Core Viewpoint - Kraken Robotics Inc. reported a 16% increase in consolidated revenue for Q2 2025, driven by growth in subsea battery and service businesses, despite a decline in sonar revenue [4][3]. Financial Performance - Consolidated revenue for Q2 2025 was $26.4 million, up from $22.8 million in the prior year [4]. - Product revenue decreased by 14% to $16.5 million, while service revenue surged by 180% to $9.8 million [4]. - Gross profit increased by 27% to $14.8 million, resulting in a gross profit margin of 56%, up from 51% in the prior year [4][11]. - Adjusted EBITDA for the quarter was $4.7 million, with an adjusted EBITDA margin of 18%, down from 24% in the comparable quarter [4][8]. Assets and Financing - Total assets reached $184.3 million as of June 30, 2025, compared to $98.5 million a year earlier [4]. - Cash at the end of the quarter was $32.9 million, an increase from $20.4 million in the prior year [4]. - The company completed a bought deal equity financing for gross proceeds of $115 million after the quarter ended [4][9]. Market and Growth Prospects - The naval defense and maritime security sectors are key growth drivers, with increasing adoption of uncrewed platforms [3]. - The company anticipates strong defense Request for Proposal (RFP) activity from 2025 to 2027, enhancing its market prospects [5]. - The acquisition of 3D at Depth Inc. is expected to bolster the company's high-margin services business, particularly in the offshore energy market [9]. Financial Guidance - The company maintains its 2025 financial guidance, expecting revenue between $120 million and $135 million and Adjusted EBITDA between $26 million and $34 million, representing 40% revenue growth and 45% Adjusted EBITDA growth [4].

Financial Performance - Consolidated revenue in Q1 2025 decreased 23% to $16.1 million compared to $20.9 million in the prior year, driven by a 42% decline in product revenue to $9.2 million [6] - Service revenue increased 38% to $7.0 million due to demand for Sub-Bottom Imager™ and Acoustic Corer™ services [6] - Gross profit increased 8% to $10.1 million, resulting in a gross margin of 62.7% compared to 44.8% in the prior year [6][15] - Adjusted EBITDA decreased 32% to $2.8 million, with an adjusted EBITDA margin of 17.3% compared to 19.6% in the prior year [6][12] Market Outlook - The company expects strong top and bottom-line growth in 2025, supported by robust macro fundamentals in the naval defense market as navies modernize and adopt uncrewed platforms [3] - Anticipated defense RFP activity from 2025 to 2027 is at unprecedented levels, contributing to optimism in the naval defense segment [3] Recent Developments - The company secured nearly $45 million in subsea battery orders and $3 million in orders for Kraken SAS since the end of Q4 [5] - A new manufacturing capacity in Canada is expected to come online by the end of 2025, enhancing the company's ability to meet customer needs in offshore energy and naval defense markets [4] Financial Guidance - The company maintains its 2025 revenue guidance of $120 million to $135 million, representing a 40% growth, and an adjusted EBITDA margin of $26 million to $34 million [7] - Capital expenditures for 2025 are projected to range from $13 million to $17 million, with approximately $10 million allocated for a new subsea power manufacturing facility [8]