Nauticus Robotics Q2 2026 Earnings Call: Complete Transcript

On Thursday, Nauticus Robotics (NASDAQ: KITT ) discussed second-quarter financial results during its earnings call. The full transcript is provided below. This content is powered APIs. 2 million.

1 million, driven by non-cash losses on debt transactions. 5 million. They are focused on preserving their NASDAQ listing and maintaining financial flexibility. Nauticus Robotics is diversifying into offshore wind and defense sectors, successfully deploying their Comanche ROV integrated with Nauticus Toolkit software, which improved operational efficiency.

The company is shifting strategy to become a primary contractor, focusing on fixed-price contracts to capture margins. They launched the Nauticus Toolkit software for ROVs, aiming for recurring revenue from 2027. Nauticus Robotics is prioritizing defense and government opportunities, aligning their technology with autonomous subsea systems and infrastructure security needs, with active proposals in the defense sector. International expansion is underway, particularly in the UAE, with a new facility and partnerships positioning them for regional growth.

Management remains optimistic about long-term growth, focusing on executing strategy, expanding market presence, and creating shareholder value. Full Transcript OPERATOR Hello everyone. Thank you for joining us and welcome to the Nauticus Robotics second quarter 2026 earnings call. After today's prepared remarks, we will host a question and answer session.

If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Kristen Moorman, Corporate Development Lead. Kristen, please go ahead.

Kristen Moorman, Corporate Development Lead Thank you and good morning everyone. Joining me today and participating in the call are John Gibson, CEO and President, Ximene Begares, Interim CFO, and other members of our leadership team. On today's call, we will first provide prepared remarks concerning our financial and operations results. Following that, we will answer questions.

We have now released our results for the quarter ending June 30, 2026, which are available on our website. In addition, today's call is being webcast and a replay will be available on our website shortly following the conclusion of the call. Please note that comments we make on today's call regarding projections or our expectations for future events are forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control.

These risks and uncertainties can cause actual results to differ materially from our current expectations. We advise listeners to review our earnings release and the risk factors discussed in our filings with the SEC. Also, please refer to the reconciliations provided in our earnings press release, as we may discuss non-GAAP metrics on this call. I will now turn it over to John.

John Gibson, Chief Executive Officer Thank you, Kristen, and good morning everyone. Glad you're joining us today. I'm going to save my remarks until the conclusion of the call today, so at this point I'd like to just turn it over to Ximene to walk through the financials. Ximene.

Ximene Begares, Interim CFO Thank you, John, and good morning everyone. During our second quarter, we remained focused on strengthening the company's capital structure and preserving our NASDAQ listing. 5 million while supporting stockholder equity. I will now discuss our financial results for the second quarter of 2026.

2 million compared to the same quarter last year. 0 million sequentially. This reflects a continuous focus on cost management, partially offset by increased activity levels. 1 million from the same quarter last year.

1 million quarter over quarter, demonstrating continued discipline managing our corporate overhead. 4 million in the second quarter of 2025. The increase was driven mostly by non-cash losses recognized on debt extinguishment transactions related to the exchange of outstanding debt for equity securities. 4 million in Q1 2026.

6 million at the end of 2025. This decrease is related to cash used in operating activities. As we enter the second half of the year, our priorities remain clear: continuing to strengthen the balance sheet, maintaining disciplined cost management, and ensuring we have the financial flexibility to support commercial execution and future growth opportunities. With that, I will now hand the call over to Steve Walsh, our sales lead, for an update.

Steve Walsh, Sales Lead Thank you, Ximene, and good morning. Entering the year, many operators based their capital spending plans on oil prices in the mid $50 to $60 per barrel range, which led to a more cautious approach to offshore activity in the Gulf of Mexico. As a result, several projects we had anticipated moving forward this year have been deferred into 2027 and in some cases beyond. In response to these market conditions, we've adjusted our operating model to better align our cost structure with current demand.

