Nauticus Robotics Q4 2024 Earnings Report

Nauticus Robotics EPS Results

• Actual EPS: -$0.26
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Nauticus Robotics Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Nauticus Robotics Announcement Details

• Quarter: Q4 2024
• Date: 5/14/2025
• Time: After Market Closes
• Conference Call Date: N/A
• Conference Call Time: N/A

Nauticus Robotics (NASDAQ:KITT) develops ocean robots, cloud software, and services to the ocean industry. The company offers Aquanaut, an autonomous underwater vehicle with sensor suite, which provides capability to observe and inspect subsea assets or other subsea features; Olympic Arm, an all-electric manipulator designed for a variety of intervention tasks on work class remotely operated vehicles; and ToolKITT, a software platform, which consists of interrelated products for ocean sensing, manipulation, autonomous behaviors, survey, search and recovery, and manual intervention. The company was founded in 2014 and is headquartered in Webster, Texas.

Nauticus Robotics Q4 2024 Earnings Call Transcript

Presentation

[Operator]

Good morning, ladies and gentlemen, and welcome to the Nauticus Robotics twenty twenty four Q4 and Full Year Earnings Conference Call. At this time, all lines are in a listen only mode. Following the presentation, we will conduct a question and answer session. Also note that this call is being recorded on Wednesday, 04/16/2025. I would now like to turn the conference over to Kristen Woolman, Corporate Development and Administration Leader.

[Operator]

Please go ahead.

[Kristin Moorman, VP - Corporate Development & Administration at Nauticus Robotics]

Thank you, and good morning, everyone. Joining me today and participating in the call are John Gibson, CEO and President Vicki Hay, Interim CFO Daniel Dehart, Field Operations Leader Steve Walsh, Sales Leader 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 full year of 2024, which are available on our website.

[Kristin Moorman, VP - Corporate Development & Administration at Nauticus Robotics]

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.

[Kristin Moorman, VP - Corporate Development & Administration at Nauticus Robotics]

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, President & CEO at Nauticus Robotics]

Thank you, and good morning. I appreciate you guys joining us on the call today. 2024 was a transformational year for Nauticus, and we appreciate all of the support that we've had throughout the year. Our cultural shift from a research and development company into a commercial revenue generating company is well underway. We continue to deliver high value solutions to our customers by pushing technological boundaries.

[John Gibson, President & CEO at Nauticus Robotics]

2024 was our inaugural season of offshore operations for the Aquanaut vehicle. We were executing legacy contracts to prove the technology and did. We are excited about the pipeline of new contracts, which we will begin press releasing soon. Our 2025 season should demonstrate significant improvement from 2024 as we implement the lessons learned for our first commercial offshore season and put them in place to succeed in 2025. We confirmed Toolkit software operation on a Ctripod ROV.

[John Gibson, President & CEO at Nauticus Robotics]

The initial test reinforced our belief that augmenting an ROV's existing software will enable autonomy, allowing our customers to reduce their overall subsea operational cost. This opens the market for Toolkit sales to ROV operators for the very first time. Stay tuned for an announcement of the official release Toolkit for ROVs. Our manipulator team continues to develop a fit for purpose Olympic car variant and plans to install the first set onto our Aquanaut vehicle in the second half of the year. This will make Aquanaut the first autonomous underwater vehicle with autonomous manipulators.

[John Gibson, President & CEO at Nauticus Robotics]

In fact, it will make it the only autonomous underwater vehicle with autonomous manipulators. The company had year that was focused on raising money and exchanging our debt. Vicki is going to really cover the details of that in just a few minutes. We anticipate an inflection point in 2025 as we begin to help the offshore industry move from legacy operations, which means man operated as opposed to autonomy, to increased trust and reliance on a new way of executing work autonomously. Customers are already showing eagerness to fit our execution model into their current plans and excitement is building around how their operational models will change.

