Nauticus Robotics Q2 2025 Earnings Call Transcript

Quartr
Provided by Quartr
August 12, 2025

Key Takeaways

  • Positive Sentiment: Q2 service revenue exceeded $2 million, up more than four-fold year-over-year, with nine clients served and improved backlog visibility into Q4 via a pending multi-month super-major oil contract that smooths seasonality.
  • Negative Sentiment: Net loss for the quarter was $7.4 million as operating expenses rose to $8.4 million—driven by higher G&A and nonrecurring acquisition fees—and cash at quarter-end stood at $2.7 million, down from $10.1 million.
  • Positive Sentiment: The strategic Seatrepid acquisition was fully integrated, expanding service capacity and channels, and is already contributing to backlog growth and improved margin profile.
  • Positive Sentiment: Progress continues on autonomy products: upcoming Q3 tests of Aquanaut with Nauticus Toolkit at AOS’s new 3.5-acre test facility aim to showcase full mission capability in realistic offshore conditions.
  • Neutral Sentiment: The strategic alliance with Leidos for subsea defense autonomy remains in early stages, with no new government contract awards this quarter due to inherently long procurement cycles.
AI Generated. May Contain Errors.
Earnings Conference Call
Nauticus Robotics Q2 2025
00:00 / 00:00

There are 11 speakers on the call.

Operator

Good morning, ladies and gentlemen. Welcome to Nauticus Robotics twenty twenty five Q2 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. This call is being recorded on Tuesday, 08/12/2025.

Operator

I would now like to turn the conference over to Kristin Mormon. Please go ahead.

Speaker 1

Thank you, and good morning, everyone. Joining me today and participating in the call are John Gibson, CEO and President Jimenez de Vares, 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 2025, which are available on our website.

Speaker 1

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.

Speaker 1

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.

Speaker 2

Well, good morning. Thank all of you for joining us this morning. Q2 twenty twenty five was a quarter of disciplined execution and significant commercial progress. We grew revenue year over year. We integrated a strategic acquisition and we positioned the company to drive long term profitable growth.

Speaker 2

Now service revenue for the quarter was over $2,000,000 that's more than four times the prior year period with strong contributions from both oil and gas and environmental compliance work. Our customer base also expanded. We served nine clients and revenue concentration improved, meaning that we have more customers and not dependent on so few. This diversification will allow us to scale as we go forward. The acquisition of Ctripod was a key milestone.

Speaker 2

It expanded our service capacity, it deepened our customer footprint, gave us a channel and it unlocked opportunities to deploy our autonomy stack including Nautica's Toolkit and Aquanaut across a much larger operating base. We're already seeing the benefits of that integration in backlog and margin profile. Importantly, we now have revenue visibility into the fourth quarter and early twenty twenty six including a pending multi month contract with a super major oil company. That opportunity expected to begin in Q4 provides valuable off season revenue and margin continuity and it's historically been a challenge to have available work for services in Q4 and Q1. This will reduce our seasonality.

Speaker 2

We continue to take a disciplined approach to liquidity. Through cost controls and capital execution, we ended the quarter with $2,700,000 in cash, up $1,200,000 at year end. This includes proceeds from an aftermarket offering, which gives us some additional flexibility as we invest in growth. Looking ahead, our strategy remains focused, drive service revenue with the expanded fleet, scale autonomy products like Aquanaut and Toolkit, convert inbound interest into long term recurring contracts and do so with financial discipline, measured investment and clear milestones. We're entering the second half of the year with real momentum, a growing pipeline, a differentiated platform and customers that really want to see innovation that help them reduce their cost.

Speaker 2

With that, I'll now hand it over to Gemina Vegetis, our Interim CFO, to get us started. Hemena?

Speaker 3

Thank you, John, and good morning, everyone. I'm excited to be speaking with you for the first time as a CFO. I will now discuss our financial results for the 2025. During Q2, we recognized further commercial revenue driven by the SeaTrapid acquisition, which has now begun to contribute meaningfully to our financial results. Revenue for the second quarter was $2,100,000 which is up $1,900,000 sequentially and up $1,600,000 from the same quarter last year.

