MEMBER NEWS: Kraken Robotics updates 2023 financial guidance and provides strong 2024 outlook

February 16, 2024
MEMBER NEWS: Kraken Robotics updates 2023 financial guidance and provides strong 2024 outlook

Kraken Robotics Inc. is updating financial guidance for the year ended December 31, 2023. While audited results will not be released until mid-April, unaudited preliminary results show that the Company’s strong momentum continued from Q3 2023 into Q4 2023. As a result, Kraken Robotics expects to report fiscal 2023 revenue at approximately the midpoint of our $66.0 million and $72.0 million guidance, representing top line growth of about 68% year over year. The Company also expects Adjusted EBITDA(1) toward the higher end of our $12.0 million to $15.0 million guidance, versus Adjusted EBITDA(1) of $5.3 million for the year ended December 31, 2022. Capital expenditures for 2023 are currently anticipated to be approximately $7.5 million, higher than our $5.0 million to $6.0 million guidance due to additional investments in assets for our engineering, customer success and services groups to drive growth in 2024 and beyond.

“2023 was another strong year for Kraken Robotics, and we anticipate a strong 2024,” said Greg Reid, Kraken President and CEO. “With our contract wins to date and visibility into our sales pipeline, we expect continued strong growth in 2024 and beyond. In the defense market, the macro environment is robust as countries adapt to the new geopolitical norm to monitor and protect critical underwater infrastructure and territories. We are winning new customers and selling more products and services to existing customers. In the commercial market, we expect continued solid growth driven by offering services to companies focused on offshore wind and offshore energy.”

For 2024, we currently expect revenue between $90.0 million to $100.0 million and Adjusted EBITDA(1) in the $18.0 million to $24.0 million range. Capital expenditures in 2024 are expected to range from $6.0 million to $7.0 million. Our 2024 outlook is largely driven by contracts in hand and reflects strength across both our Products and Services groups addressing defense and offshore energy customers.

Going forward, the Company is introducing information on our sales funnel pipeline to help investors better understand the underlying growth trends in our markets served and to show how Kraken’s products and services are performing. We will provide the sales funnel information on an annual basis at the beginning of each year. Ultimately our success will be determined by continuing to convert our sales pipeline to new orders and successfully executing on these projects and programs. Our total sales pipeline is a combination of opportunities across three areas: sonar products and programs, subsea power, and subsea services.

Kraken’s sales funnel pipeline at the end of December 2023 was over $900 million. On major sonar programs, we experience competition from a small number of companies, and Kraken often is included on multiple bid teams as various consortiums bid these navy programs. For subsea batteries, we are often the sole source provider of lithium-ion batteries to our uncrewed underwater vehicle (UUV) customers. In this market, the emergence of a new larger class of UUV, the Extra Large UUV (XLUUV) is driving increased volumes. For subsea services, our solutions are used by naval, offshore wind and offshore oil and gas customers to provide high resolution acoustic imagery of the seabed and sub-seabed, providing actionable intelligence on critical underwater infrastructure and territories.

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