[John Gibson, President & CEO at Nauticus Robotics]

They're coming to us with questions and ideas and they're sparking a lot of collaborative discussions. Now Daniel and Steve are both with us today and they'll describe that in their comments in just a moment. Our acquisition of Ctripod last month was game changer for us. It provides an additional catalyst in this offshore execution transition. Existing Ctripod customers and contract relationships have given us easy access to a broader group of early adopters, which effectively reduces our customer concentration.

[John Gibson, President & CEO at Nauticus Robotics]

SeaTripit and Nauticus legacy customers are welcoming this combined offering of a vessel with both the Aquanaut vehicle and an ROV on board, and in the near future, an autonomous ROV coupled with an autonomous underwater vehicle. By installing Toolkit on both vehicles, the first subsea robotic collaboration solution will be realized and customers can see the immediate value. SeaTripage location in Robert, Louisiana provides a testing facility with much closer proximity to our launching location for the Gulf Of America, improving our logistics and reducing our cost. The government side of the company had a breakthrough in early twenty twenty five by signing an alliance with our long term customer Leidos to address emerging challenges in the defense sector. Government contracting has longer lead times, larger upside and greater stability than seasonal commercial contracts.

[John Gibson, President & CEO at Nauticus Robotics]

We're excited to pursue these opportunities. Now before I turn this call over to Vicki on our financial activities, I want to update you on our NASDAQ continued listing standards. We procured our non compliance issues with NASDAQ in early twenty twenty five. We are closely monitoring the wider markets. And with that, I'd like to turn it over to Vicki to talk about the financial details.

[John Gibson, President & CEO at Nauticus Robotics]

Vicki?

[Victoria Hay, Principal Accounting Officer & Interim CFO at Nauticus Robotics]

Thank you, John, and good morning, everyone. Let's first address the restatement that was announced on March 19 that was identified as part of the year end audit. The company yesterday filed restated 2024 financial statements as of and for the quarters ended March 31, June '30 and September 30 due to a correction of accounting treatment for a complex Q1 twenty twenty four debt transaction. The reason for the restatement revolved around the debt transaction that occurred on 01/30/2024. The transaction was incorrectly treated as debt modification rather than debt extinguishment.

[Victoria Hay, Principal Accounting Officer & Interim CFO at Nauticus Robotics]

Because of this change in accounting treatment, the debt was required to be fair valued quarterly using a Monte Carlo statistical model. The inputs variable include volatility, stock price variability and risk free rate. Given this, the change in fair value each quarter changed materially, but all of these adjustments are non cash and are excluded in our non GAAP measures. The full year non cash impact of this treatment and the subsequent exchange to preferred stock resulted in an incremental net loss impact of $106,400,000 This does not impact our shareholders' deficit calculation as the offset to this sits in APIC, giving a net zero impact on our shareholders' deficit. Important to note, this debt no longer exists on the balance sheet as of December 2024 as it was exchanged into Series A preferred stock for a fair value of $110,300,000 This is a non recurring fair value and will not be further fair valued in future quarters.

[Victoria Hay, Principal Accounting Officer & Interim CFO at Nauticus Robotics]

This preferred exchange was part of our plan to deleverage our balance sheet and successfully regain listing compliance with NASDAQ, which occurred in February 2025. In addition to regaining NASDAQ compliance, we have been keenly focused on securing the cash we will need through '25, while we ramp up commercialization. We have seen some great progress on this during Q1. In January 2025, the company conducted further at the market offerings in which we issued and sold almost 7,500,000.0 shares for net proceeds of $19,400,000 A portion of the funds enabled us to do the acquisition of SeaTrekford, which will enhance our financial position as we move through 2025. In January 2025, we reduced the conversion price of the loans under the January 24 term loan agreement to 1.59 which resulted in subsequent conversions, which further improved the position of our balance sheet.

[Victoria Hay, Principal Accounting Officer & Interim CFO at Nauticus Robotics]

I will now discuss in more detail our financial results for 2024. Revenue for the year was $1,800,000 which is down $4,800,000 from 2023. The decline in revenue was largely due to the reduction in government contracts in 2024.