Speaker 3

The increase in revenue was a result of the Gulf Of America season starting at the March, delivering a full quarter of revenue in Q2 twenty twenty five for the acquired assets. Operating expenses for the quarter were $8,400,000 which is up $1,900,000 from Q2 twenty twenty four and up $2,400,000 sequentially. G and A costs for the quarter were $4,400,000 which is an increase of $1,100,000 compared to Q2 twenty twenty four and flat compared to last quarter. The 2025 was impacted by the nonrecurring professional fees, primarily due to the Ctripod acquisition. Net loss for the quarter was $7,400,000 This is a $100,000 decrease in net loss sequentially and a $12,000,000 increase in net loss from Q1 twenty twenty four.

Speaker 3

This large variance is attributable to the gains in the fair value of our convertible debentures reported last year. Adjusted net loss for the quarter was $7,400,000 compared to $6,600,000 for the 2025 and $6,500,000 for the same quarter in 2024. Cash at the end of Q2 twenty twenty five was $2,700,000 compared to $10,100,000 last quarter. This is primarily a result of funding received through an at the market offering last quarter offset by the recent acquisition of SeaTrepid and cash used through operations. During the July 2025, we have reissued our at the market offering and have raised further funds to support our operational activities.

Speaker 3

As we look ahead to the third quarter, we expect continued strong operational results. We remain focused on disciplined cost control, prioritizing value added activities that enhance profitability and support long term growth. I will now pass the call back to John.

Speaker 2

Well, thank you, Jimena. Really happy to have Jimena join us and good job. As Jimena pointed out, our current forecast shows much stronger revenues in Q3 than Q2. And we've also added $3,000,000 in additional cash this past week from one of our lenders. So with that, I'm going to turn it over to Daniel Dehrhardt, our Field Operations Leader and Steve Walsh, our Sales Lead to discuss Nauticus' backlog of offshore commercial work and then over to J.

Speaker 2

D. Yamakowski, who will then discuss defense work. Really pleased to get a chance to work with these guys. We've got a strong team. Daniel, pick it up from here.

Speaker 4

Thanks, John. As a company, at the beginning of the year, we set goals and targets to work towards. And halfway through the year, I can say we have already successfully achieved quite a few of our goals. We completed more commercial revenue than all of 2024 combined. We have successfully diversified our client base by working with nine new clients already this year.

Speaker 4

We have also signed multiple MSAs with new clients to become approved suppliers for offshore work. We have diversified our market reach as we completed work for clients in offshore oil and gas, offshore wind and commercial offshore government markets. Work to date was accomplished with our ROV system successfully completing multiple inspection campaigns. We currently have both ROVs working, one off the Northeast Coast Of The United States for the offshore wind market and one working onboard the GoCosmos vessel in the Gulf Of America. As we transition from last year's proof of concept into a commercial platform, we have focused on the commercial metrics needed to be competitive, not with new technology, but with existing solutions.

Speaker 4

We experienced some delays with getting to the robustness needed to demonstrate our commercial readiness. Consequently, we delayed operations of the Aquanaut system until we were comfortable we could meet those milestones. Vehicle two is now mobilized onboard to Go Cosmos with the ROV, and a record deep dive is planned, and we will focus on successful completion of our commercial contracts throughout the year throughout the rest of the season. Our second off and on vehicle, Vehicle one, will be heading to Stuart, Florida in the coming weeks to begin our new collaboration with AOS. We are delighted to work with AOS on multiple fronts, the first being accessibility to a better equipped, larger test facility.

