Anduril isn’t Palantir, exactly. But there are similarities.
Anduril Industries co-founder Palmer Luckey told Bloomberg last month that his company is “on a path to being a publicly traded company.” Luckey thinks it’s “important” that Anduril IPO soon — although he hasn’t said exactly when that might happen.
Just the prospect of an Anduril IPO, however, was enough to start me digging into the company. In a column earlier this month, I introduced investors to this cutting-edge defense stock, briefly described the business, and made a few back-of-the-napkin estimates for what the valuation might look like, if Anduril eventually IPOs.
Today, let’s dig even deeper into Anduril’s business, as we try to figure out whether this military AI stock, formed by veterans of Palantir, might itself turn out to be the next Palantir.
Anduril’s latest contract win
Why the sudden interest? Obviously, the founder’s expressed intent to IPO is part of it. But Anduril’s ability to win government contracts, which increases the likelihood that the IPO will be successful, also has my interest piqued. In fact, just the other day Anduril announced the winning of a new $99 million contract with the Department of Defense.
As described on the DoD contracts website, the new award will run through February 2030 and concerns work for what’s called “Thunderdome Small Business Innovation Phase III.” Now, the name’s a bit ambiguous, but as near as I can discover, this is a cybersecurity contract. That makes sense. Anduril’s focus, after all, is on artificial intelligence-powered drone technology. And the last thing you want is for your drone to get hacked, making cybersecurity a key function of the technology.
Still, I wondered what else Anduril has been up to lately. And as it turned out, I found the answer in a series of seven big contract wins awarded to Anduril over the past year, each described on the Pentagon’s same contracts website. Here they are, in reverse chronological order:
Dec. 3: Anduril wins a $100 million contract from the Pentagon’s Chief Digital and Artificial Intelligence Office to “scale its edge data integration services capabilities.” This basically means integrating data from multiple sensors and sources locally, rather than sending it back to a central HQ for integration.
Nov. 15: The Air Force awards Anduril $23 million “for fielding of latticed mesh network to additional space surveillance setwork sites.” The other side of the edge network, this involves the distribution of data across domains and platforms.
Oct. 16: Anduril splits a $400 million Navy contract “for the integration and delivery of a Counter-Unmanned Aircraft System Engagement System.” Recall that Anduril builds drones, but also counter-unmanned aerial system, or C-UAS, weapons to defeat hostile drones.
Sept. 27: The Air Force awards Anduril $25.4 million for “latticed mesh network and integration to additional space surveillance network sites.” Sound familiar?
Sept. 17: The Army awards Anduril $9 million “to develop and demonstrate … the Agile-Launched, Tactically Integrated Unmanned System.” Also known as ALTIUS, this is a family of tube-launched kamikaze drones, similar to AeroVironment‘s Switchblade drones, built by Anduril.
June 14: Anduril is named one of 49 “industry partners” allowed to compete for funds under a $982.1 million umbrella contract, to work on various drone technologies — payloads, sensors, drone control systems, and so on — for the U.S. Army. Other winners include corporate giants such as AT&T, Honeywell, Microsoft, Teledyne, and General Atomics, which tells you who the military considers Anduril’s peers are. It may not be a public company yet, but Anduril’s playing in the Big Leagues already.
April 15: Alongside fellow awardees AeroVironment and Honeywell (remember them?), the Navy taps Anduril to help produce, test, and maintain its Organic Precision Fires Light system, a tube-launched kamikaze drone designed for the U.S. Marine Corps. Anduril in particular is awarded $6.5 million.
Image source: Getty Images.
What we know about Anduril now
Assuming each of those contracts is funded in full, and that multiple-awardee contracts are split roughly equally, the seven contracts in total promise about $400 million in new revenue for Anduril. Coincidentally, that’s roughly equal to the $457 million in total revenue the company booked from all sources in 2023, according to data from S&P Global Market Intelligence.
And this is not counting contracts Anduril has with other national defense agencies. (Anduril counts the UK Ministry of Defence and the Australian Defence Force among its customers, for example). It doesn’t account for sales to other U.S. and other state government agencies — the U.S. Department of Homeland Security, for example.
In short, while we know Anduril has won these particular contracts, there’s a lot more money Anduril’s making that we don’t know about, and that we probably won’t know about until the company files for its IPO.
Still, just from what’s reflected here, we can confirm that Anduril is already playing a very big role in the U.S. military, in military drones in particular, and in kamikaze drones — or, as the Pentagon prefers, “loitering munitions” — in particular. In addition to intelligence gathering, processing, and distribution, this appears to be the company’s primary focus.
What else can we learn about Anduril in the lead-up to its IPO? As soon as I dig it up, you’ll be the first to know.