[Victoria Hay, Principal Accounting Officer & Interim CFO at Nauticus Robotics]

However,

[Victoria Hay, Principal Accounting Officer & Interim CFO at Nauticus Robotics]

in 2024, the company did recognize revenue for commercial operations of the Aquanaut vehicle for the first time in the company's history and will grow on this throughout 2025.

[Victoria Hay, Principal Accounting Officer & Interim CFO at Nauticus Robotics]

Operating expenses for the year were $24,900,000 which is a $36,800,000 improvement from 2023. Excluding nonrecurring costs in 2023 of $25,400,000 impairment of property and equipment, dollars

[Victoria Hay, Principal Accounting Officer & Interim CFO at Nauticus Robotics]

2,500,000.0 loss on contract and $1,500,000 severance costs, operating expenses dropped $7,400,000 year on year, primarily due to continued focus on cost control. G and A costs for the year were $13,400,000 which is an improvement of $4,900,000 compared to 23,000,000 This is primarily due to headcount reductions and a result of dedicated focus on reducing costs and eliminating non value added spend. Net loss for the year was $134,900,000 This is an $84,200,000 increase from the net loss in 2023. This is primarily due to the $127,600,000 loss on extinguishment of debt recognized during the year, partially offset by the change in fair value of $21,100,000 related to warrant liabilities and debentures and $25,400,000 impairment recognized in 2023 that did not occur again in 2024. Adjusted net loss for the year was $26,100,000 compared to $34,300,000 for the prior year.

[Victoria Hay, Principal Accounting Officer & Interim CFO at Nauticus Robotics]

This shows an $8,200,000 improvement even considering the $4,800,000 reduction in revenue year on year. Cash at the end of twenty twenty four was $1,200,000 compared to 700,000 at the end of twenty twenty three. This is primarily a result of funding received through debt and equity financings and an at

[Victoria Hay, Principal Accounting Officer & Interim CFO at Nauticus Robotics]

the

[Victoria Hay, Principal Accounting Officer & Interim CFO at Nauticus Robotics]

market offering offset by cash used in operations. Last year, we did a lot of work to deleverage and clean up the balance sheet. Throughout the year, we converted debt with a principal value of $35,500,000 to preferred stock in December 24. We did take on new debt of $14,300,000 in the first half of twenty twenty four and a further 2,100,000 with a fair value of $2,500,000 in the second half of the year. With these actions, along with the raise to our aftermarket facility during Q1 twenty twenty five, we are in a strong position in 2025 to continue the path of commercialization of the Aquanaut vehicle while staying appropriately funded.

[Victoria Hay, Principal Accounting Officer & Interim CFO at Nauticus Robotics]

I will now pass the call back over to John.

[John Gibson, President & CEO at Nauticus Robotics]

Thank you, Vicki, and thank you a great deal for the company on all the tireless work you've done to get this prepared. Just to recap, we substantially reduced our run rate 2024. We substantially improved our balance sheet, and we generated commercial revenue for the first time with the Aquanaut. Now I'm going to turn this over to the exciting part of this call. Things changed here.

[John Gibson, President & CEO at Nauticus Robotics]

I much prefer talking about customers and revenue than I do about things that have passed. I'm going turn it over to Daniel and Steve to discuss the emergence of Nauticus' first backlog of offshore commercial work.

[Daniel Dehart, Executive Vice President of Field Operations at Nauticus Robotics]

Thank you, John. I'll provide a summary of our readiness for the upcoming offshore season and Steve will then cover the upcoming pipeline. Aquanaut Vehicle two, which completed work off The United States Gulf Coast last year, is currently scheduled to mobilize onboard a vessel along with the Comanche ROV in the coming weeks. With the Seatrepid acquisition, we expect a significant backlog of work to be contracted for this year for the vessel and are currently working through the schedule to ensure commercial efficiency throughout the year. We plan on working for numerous new customers this year, which will effectively reduce our customer concentration.

