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Kraken Forecasts Continued Strong Growth After Record 2022 Financial Results

Kraken Robotics Inc.
Kraken Robotics Inc.

ST. JOHN'S, Newfoundland, May 01, 2023 (GLOBE NEWSWIRE) -- Kraken Robotics Inc. (TSX-V: PNG, OTCQB: KRKNF) ("Kraken" or the "Company"), announced it has filed its financial results for the quarter and year ended December 31, 2022. Additional information concerning the Company, including its consolidated financial statements and related management's discussion and analysis ("MD&A") for the quarter and year ended December 31, 2022, can be found at Unless otherwise stated, all dollar amounts are Canadian dollar denominated.

CEO Comments

"2022 was a strong year for Kraken and we expect it to continue in 2023," said President and CEO Greg Reid. “Revenue growth of 60% and adjusted EBITDA margins of 13% reflect the right technical solutions, strong end markets, and improving execution. Investments we have made are positioning us well. The increasing demand for high resolution subsea data at the lowest possible costs combined with macro trends across our largest markets, defense and offshore energy, is showing up in our pipeline which is broader and deeper than ever before."


Outlook for 2023

For 2023, we expect revenue to be in the $66 - $78 million range and adjusted EBITDA in the $12 - $17 million range. The mid-point of our guidance range ($72 million in revenue and $14.5 million in EBITDA) implies revenue growth of 76% over 2022 and adjusted EBITDA growth of 275%. Capex in 2023 is expected to be $5-$6 million. Our 2023 outlook is largely driven by contracts in hand and reflects strength across both our Products and Services groups addressing defense and offshore energy customers.

2022 Financial Highlights

  • Revenue for the year ended December 31, 2022, was a record $40.9 million compared to $25.6 million in the prior year. The 60% year-over-year growth was driven by the delivery of KATFISH™ mine-hunting systems, AquaPix® synthetic aperture sonar ("SAS"), and SeaPower™ batteries as well as a full year of service revenue from PanGeo Subsea which was acquired in July 2021.

  • Gross margins(1) for 2022 were 42%, compared to 44% in 2021.

  • Adjusted EBITDA(1) for the year was $5.3 million resulting in a 13% Adjusted EBITDA Margin(1), compared to an Adjusted EBITDA(1) of $2.1 million in the prior year and a 8% Adjusted EBITDA Margin(1).

  • Net loss for the year totalled $4.2 million compared to a net loss of $3.5 million in the prior year.

  • Cash balance at year end 2022 was $8.3 million compared to $6.8 million as of December 31, 2021.

  • Total assets were $71.4 million at year end 2022, as compared to $65.6 million as of December 31, 2021, with the increase driven by increased accounts receivable due to the growth in the business.

  • At year-end 2022, Kraken had $14.4 million in previously awarded non-repayable funding to draw upon from government agencies and project partners for research and development, of which cash amounting to $2.2 million has been received for contracts to be completed in 2023.

Q4 2022 Financial Highlights

  • Revenue for Q4 2022 was $8.8 million compared to $15.0 million in the prior year. Q4 2022 products revenue was $5.1 million compared to $12.7 in the prior year with the decline being due to the delivery to the Polish Navy in Q4 2021. Products revenue in the quarter was driven by work with the Royal Danish Navy and multiple deliveries of our AquaPix® SAS and SeaPower™ batteries. Services revenue in the quarter increase 60% to $3.7 million over the prior year and was driven mainly by our utilization of our Sub-Bottom Imager™ technology.

  • Gross margins(1) in Q4 2022 were 50% as compared to 43% in 2021 and increased due to a change in product mix during the quarter to higher margin projects.

  • Adjusted EBITDA(1) for the quarter was $0.9 million, a 11% Adjusted EBITDA Margin(1) compared to an Adjusted EBITDA (1) of $3.5 million and a 23% Adjusted EBITDA Margin(1) in the comparable quarter with the decline driven by the delivery to the Polish Navy in Q4 2021.

  • Net loss in the quarter was $1.3 million, compared to net income of $0.5 million in the prior year.

2022 Operational Highlights

Product Business

  • During 2022, Kraken continued to deliver on its contract to supply mine-hunting sonar equipment to the Royal Danish Navy. At the end of 2022, the acquisition phase of this project was largely delivered with integration and sea acceptance testing to be completed on various components in 2023. The sustainment portion of the contract is expected to begin during the first half of 2023.

  • In September 2022, Kraken announced that it had signed a $9 million follow-on contract to supply mine-hunting systems to a leading NATO Navy, which includes its KATFISH™ towed SAS system, Tentacle® Winch system, autonomous launch and recovery system and topsides. Deliveries will occur in both 2023 and 2024.

  • In November 2022, Kraken signed a research & development contract with a global energy company which will provide $8 million of cash funding to Kraken's Brazilian subsidiary over a 3-year period. Under this project, Kraken will continue development of artificial intelligence and machine learning software, and subsea autonomy solutions to intelligently analyze sensor data and learn how to respond to highly dynamic environments in the offshore oil and gas, wind, hydrographic, science, and defense industries.

  • In November 2022, Kraken received an order for subsea batteries valued at $14 million with deliveries to occur in 2023.

  • Throughout 2022, Kraken received approximately $7 million in orders for its SAS product compared to approximately $3 million in the prior year. Demand for our SAS continues to increase over traditional side scan sonar driven by customer desire for strong intelligence about subsea infrastructure in both shallow and deep-water installations. The modularity and versatility of our SAS is strong, having a track record of successful integration on over 20 different underwater vehicle platforms.

