Direct Attack Munition Long Range production program, weeks after the U.S. Air Force awarded Boeing a $75 million Undefinitized Contract Action to begin buying the weapon. Kratos is the sole disclosed engine source for the munition, and it has already begun ordering long-lead components for a large Spartan production run in 2027 — ahead of any definitized contract value for its own portion of the work.

The August 5, 2026 Air Force award covers the BSU-111/B Payload Delivery Unit, the wing-and-engine kit that converts a 500-pound class bomb into the GBU-75 JDAM LR, a precision-guided munition Boeing says can travel more than 300 nautical miles. The UCA structure means Boeing can begin work before the two sides negotiate final terms; Boeing described it as clearing initial production of PDUs for the U.S. Navy, following nearly $100 million of its own internal investment in the program.

Kratos did not disclose a value, quantity, or delivery schedule for its engine allocation, and the announcement does not state whether Kratos holds a separate funded order from Boeing or is positioning supply chain inventory ahead of one. What the release does state: the J85 has been selected as the engine source for the munition, and Kratos has initiated procurement of long-lead components for Spartan engines to support a large 2027 production run across multiple customers and applications, with Boeing JDAM LR identified as the key program because the engine was originally designed for it.

A Subcontractor Position on a New Munition Program

The J85 is the largest of four engines in Kratos’ Spartan line, producing up to 200 pounds of thrust with an integral generator delivering up to 1.5 kilowatts of continuous power, per the company’s product specifications. The engines are built at a 22,500-square-foot Propulsion Manufacturing Facility in Auburn Hills, Michigan, which Kratos says is fully operational and optimized for full-rate production.

That facility is the physical anchor of Kratos’ pitch to the Pentagon’s affordable-mass buying push. When Kratos opened Auburn Hills in November 2025, it said the plant could sustain concurrent production of all four Spartan variants at quantities of 50,000 or more engines per year. The company is also executing what it describes as a three-phase manufacturing infrastructure plan to expand capacity further.

The Boeing relationship predates the production contract by nearly three years. In October 2023, Boeing and Kratos’ Technical Directions Inc. unit signed a memorandum of understanding for the TDI-J85 to power what was then called the Powered JDAM — a teaming arrangement, not a funded order. Boeing says the system recently completed its first flight test off the coast of California, sustaining powered flight on a predefined profile using military-code GPS navigation through to its target. The August UCA converts that development track into a production program, and Monday’s release is Kratos confirming its seat on it.

Where the Engine Work Sits in Kratos’ Financials

Kratos reported its second quarter 2026 results on August 4, 2026: revenue of $458.8 million, up 30.5% from $351.5 million a year earlier, with consolidated backlog of $2.084 billion as of June 28, 2026. Within that, the Turbine Technologies business that builds the Spartan line grew organically 43.3% year over year — the second-fastest growth rate in the Kratos Government Solutions segment. The company raised full-year 2026 revenue guidance to a range of $1.750 billion to $1.810 billion.

The earnings release also priced the engine ramp directly. Kratos disclosed $19 million to $21 million of planned 2026 working-capital spending on inventory purchases for small jet engine production, earmarked “to enable production of 3,000 Jet Engines in 2027” to address demand from small cruise missile programs. Kratos has not said whether Monday’s long-lead component procurement for the 2027 Spartan run falls inside that disclosed build, which the earnings release earmarked for small cruise missile engine demand. The spending carries a cost: Kratos forecasts free cash flow use of $85 million to $105 million for 2026, driven in part by exactly these production-ramp investments, and it expects capital expenditure of $125 million to $135 million for the year.

The procurement mechanics matter for how quickly any of this becomes revenue. The Air Force’s $75 million award to Boeing is undefinitized (the ceiling, scope, and price are not yet final), and Kratos’ allocation is a supplier commitment one tier below it, with no disclosed funded value. Kratos is spending its own cash on long-lead parts now, on the stated expectation that a multi-customer production run in 2027 will absorb the output at scale. If JDAM LR quantities grow through follow-on Navy orders or exports to the JDAM partner nations Boeing has said the weapon is designed to reach, the engine content flows to Auburn Hills; if definitization shrinks the buy, Kratos holds the inventory.