[Daniel Dehart, Executive Vice President of Field Operations at Nauticus Robotics]

We will be conducting inspections highlighting the efficiency and cost reduction potential the Aquanaut system will provide while maintaining flexibility with high quality ROV service. We also have contract discussions ongoing with our current customers who are eager to take advantage of our service. Previously, the deepest we have communicated with the Aquanaut system was at a depth of roughly 1,300 meters, but we are now excited for the opportunity to complete a deepwater communications test after mobilization of the vessel to a targeted goal of 3,000 meters. This untethered test will help set the standard for future applications and expand the operational functionality of the vehicle throughout industry. As we continue to focus on operational readiness for the offshore commercial work, we also want to continue pushing the Aquanaut technology further to enhance the capabilities of the platform.

[Daniel Dehart, Executive Vice President of Field Operations at Nauticus Robotics]

With that, I'm excited to update that we have completed our factory acceptance test in water on our second Aquanaut vehicle. We have identified another test location in Florida for further testing of the capabilities of the vehicle with plans to complete a contracted demonstration on leak detection in addition to testing the Aquanaut system with an autonomous surface vehicle or ASV. We are in communication with multiple customers who are interested in nearshore work without the use of a large vessel and believe we can support this concept with a successful test paired with the ASV. The third Aquanaut vehicle build plan is ongoing and parts are consolidated to maintain readiness to assemble. Workload for this year has created demand for additional vehicles, but the goal is to focus on delivering exceptional service in 2025 and prepare for vehicle reassembly to perform future work.

[Daniel Dehart, Executive Vice President of Field Operations at Nauticus Robotics]

The SeaTrepid acquisition also provided a great opportunity to expedite the integration of our toolkit software with the Comanche ROV. We successfully implemented our software into the existing Comanche operating software with plans to test our commercial release on the vehicle in the coming months. The results of this integration will provide the ROV technological advances that include station keeping and waypointing. These are the first steps towards automating the ROV functionality. We are currently seeing the busiest offshore market for the Gulf Coast region in quite some time, and we are in great position to take advantage of the hot market this year.

[Daniel Dehart, Executive Vice President of Field Operations at Nauticus Robotics]

With that, I will now turn it over to Steve for an update on our 2025 offshore commercial pipeline.

[Steve Walsh, VP - Sales at Nauticus Robotics]

Thank you, Daniel. I'm excited to be here today and looking forward to what our combined offering will bring to the offshore industry. I'm pleased to announce we recently commenced a long term ROV contract with a leading marine transportation company to provide drill support operations off The United States Gulf Coast. The contract is confirmed for one hundred and twenty days with the potential for additional days if needed. We're currently operating off the coast of New York in the offshore wind industry.

[Steve Walsh, VP - Sales at Nauticus Robotics]

The project started early this month and is scheduled to return back to the Gulf Coast in early May. Upon arrival of the ROV to Louisiana, we plan to mobilize onboard the DP2 vessel alongside the Aquanaut vehicle. The current customers are excited about the potential to utilize our autonomous technology this year. We have firm work to complete Level two and Level three inspections on multiple producing platforms off the Gulf Coast. These projects are expected to be completed within a thirty day block.

[Steve Walsh, VP - Sales at Nauticus Robotics]

In addition to that, we are in communication with a super major oil and gas company on a large inspection campaign for decommissioned assets. Based on the meetings with this customer, we feel strongly that we will be awarded a minimum of thirty to forty five days of work. We have continued work with other super majors who have previously utilized the Aquanaut vehicle and due to the successful initial programs in 2024, they are excited to put the system back in the field this summer. The initial expected duration of these projects is a minimum of twenty five days. Another scope that has recently presented itself off the Eastern Coast Of The United States when operating the technologies of both the Aquanaut vehicle and the ROV simultaneously allowing for greater efficiency and utilization of the assets on board.

[Steve Walsh, VP - Sales at Nauticus Robotics]

This is an environmental assessment that could lead to another twenty days of work for the mobilized spread. With the work described and the additional work expected to come due to the intensity of the market, there is a great opportunity to demonstrate the effectiveness of autonomy in hazardous environments. 2025 is shaping up to be one of the busiest offshore markets of the past decade. We anticipate our contracts to return strong margins in a steady stream of revenue during the North American offshore season. And with that, I will now turn it back over to John.