Our objective has been to maintain flexibility to rapidly deploy our personnel and equipment when projects move forward, while avoiding the expense of maintaining a fully mobilized vessel throughout the entire work season. This disciplined approach allows us to remain responsive to customer needs while managing costs and preserving financial flexibility. While these market dynamics have impacted the timing of work in the Gulf, we have made meaningful progress in diversifying our business.

We've expanded our presence in the offshore wind market along the East Coast, successfully completed work with one of the world's largest subsea cable-laying companies, have projects scheduled on the West Coast in the coming months, and currently have international tendering opportunities. We also achieved an important operational milestone by successfully deploying a Comanche ROV integrated with our Nauticus Toolkit software. The combined system performed exceptionally well for our client, demonstrating the value of integrating intelligent software with proven subsea hardware.

Nauticus Toolkit demonstrated the ability to improve the ROV's operating efficiency while reducing pilot workload, allowing missions to be executed more effectively and consistently. This successful deployment further validates our technology strategy and provides another example of how our software-enabled solutions can help customers improve productivity, reduce operating costs, and enhance the overall efficiency of subsea operations. In addition, we are actively pursuing opportunities outside the United States where we believe our technology and capabilities are well aligned with growing demand for efficient autonomous offshore operations.

We are also seeing a growth in the number of opportunities in the defense sector. While these efforts remain in the early stages, we're making strategic investments in marketing capabilities, alliances, and business development to position Nauticus to compete effectively for this work. We believe our autonomous subsea technologies and software-driven solutions are well suited to support the evolving defense and national security missions, creating another avenue for long-term growth and diversification.

Although the near-term offshore oil and gas market remains challenging, we're encouraged by the strength of our opportunity pipeline, the continued expansion of our customer base across multiple offshore markets, and the progress we're making in positioning the company for long-term growth. We remain focused on executing our strategy, expanding our commercial footprint, and creating sustainable value for our shareholders. With that, I'll turn it over to Brian Allen, our revenue lead, for his thoughts on 2026. Brian Allen, Revenue Lead Thanks, Steve.

Ximene has taken you through the numbers and I want to cover why this business has been hard to forecast and what we're doing about it now. Looking at our revenue the way an investor would, I see a business that's hard to model and there are four reasons for that and we are changing all of them. First, where we sit in the contracting chain, our services business is mostly time-and-materials oriented and we normally bid as a subcontractor. That means we win work only if the company above us wins theirs first, their timing sets ours, their price affects ours, and when their contract slips, our revenue moves with it.

And that's what's been happening. Second, time-and-materials pricing hands the customer the efficiency our technology creates. So we finish faster, they pay for fewer days and we earn less overall. And third, our software has only recently become a defined product.

While it was maturing, it wasn't able to be sold easily. And lastly, pipeline coverage. You carry more opportunity than you need because not everything converts and in a soft market that coverage has to be higher. So here's what changes.

We're targeting a significant increase in pipeline coverage for 2027 and widening where it comes from, starting up sales activity internationally and across the defense sector. Defense inquiries are already up and those use cases align well with what our technology does reliably today and we have active proposals out now. The services business that we're building internationally will bid as the main contractor on work where our autonomy gives us a real advantage and when we hold the contract, we set the price and the scope and we keep the margin our technology creates. We are putting the quality systems in place to bid at that level.

Those contracts will be fixed price. When our autonomy takes days out of the job, that shows up in our margin. And finally, I'm extremely pleased to announce the first formal release of our Nauticus Toolkit software for ROVs, now on sale to underwater fleet operators across the energy sector and defense groups. Jason will tell you a little bit more about that shortly, but for the business it starts bringing in recurring, predictable revenue from 2027 and we will communicate our bookings and backlog in future calls.

I'll now hand you over to Jason. John Gibson, Chief Executive Officer Well, thank you, team, for the updates. And before we open the line up for questions, I'd like to step back from the individual updates you've heard today and try to put them into perspective. There's no question that 2026 has been a challenging year.

The offshore markets developed more slowly than we anticipated, customer projects have shifted to the right, and our financial results reflect that reality. Rather than waiting for the market to improve, we've taken decisive action. We've reduced our cost structure, we've strengthened our balance sheet, we've broadened our addressable markets, and sharpened our focus on the opportunities where we believe Nauticus Robotics can create the greatest long-term value. Just as importantly, our technology has continued to advance.