Speaker 4

This allows us to test the full range of our robotic capabilities in an unstructured environment. Will now be able to run complete missions in a 3.5 acre body of water compared to the limited activities that can be conducted in a pool. It also opens up the ability to host clients to see execution in an operational setting. We are also working on a plan to pair the Aquanaut vehicle with an unmanned surface vessel at the AOS facility to utilize the smaller surface expression to conduct inspections with a limited operational spread. We are working with customers who have an interest in this concept to underwrite these tests, and this facility is perfect for demonstrating the surface and subsea vehicles together in a realistic operational environment.

Speaker 4

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

Speaker 5

Thanks, Daniel, and good morning. I'm Steve Walsh, Vice President of Sales. Q2 was a strong and strategic quarter. We served nine clients across offshore wind and offshore oil and gas supported by a solid backlog extending well into Q3. Seacrepid assets are providing core revenue and the Seacrepid channel that is now the Nauticus Channel is opening new opportunities for the entire Nauticus portfolio.

Speaker 5

In offshore wind, we're executing a major Northeast U. S. Project. While the sector faces headwinds, tightening wind only service capacity is opening new opportunities. Our established relationships position us to benefit.

Speaker 5

Oil and gas remains robust. Our diversified position across energy markets allows us to capture demand wherever it is strongest. Looking to Q4, we are close to signing a multi month contract with a super major oil company running through 2026. This adds meaningful off season revenue, smoothing our earnings profile and strengthening visibility into next year. Aquanaut interest continues to accelerate.

Speaker 5

Engagement is coming from independents to super majors domestically and internationally. Aquanaut is increasingly viewed as a category defining platform and we are converting that interest into active discussions. Our fundamentals are strong, momentum is building and we are positioned to continued growth into 2026. I'm confident that our Q3 revenue will see sequential growth over Q2. With that, I'll turn it over to JD for the defense update.

Speaker 6

Thank you, Steve, and good morning, everyone. Astute followers of Nauticus may recall that we announced a strategic alliance with Leidos to advance subsea autonomy solutions in 2025. While we don't have any new government contract awards to announce this quarter, it's important to understand that government procurement, particularly in the defense sector, is often a long cycle process. Since that announcement, both companies have been diligently working towards opportunities that align with our complementary strengths to serve the interests of National Defense. I'll now turn the call back over to John.

Speaker 6

Thank you, JD and Steve and Daniel. It's clear that we're beginning to focus on sequential growth in revenues and those opportunities are there for us to seize and execute. That's the mission of the company.

Speaker 2

We remain committed to securing a defense contract as well and JD gets up every day and pursues that for Nauticus. But the real opportunity that we have coming forward that can give us revenue that isn't dependent upon wall clock time as services are is our software section. And so I'm happy now I'm going to turn the call over to Jason Close, our Software Lead. And then after that, I mean, I'll moderate will give you an update on engineering and so from their department. So Jason, I'll give it to you.

Speaker 7

Thanks, John. In the second quarter, we continued advancing Toolkit along its two commercial paths, Aquanaut operations and the enablement of world class ROVs. For Aquanaut, we advanced functional capabilities of the software in preparation for upcoming tests. The testing is scheduled to begin in the third quarter so that we're ready to offer additional trials later this year followed by wider range of services to customers in the twenty twenty six golf season. In addition, we supported the Aquanaut team with operational readiness work on the vehicle itself, which is improving the overall usability of the product and enhancing its attractiveness to future users and customers.

Speaker 7

We are excited about the AOS test facility because it allows us to further exercise Toolkit's capabilities in an operational environment. In Q2, we focused on strengthening relationships with prospective customers and partners for the commercial software. We have seen excellent interest in the continued and continue to expand and broaden our reach in this space. We're approaching opportunities that we look forward to sharing more about soon. Customer activity across our service operations remains strong.

Speaker 7

We remain focused on delivering value today through ROV and Opconot services, while steadily advancing Toolkit's capability for a wider market rollout in the near future. I will now hand it over to Amin for an update on Afranaut and electric manipulators.