[John Gibson, President & CEO at Nauticus Robotics]

Well, I appreciate that, Steve. It's been a real pleasure to be a part of this team and witness all that has been accomplished. 2025 is expected to be another outstanding year as we continue to bring customers and increase the number of engagements we have. This is a target rich environment offshore right now for equipment and bringing solutions much like what we have. During the last call, we mentioned being on the cusp of achieving what we set out to do with Nauticus Robotics was founded.

[John Gibson, President & CEO at Nauticus Robotics]

That's to provide collaborative, autonomous underwater robotic solutions for our customers on a commercial basis. And this really is going to help them reduce their operations cost and still have a great solution for our shareholders because it will be a high margin operation. We created a new company, a new culture in 2024. And now we're focused on customer needs, not just new technology. We're positioned to have a substantial revenue growth and margin improvement year over year.

[John Gibson, President & CEO at Nauticus Robotics]

And with us today is also the Founder of Ctripod, Bob Christ, who joined, I would say let him introduce himself. Bob? Hi. I'm Bob Christ. I am delighted to be a part of the team.

[John Gibson, President & CEO at Nauticus Robotics]

We are so excited about the new possibilities of the combined companies, and we are working hard to get the Aquanaut technology and new autonomous technology onto our traditional menu of services and into the field. Bob has been instrumental in enabling us to achieve our vision. Their support, their knowledge and in particular their customer relationships are transformational for us. And so glad to have both Steve and Bob on board. And with that, I'd like to turn it over, operator, to questions.

[Operator]

Thank you, sir.

[Operator]

You.

[Operator]

First, we will hear from Kunal Madhukar at Water Tower Research. Please go ahead.

[Kunal Madhukar, Managing Director at Water Tower Research LLC]

Hi. Thank you for taking my questions. Excited, about 2025. So the first one would be about 2025 and trying to understand what the top line could be. Thank you for talking about the pipeline.

[Kunal Madhukar, Managing Director at Water Tower Research LLC]

Help us understand, one, in a simple p times q, number of days in a season that you should be operational at least for '25 and understand that could expand, late in later years. But number of days in the season, number of vehicles you have, and how should we kind of think of sizing the 2025 potential revenue opportunity?

[John Gibson, President & CEO at Nauticus Robotics]

Daniel, why don't you cover the number of days in the season?

[Daniel Dehart, Executive Vice President of Field Operations at Nauticus Robotics]

Well, the the season runs from anywhere kinda right where we're March, April is the early portion of the season, and it goes through October, November based on weather. That's when weather starts picking up. And so from those months, it's about a seven month window. They can expand a little bit if we're lucky with weather.

[Daniel Dehart, Executive Vice President of Field Operations at Nauticus Robotics]

So that's our target area.

[Daniel Dehart, Executive Vice President of Field Operations at Nauticus Robotics]

And for our offshore assets, we actually have two Aquanaut vehicles working now, both vehicle one and number two. We have two Comanches working.

[John Gibson, President & CEO at Nauticus Robotics]

And we also have a third Aquanaut that requires some capital and assembly and a third ROV. And we're looking at the market. And if the demand is great enough and we see an opportunity to actually invest in those and put them in the market with a good return on capital, would entertain doing that as well, Kannal.

[Kunal Madhukar, Managing Director at Water Tower Research LLC]

Great. So how should we think of like the potential revenue for 2025?

[John Gibson, President & CEO at Nauticus Robotics]

Significantly higher than '24. I mean, we we would I'd I'd say, I think we announced that, you know, we'd be in and I'll just repeat a number put out before, but I mean, I'm really confident we will do greater than $16,000,000 in 2025. I'm a little hesitant to say how much greater, but you can assume there's upside in that number, particularly if we found the capital to put the two additional assets to work.

[Kunal Madhukar, Managing Director at Water Tower Research LLC]

Great. Thanks. So the second one would be on, you know, the competitive landscape. And there are a number of companies that have autonomous underwater vehicles. What is your differentiation?