Nauticus Robotics' toolkit has now been successfully deployed in customer operations, and we are formally taking that product to market. Aquanaut continues to mature around specific commercial and defense missions, and our next-generation electric manipulator has entered functional testing. Increasingly, these technologies are coming together as an integrated autonomous platform capable of addressing larger opportunities in subsea autonomy, critical infrastructure protection, and persistent ocean sensing. We're also evolving how we go to market.

As Brian discussed, our objective is to build a business with more predictable, higher-margin revenue by expanding software sales, pursuing fixed-price projects where we capture the economic benefits of autonomy, and ultimately growing recurring product and service revenue. That transition is fundamental to creating a more scalable and valuable company. Over time, defense and government markets are becoming an increasingly important part of our strategy. Around the world, governments are investing in autonomous maritime capabilities, subsea infrastructure security, and persistent maritime domain awareness.

We believe Nauticus Robotics has developed technologies that are well aligned with those priorities and position us to compete in markets that we expect to grow for many years. Internationally, we're progressing in the United Arab Emirates. We have secured a facility, we are expanding our business entity, and are planning for future operations and manufacturing. More importantly, we have developed an outstanding relationship with our partners there, and I remain very optimistic that the UAE can become an important regional hub for Nauticus Robotics as we expand internationally.

So while the first half of the year presented challenges, I believe Nauticus Robotics enters the second half of 2026 stronger, a more focused company with a clear commercial strategy and expanding product portfolio and opportunities across commercial, defense, and international markets. Our priorities are straightforward: execute, deliver for our customers, convert our pipeline into contracts, and continue building long-term shareholder value. Now, before we conclude, I'd like to briefly address a topic that many shareholders have asked about. We've seen discussion regarding the possibility of another reverse stock split.

We have no desire to undertake another reverse split, and we're pleased that our recent share price recovery has improved our position. Based on where we stand today, a reverse split is not required to maintain our NASDAQ listing. At the same time, we continue to monitor and prepare for any changes to NASDAQ's listing standards to ensure we remain in compliance and well-positioned for the future. Finally, I want to thank our employees for their dedication, our customers for their trust, our partners for their collaboration, and our shareholders for their continued confidence and support.

We appreciate your commitment to Nauticus Robotics. We look forward to updating you on our continued progress in the quarters ahead. And with that, I'm happy to open up the line for questions. Operator.

OPERATOR Thank you. We will now begin the question-and-answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again.

We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Your first question comes from the line of Peter Gastreich with Water Tower Research. Peter, your line is open.

Please go ahead. Peter Gastreich, Analyst at Water Tower Research Thank you very much. Good morning, and thanks for taking my questions with the Nauticus Robotics team. I really always appreciate hearing from the expanded team on these calls, so thanks for the detail there.

Yeah, just a few questions from me starting out. It feels like you've been building toward this in the previous calls, but I believe it's the first time that you've stated primary contractor explicitly. Now, if I understand it correctly, serving as a primary contractor internationally means that you would be taking on maybe vessel commitments and more execution risk. But could you talk about the trade-offs in that primary contractor strategy and what they mean for your margins and capital intensity?

John Gibson, Chief Executive Officer Yes. Brian, why don't you take that question from Peter? It's good to hear from you, Peter. Go ahead, Brian.

Brian Allen, Revenue Lead Yeah, so this was one of the things which the team brought in as a strategy change relatively recently. Now, with regard to the risk element to it: yes, if you look at primary contracting status, where you're actually running your own vessel, it's a lot riskier, but we're not looking to do that. So we're not looking at taking long-term charter commitments. , we can bring a boat in for a particular project, mob it up, and then move it on to other projects for the summer, and then demobilize it for the winter, thereby minimizing risk with shorter-term contracts.

The reason why we get that flexibility is because the more we use our own software systems in our projects, the greater the margin we actually have to play with. And we are starting to work on focusing on two particular types of contract types, so we can actually specialize on things which are fitting to the toolkit.