Speaker 8

Thank you, Jason. In the second quarter, we successfully addressed key technical issues that enhance reliability and extend the meantime between failures of our Aquanaut platform. These engineering improvements have been fully integrated into Vehicle two, which has undergone successful validation testing in a controlled pool environment. Following these results, Vehicle two was redeployed to the vessel and is now ready for open water work. Meanwhile, upgrade work is actively underway on Vehicle one to bring it up to the same standard.

Speaker 8

We continue to experience strong market interest in our fully electric subsea manipulator. During the quarter, we made substantial progress on both the seven and the three function variants. However, in light of evolving global trade dynamics, we are experiencing extended lead times for select components across our hardware platforms. The relatively low volume of our procurement orders compared to larger industry players present prioritization challenges within supplier production queues. This has necessitated a proactive design modification during the quarter to mitigate potential disruptions and ensure continuity in system development.

Speaker 8

To address these risks, we are actively diversifying our supplier base and exploring alternative sourcing strategies. I will now hand the call back to John.

Speaker 2

Well, thank you, Amin. Most exciting part of this job is seeing customer excitement. And we just completed two jobs with really great success for both customers and that's what brings you joy when you're in the service sector. I've got excitement around the new technology, excitement around the team that we have building and delivering it, excitement around the changing market. We've got a great team.

Speaker 2

We've got a great plan and we're executing and beginning to see the revenues that can come from our efforts. With that, I'd like to turn it back to the operator and we can open it up for Q and A session. Operator?

Operator

Thank you. And your first question comes from the line of Peter Gastrich with Water Tower Research. Please go ahead.

Speaker 9

Thank you. Peter Gastrich here from Water Tower Research. So congratulations to John and the team on the results and key milestones. Really appreciate the color on revenue in the second half and customer discussions and backlog and also hearing from so many members of the Nautica team today. So thank you.

Speaker 9

Just a few questions for me. First of all, I'm just curious how you approach your different growth areas and opportunity sets. So when you consider types of jobs, oil and gas, environmental and wind energy, how do you balance those opportunities? Is there much difference in terms of the complexity or safety elements or difference in terms of the day rates you chucked in charge? I'm just curious how you approach those different sets.

Speaker 9

Thank you.

Speaker 2

That's a good question, Peter. Pleasure to meet you on the call. So the best way to describe this is I'm going to sound like a pure capitalist here, but you always triage these based upon which one of these is the highest margin. So I will we will prioritize the one that we think is going to generate the most margin for us. Margin includes all of the costs associated with it.

Speaker 2

And so we look at it holistically with do we make more money on the wind sector? Do we make more money? And also can you fill time so that you don't have any idle time as well. And so it's we're far better off to keep the assets utilized because you're paying for the boat whether it's working or not. And so we'll move back and forth.

Speaker 2

And so we're trying to optimize profitability for the company by the sectors. The good part is what we offer, the same capability and service works across multiple industries. So it's the same people, it's the same training, it's the same safety methodologies. Each company has a little more rigorous, and we have to comply with them and actually go through and certify for each one of their programs. It adds a bit of cost.

Speaker 2

But they're so similar that we're able to work in all of those sectors with the same capabilities, very fungible. We can just move from wind over to telecom, over to oil and gas, over to environmental and to include some defense related activities as well. And so think of us as just prioritizing and Steve would sit around and tell you this one's going to pay more than that one. So that's let's move them up in the queue. A big issue is with limited assets, we actually have more work right at the moment than we have equipment.

Speaker 2

And working through the scheduling for them is a challenge for us because that is how you irritate customers. And we're beginning to get to that point to where we need additional assets in order to just cover the work that we see coming in, particularly as we go into 2026 with the success of the platforms.

Speaker 9

Okay. Thank you very much. Just a second question. Recently there's been some policy clarity out of Washington DC in terms of carbon capture and sequestration. I'm just curious if you've seen I know you've identified this as opportunities before, but have you noticed any kind of a change or acceleration in those discussions relating to CCS this year?