[Kunal Madhukar, Managing Director at Water Tower Research LLC]

And you kind of alluded to it in terms of manipulators and being the first one out there. But what makes your solution compelling to prospective customers?

[John Gibson, President & CEO at Nauticus Robotics]

Well, it's really good and hard question. To compare and contrast these, you'd almost have to put together a consumer chart where you had circles that you filled in. And the place where we fill in really strong is we have a leadership position in manipulators for autonomous underwater vehicles. And those manipulators will be something that are not a part of competitive platforms such as Freedom for motioneering. We have a payload capacity in the front of the vehicle that allows us to take objects and place them on the sea bottom or pick objects up from the sea bottom and bring them back to the surface.

[John Gibson, President & CEO at Nauticus Robotics]

That also could be advantageous in doing fluid sampling if we're looking at leak detection. Very differentiating. You wouldn't have to send an ROV out to catch fluid samples after the AUV had discovered a leak or indication. And so we're able to eliminate quite a lot of cost for customers. We are completely untethered.

[John Gibson, President & CEO at Nauticus Robotics]

We still find most of the AUV operators work in this area due to collision avoidance, etcetera, are remaining tethered. And our vehicle is untethered and we depending on our collision avoidance software and continue to certify, verify and test that as we go to make sure that we're on the very the leading edge of collision avoidance for underwater vehicles. Fortunately, the speed that we're going makes us much simpler than trying to control a Tesla doing 90. We're just trying to control an underwater vehicle doing two, three knots. Our depth is quite good at 3,000 meters, and I think most of our competitors have not gone to that depth yet and tried to communicate with the surface.

[John Gibson, President & CEO at Nauticus Robotics]

And another if you compare us to say a Hugin, a Hugin is more of a torpedo, a missile in the water. It goes in a straight line, takes a long distance to turn, and it has to continue moving when it comes back. Our entire design is to work more like an aquacopter. We can stop, hover and rotate around objects and so that we can get three sixty degree views and we can do that efficiently without passing by and coming back, passing by and coming back. And so speed of operations is significantly higher and the quality of imaging is quite high when you're able to orbit an object as opposed to do flybash.

[Kunal Madhukar, Managing Director at Water Tower Research LLC]

That's great. The last question is about capital and understanding your liquidity. And you talked about potentially investing in a third or third ROE if there is demand. So can you talk about the capital requirements for the business?

[John Gibson, President & CEO at Nauticus Robotics]

Good question. Obviously, we were just becoming commercial last year, and so we used substantial amount of capital in order to prove that the technology we have is commercial and ready for prime time. Now that we're out and we're seeing a tremendous amount of demand, based on this demand, we really need to try to put additional assets to work because the more assets we put to work, the greater our income will be here. And so the two we have are we have one Comanche and 25 and we have an Aquanaut Vehicle three. And we do think Steve and Daniel are tasked with the following that is if they can bring a contract in here for those two, then we believe we can get contract based lending, so a non dilutive approach to bringing in capital to put those assets to work.

[John Gibson, President & CEO at Nauticus Robotics]

And if you sort of you look at any one of those assets and you think that the total revenue including the vessel, the asset is can generate in that 6,000,000 to $8,000,000 per season revenue. And it's just a question of how soon in the season can we get those together and get those contracts in order to have the funds to assemble those without diluting shareholders.

[Kunal Madhukar, Managing Director at Water Tower Research LLC]

That's great. Thank you so much.

[Operator]

Thank you. Next question will be from Paul Edstrom. Please go ahead, Paul.

[Analyst]

Yes. Good morning. Thanks for taking the call. I was just curious that you mentioned this season in particular is sounding to be a very good one. And what are the market dynamics that led to that or led to this, excuse me?

[John Gibson, President & CEO at Nauticus Robotics]

It's interesting. Could I'll let Steve answer this as well, but it does look like a really good season. Oil prices have been stable and in a position where people can make long term plans. Offshore is a long term investment cycle, so they're looking at full cycle economics offshore, and it's not as much a short term market like you have on onshore shallow drilling. So these are extremely long term commitments they make on platforms and development.

