Hunting remote sea mines helped Kraken Robotics’ revenue swell in Q1

St. John’s-based marine technology company Kraken Robotics saw its revenues climb by 175 percent year-over-year during the first quarter of 2024.

According to Kraken’s financial results, announced May 29, the company’s consolidated revenue for the quarter ended March 31 totalled $20.9 million CAD, compared to $7.6 million in the same period last year. According to Kraken, 76 percent of its revenue was generated from products, while 24 percent came from services.

In February, Kraken’s mine-hunting systems became operational with the Royal Danish Navy.

Founded in 2008, Kraken designs and develops sensors, software, and robotics for the marine industry. Since acquiring PanGeo Subsea in 2021, Kraken also provides subsea “Robotics-as-a-Service” capabilities, which includes geophysical and sonar surveys.

Product revenue for Q1 2024 totalled $15.8 million, a nearly 200 percent increase relative to the first quarter of 2023. Kraken said this growth was driven by the company’s subsea batteries, the production of its Katfish program, a high-speed underwater sonar vehicle designed for detailed seabed mapping and imaging, as well as the firm’s work with the Canadian Navy.

In 2022, Kraken was awarded a multi-million-dollar contract with the federal government to provide remote minehunting and disposal systems to Canada’s Department of National Defense. Under the program, the Canadian Navy is aiming to generate the capability to detect, classify, localize, reacquire, identify, and dispose of sea mines and underwater improvised explosive devices.

In February 2024, Kraken announced that its mine-hunting systems had become operational with the Royal Danish Navy. 

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Kraken’s service revenue for Q1 totalled $5.1 million, a 125 percent increase compared to a year prior. Adjusted earnings before interest, taxes, depreciation, and amortization for Q1 2024 totalled $4.1 million, up from $0.9 million in Q1 2023. The company’s net income for the quarter was $2.2 million, a notable improvement from the net loss of $1.3 million it posted during Q1 2023. Kraken’s total assets were $73.5 million as of March 31, 2024, compared to $65.2 million at the end of Q1 2023.

Following the end of the first quarter, Kraken entered into a credit agreement with the Bank of Nova Scotia. The deal involves a three-year-term facility of up to $35 million, a $10-million line of credit, a $10-million uncommitted letter of credit facility, and an uncommitted accordion facility of up to $30 million.

Last month, Kraken closed a bought deal financing for proceeds of $20.1 million, which consisted of 21 million common shares priced at 95 cents per share. According to Kraken, the proceeds will be used for working capital, as well as to expand its manufacturing capacity and invest in facilities.

“With our recently closed $20-million equity financing and $45 million of new committed credit facilities, our balance sheet has been strengthened as we pursue and execute on multiple sizeable subsea defense and commercial programs,” Kraken president and CEO Greg Reid said in a statement.

Since releasing its Q1 earnings on May 29, shares in Kraken on the TSX Venture Exchange hit a peak of $1.03 CAD, and traded at roughly 98 cents at press time.

Feature image courtesy of Kraken Robotics.