Speaker 2

Well, see a lot of it. Probably not so much from the operations perspective and sales at the moment. But as we talk to the strategic players in market and JDs actually, I think attended not so long ago a carbon capture sequestration here in the state of Texas. It looks pretty exciting because the Bureau of Economic Geology has written papers on using the nearshore Miocene depleted reservoirs for CO2 sequestration. We're still in the early stage.

Speaker 2

When I talk about Nauticus, I think we'll be able to do a lot in terms of leak detection and monitoring of these fields, but we're in a very early stage. So I wouldn't forecast revenue for carbon capture for Nauticus now. But do I see it ramping up and long term commitment to it regardless of how this administration feels now. I'd take a long view on CO2 sequestration as opposed to one administration at a time. The priorities could change as we go forward.

Speaker 2

And very excited about their support for oil and gas with the current administration and that's really a benefit to us. But CO2 will be strong and it will come back and we're well positioned for doing the monitoring of that. In fact, we're deploying some new monitors on and sensors on our vehicle in this year that would enhance our ability to monitor CO2 leaks. But don't expect a lot of revenue from it yet.

Speaker 9

Okay. Got it. Thank you. I'll just put in one more question here before I get back in the queue. Last week, maybe the previous week, there was a lot coming out of D.

Speaker 9

C. In terms of the drone dominance. Is that tied strictly to aerial systems? Or are there implications for the aquatics as well? You did mention earlier that you have prospects for a defense contract.

Speaker 6

Yes. I'll take this question, Peter. Thanks for asking it. Now there is tremendous interest. It's something we did not address in our prepared comments, but the underwater defense market and underwater drone market is incredibly active right now.

Speaker 6

And we're very excited. That's why we're very excited with our strategic alliance with Leidos to be working with them, such a prolific partner in this scene. And really looking forward to the opportunities because there is tremendous interest there in The U. S. Defense market for these technologies.

Speaker 9

Okay. Thank you very much. It's great to hear from the whole team today. Thank you.

Speaker 2

Yes. In terms of hearing from the whole team too, Peter, I mean, the company is not about me. It really is about having all the people that you need with the different skills that are required. And I'm pretty excited about the quality of this team. I think that means we can deliver on what we promised.

Speaker 2

Next question?

Operator

And your next question comes from the line of Robert Mandrilla with Nauticus Robotics. Please go ahead.

Speaker 10

Good morning. Robert Mandrella. I'm a shareholder, and I want to thank the team here for a comprehensive earnings call and report. So thank you. So I just have a couple of questions.

Speaker 10

The first one is regarding the SeaTrepid acquisition. Is that fully paid off?

Speaker 2

No, actually it's not fully paid off. We have another cash payment that's due at the September and then there's an earn out that is TBD based upon their performance and delivery of revenue targets, which they have not achieved yet. But they have absolute confidence they will achieve. But we still are waiting on the earn out calculation and another cash payment. Half was paid in the upfront and half is due at the September.

Speaker 10

Okay. I appreciate that. Thank you. And I just had another question regarding the next quarter or two. And I appreciate the team giving an update on the defense contractors, Leidos, Navy, etcetera, and also on toolkit revenue, which from my understanding, it's minimal if nonexistent.

Speaker 10

But one of the question really comes from a prior press release that the expectation was nine x, nine times what 2024 revenue reported for this year. And I understand that's prorated, but how are we looking in terms of revenue projection to close out 2025?

Speaker 2

I warn all the people here about questions like yours where it's incredibly thoughtful. It knows the history of the company and it frames it very well. Yes, we did say 9x and the services revenue, but due to some of the delays in getting the equipment out and getting the parts, a little weaker than I would have expected softer. It's not an awful lot, but it's softer than what we anticipated. But our real opportunity is in the non wall clock revenue, which is associated with the software and also with defense.

