Kraken Robotics Reports Revenue Jump

Kraken Robotics Inc. has reported a 67% increase in consolidated revenue for Q2 2024, $22.8 million compared to $13.7 million for the quarter ending June 30, 2023.  

Year-to-date it increased 105% to $43.6 million, compared to $21.2 million in the comparable 6-month period ending June 30, 2023.  

Product revenue in the quarter increased 83% to $19.2 million arising from continued sales across key products including subsea batteries, synthetic aperture sonar (SAS) systems, remote mine hunting and disposal systems and KATFISH™.  

During the quarter Kraken Robotics announced several new orders, including over $8 million in subsea battery orders, an $8 million acoustic corer project, and a KATFISH related order of $3.7 million.

Services revenue in the quarter increased 11% to $3.5 million compared to $3.2 million in the prior year with projects using Sub-Bottom Imager™, Acoustic Corer™ and KATFISH.  

Gross profit in Q2 2024 increased 50% to $11.6 million implying a 51.0% gross margin percentage compared to 56.7% in Q2 2023.

Total assets were $96.1 million on June 30, 2024, compared to $70.5 million on June 30, 2023. Cash at the end of the quarter totaled $20.4 million.

“We are pleased to report another strong growth quarter with adjusted EBITDA margins of 24% versus 22% in the year-ago quarter. During the quarter, we strengthened our balance sheet with a $20 million equity financing and $45 million of new committed credit facilities. The demand environment for our technology solutions has never been better and the opportunities we are seeing in both our defense and offshore energy markets continues to grow,” said Kraken President and CEO Greg Reid.

Kraken says that industry demand signals are solid with an increasing focus on the surveillance and security of critical underwater infrastructure and subsea warfare driven by increased geopolitical tensions. Against this backdrop, the growth of unmanned systems in the subsea domain is accelerating, as subsea drones are seen as a complement to very expensive, exquisite surface warfare assets and submarines.

In the mine warfare arena, navies around the world are in various stages of planning and executing upgrades with multiple large tenders in the market or coming to market in the next one to four years. In some countries, the program sizes being discussed are much larger than industry had been initially expecting.

Several of Kraken’s UUV customers have publicly announced facility upgrades or plans for expansion (Anduril, HII, Teledyne Gavia) highlighting the strong demand they are seeing in the market. These are positive indications for Kraken’s markets, as it is a component and subsystem supplier into these companies (sonar and batteries).

Kraken is planning for additional capacity for subsea batteries, as its current customers are seeing strong growth. In addition, it is having engineering and business development discussions with a variety of other companies working subsea. These discussions pertain to both existing and next generation designs.

The services business, focused on commercial offshore wind and oil and gas, expects a record year, driven by growth in the offshore energy market and requirements for seabed and sub-seabed intelligence during the development, construction and operations/maintenance part of the subsea asset lifecycle.

Kraken’s annual financial guidance remains unchanged. It expects revenue between $90.0 million to $100.0 million and Adjusted EBITDA in the $18.0 million to $24.0 million range. Capital and intangible asset expenditures in 2024 are expected to range from $6.0 million to $7.0 million.