[John Gibson, President & CEO at Nauticus Robotics]

And now they're doing the inspections, etcetera. Some of it's regulatory as well. Steve, what's driving the market?

[Steve Walsh, VP - Sales at Nauticus Robotics]

Well, atmosphere of drilling is being pursued and pushed by the government is attractive to our customers. The decommissioning aspects where companies have brought back old assets that they're looking to understand what's going on, inspect and then work on removing and just the general vitality of oil and gas right now. And additionally with wind, with some of the other environmental aspects. I guess it's many of the disciplines coming together

[John Gibson, President & CEO at Nauticus Robotics]

that are working to Another real macro aspect of it Paul is this industry suffers from non investment for long periods when the market's down, and that's where we are offshore at the moment. There's been a lot of lull in general investment. Now everybody is working on their infrastructures, they're expanding infrastructure, they're improving their infrastructure and it's just creating a lot of subsea demand. But hopefully that helps some.

[Analyst]

Yes. Thank you. I guess having been an investor early on with you folks and the breadth of the market opportunity, I just wonder if it's causing you to pivot at all differently, or I guess it sounds, that you're just staying with the opportunities that you've had over the last year or so and executing on those is really where your focus continues?

[John Gibson, President & CEO at Nauticus Robotics]

So I wouldn't characterize anything about a pivot. Mean, we have a great platform and we're just approaching those markets that have high demand and look like they can return the margins that we need. First off, thank you for being a long time investor in the company. Appreciate you sticking with us and asking some questions. The big difference for us, I was talking to someone earlier, is we're in a market now that's emerging and there's a lot of demand for the Aquanaut, a lot of conversations going on.

[John Gibson, President & CEO at Nauticus Robotics]

If I look at competition, this is a great place to invest because our competitor really is Oceaneering. And if I had to talk about Oceaneering, I'd say if you combined both of these fleets together, there's not enough assets to meet the demand that we see coming for autonomous subsea vehicles. So I don't even think of them as a competitor. We both need to do well so that autonomy is adopted faster and the diffusion rate picks up. So we're at that point where this technology is going from a whiteboard to commercial.

[John Gibson, President & CEO at Nauticus Robotics]

And it's a matter of getting these in, getting the operational processes in place and just delivering great results for customers.

[Steve Walsh, VP - Sales at Nauticus Robotics]

Paul, I'd also like to mention that we've had the opportunity to visit and talk to some of our existing customer base and introduce Aquanaut. And the excitement that our clients have to combine both the ROV capability and technology along with Aquanaut and the autonomy that it delivers is really exciting and that scope is expanding and they are providing more and more opportunities for us. And so I think that the combined technologies are being very well received by customer base.

[Analyst]

Thank you for your input.

[Operator]

Thank you. And at this time Mr. Gibson, we have no further questions. Please proceed.

[John Gibson, President & CEO at Nauticus Robotics]

No. I greatly appreciate all the people that are on the call and particularly our employees and our customers that are listening. We've got incredibly dedicated workforce,

[John Gibson, President & CEO at Nauticus Robotics]

and we wouldn't have

[John Gibson, President & CEO at Nauticus Robotics]

made all this progress without them. A lot of us work hard, long hours, and I just appreciate their sacrifice. I'm also excited about the fact that this is probably the last call that we'll have to do where revenue and is something that we don't really focus on as much as we should. Q2, we'll be talking about our revenue. You'll be able to see the revenue.

[John Gibson, President & CEO at Nauticus Robotics]

You'll be able to see the margins. And we're excited about the fact that we're shifting into being a true commercial company from an R and D company. And stay tuned for Q2. I think good things are on the horizon. Thank you so much, operator.

[Operator]

Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time, we do ask that you please disconnect your lines.

Participants

Executives

• Kristin Moorman, VP - Corporate Development & Administration
• John Gibson, President & CEO
• Victoria Hay, Principal Accounting Officer & Interim CFO
• Daniel Dehart, Executive Vice President of Field Operations
• Steve Walsh, VP - Sales

Analysts

• Kunal Madhukar, Managing Director at Water Tower Research LLC
• Analyst