Kratos Defense Security (NASDAQ: KTOS) beat expectations in the quarter, predicted stronger-than-expected top-line growth for 2024, and announced a significant new government contract. Investors are soaking in the good news, sending Kratos shares up 17% at the open on Wednesday.

Kratos is a second-tier defense contractor with a significant presence in unmanned aerial vehicles (UAVs) and space systems. The stock has tended to be more volatile than the defense primes, with a lot of potential but far fewer major contracts to provide reliable revenue growth.

The company's fourth quarter came in hot. Kratos earned $0.12 per share on revenue of $273.8 million, surpassing the consensus estimate of $0.09 per share on $254 million. The company generated $330 million in the quarter, ending the period with a consolidated book-to-bill ratio -- a measure of future business compared to business done in the current quarter -- of 1.2.

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Source Fool.com