  • In December 2022, Kraken was awarded a prime contract with the Government of Canada to provide Remote Mine-hunting and Disposal Systems for the Department of National Defense. The contract consists of an estimated 24-month acquisition program followed by an initial five-year Integrated Logistics Support ("ILS") program, which includes options for additional equipment, spare parts, training, and technical support. If all options in the acquisition and ILS programs are selected, the total value will exceed $50 million, consisting of approximately $40 million for acquisition and $10 million for ILS.

Service Business

  • Service-related revenue in 2022 represented 39% of consolidated revenue. During 2022, we saw growing demand for our seabed and sub-seabed technologies offered on a services basis as customers focus on reducing risk on the build out and maintenance of offshore infrastructure installations. We have a strong position in the European market. We continue to gain traction in the emerging US offshore wind market and the Taiwan offshore wind market as our customers bring their European supply base to those new markets.

  • In September 2022, Kraken announced that it had received approval to sell its products and services to the Government of Canada under its Pathway to Commercialization initiative. Under this approval, direct purchases can be made up to $8 million per contract and are available to all government departments. In 2023, Kraken expects discussions with numerous government departments will start to bear fruit, as these entities contract Kraken to provide subsea survey services.


Non-GAAP measures, including non-GAAP financial measures and non-GAAP ratios not recognized under IFRS are provided where management believes they assist the reader in understanding Kraken's results. The Company utilizes the following terms for measurement within the MD&A that do not have a standardized meaning or definition as prescribed by IFRS and therefore may not be comparable with the calculation of similar measures by other entities and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.

Adjusted EBITDA and Adjusted EBITDA Margin

The Company believes that, in addition to conventional measures prepared in accordance with IFRS, Adjusted EBITDA is useful to securities analysts, investors and other interested parties in evaluating operating performance by presenting the results of the Company on a basis which excludes the impact of certain non-operational items which enables the primary readers of the MD&A to evaluate the results of the Company such that it was operating without certain non-cash and non-recurring items. Adjusted EBITDA is calculated as earnings before interest expense, interest income, income taxes, depreciation and amortization, stock-based compensation expense and non-recurring impact transactions, if any.

Adjusted EBITDA Margin is defined at Adjusted EBITDA divided by Total Revenue. Working capital is defined as current assets less current liabilities.






Reconcilation of Net Loss to Adjusted EBITDA






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Gross margin is defined as revenue less cost of total sales. Gross margin percentage is defined as gross margin dividend by total sales.


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Kraken Robotics Inc. (TSX.V: PNG) (OTCQB: KRKNF) is a marine technology company providing complex subsea sensors, batteries, and robotic systems. Our high-resolution 3D acoustic imaging solutions and services enable clients to overcome the challenges in our oceans - safely, efficiently, and sustainably. Kraken Robotics is headquartered in Canada and has offices in North and South America and Europe. Kraken is ranked as a Top 100 marine technology company by Marine Technology Reporter.

Financial Outlook

The Company and its management believe that the statements regarding 2023 revenue and adjusted EBITDA contained in this press release are reasonable as of the date hereof, are based on management's current views, strategies, expectations, assumptions and forecasts, and have been calculated using accounting policies that are generally consistent with the Company's current accounting policies. These statements are considered future-oriented financial outlooks and financial information (collectively, "FOFI") under applicable securities laws. These statements and any other FOFI included herein have been approved by management of the Company as of the date hereof. Such FOFI are provided for the purposes of presenting information about management's current expectations and goals relating to the Company's expected growth in its Products and Services groups. However, because this information is highly subjective and subject to numerous risks, including the risks discussed in the disclaimer for forward looking statements below, it should not be relied on as necessarily indicative of future results. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the FOFI prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although management of the Company has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended. The Company disclaims any intention or obligation to update or revise any FOFI, whether as a result of new information, future events or otherwise, except as required by securities laws.



Certain information in this news release constitutes forward-looking statements. When used in this news release, the words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "seek", "propose", "estimate", "expect", and similar expressions, as they relate to the Company, are intended to identify forward-looking statements. In particular, this news release contains forward-looking statements with respect to, among other things, business objectives, expected growth, results of operations, performance, business projects and opportunities and financial results. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Such statements reflect the Company's current views with respect to future events based on certain material factors and assumptions and are subject to certain risks and uncertainties, including without limitation, changes in market, competition, governmental or regulatory developments, general economic conditions and other factors set out in the Company's public disclosure documents. Many factors could cause the Company's actual results, performance or achievements to vary from those described in this news release, including without limitation those listed above. These factors should not be construed as exhaustive. Should one or more of these risks or uncertainties materialize, or should assumptions underlying forward-looking statements prove incorrect, actual results may vary materially from those described in this news release and such forward-looking statements included in, or incorporated by reference in this news release, should not be unduly relied upon. Such statements speak only as of the date of this news release. The Company does not intend, and does not assume any obligation, to update these forward-looking statements. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.

Neither the TSX Venture Exchange Inc. nor its Regulation Services Provide (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release, and the OTCQB has neither approved nor disapproved the contents of this press release.

For further information:

Stephen Griffin, Group Marketing Manager

Joe MacKay, Chief Financial Officer
(416) 303-0605

Greg Reid, President & CEO
(416) 818-9822

Sean Peasgood, Investor Relations
(647) 955-1274

(1) Adjusted EBITDA is a non-GAAP financial measure and gross margin and adjusted EBITDA margin are non-GAAP ratios, in each case with no standard meaning under IFRS, and may not be comparable to similar financial measures disclosed by other issuers. Refer to the "Non-GAAP Measures" section of this press release.