Speaker 2

We're not exclusive to Leidos by the way. We do have a relationship with them, but we are looking at other parties to go to the defense sector with as well. And we're excited about those opportunities also. But the software side, we are working diligently because that's the piece that can get us back on track. And but on the service side, a little soft because of the delay in getting the equipment to the field.

Speaker 2

Q2 was a revenue quarter with two assets. Q3 will be a revenue quarter with three assets on the service side. And then as we go into Q4 and beyond, we should have all four of our assets, two Aquanauts, two ROVs out in the field. So you can see how we're going to continue to scale the service revenue and the upside is in the software side of the business and the manipulators. And there is tremendous interest in the manipulators.

Speaker 2

We are looking at license our designs and take a royalty back as opposed to actually building those. I don't know that we're in the position to be a manufacturer. And so Amin and the team are really making sure that we are prepared to transfer the intellectual property to another third party for manufacture and deliver. And I think that could create a strong royalty opportunity for us. But again, that's going to be a

Speaker 2

It's not something that we look at here in 2025 because we haven't concluded with anybody on licensing and then it'll take time for them to get the manufacturing piece up, particularly given the supply chain challenges that we see today.

Speaker 10

I appreciate that, John. And so my understanding so the pro form a short term looks good. Thank you. And so I have one last question before I turn it back to the queue. Regarding the cash position and $3,000,000 cash from lenders, I think that's very positive added to the $2,700,000 reserves.

Speaker 10

How do you see the cash position in this quarter and throughout 2025?

Speaker 2

Another great question. On the cash, we did we have a lender that's very supportive of the company and I'm extremely thankful for them, cash available when necessary from them as long as we make a good case and justify it. And so they have been tremendous. So we did add to debt. We have a facility is for $19,000,000 that we can draw against.

Speaker 2

And we drew the first 3,000,000 tranche out of the $19,000,000 facility to bring in the $3,000,000 And so I see the cash position as we feel secure in it. My goal is to draw the least amount I can and we're working on increasing revenues and our own margins and so that we're not taking on additional debt or having to use dilution through an ATM. And we're focused on getting ourselves to cash flow positive. But am I concerned about cash? We have really strong support.

Speaker 2

And for that strong support, no, that's not what keeps me awake at night. What keeps me awake is customer satisfaction, long periods of equipment to success in the field without any failures and getting this software package out in new market and exploring how to get these manipulators licensed. That's where my time is concentrated. The cash position I think is secure. It's not optimum because I would prefer it to just be a result of our performance and that's where we're headed and that's the plan.

Speaker 10

Very good, John. I appreciate that. And congratulations on the Seatrepid acquisition. I think that was very strategic. And congratulations to the team for all their hard work and effort.

Speaker 10

I know you guys are really trying hard. And again, I appreciate the comprehensive conference call. It answered a lot of my questions. So I wish the team here a very good Q3.

Speaker 2

Your comments, our employees listen to these calls, and it is motivational to get investors that understand the vision and believe in us. So thank you so much for the questions.

Operator

And I'm showing no further questions at this time. I would like to turn it back to John Gibson for closing remarks.

Speaker 2

I'll tell you, it's we're making great strides. The quarter could have been better because we did really just have two assets out. We have a delay in getting out of the Aquanaut. Aquanaut is out on the boat now ready to go into water. Daniel assures me it will be this week.

Speaker 2

So it's pretty exciting to see what can transpire in Q3. And Q4, I'm excited about having off season revenue. I mean, we've got really good things happening and also with the software. So excited about the partnership with AOS. I just would tell you that having a 3.5 acre lake to test in other than a pool, no customer wants to come out and watch a robot go up and down in a shallow pool.

Speaker 2

And so we get an opportunity to perform a complete mission there. You'll be able to see it as it goes around the lake there. We'll be able to put out a USB on the surface to act as a modem so that we can demonstrate what the industry is going to look like in a vessel less world where particularly nearshore operations could be conducted without vessels. This is it's exciting times for us. Everything is in work and in progress.

Speaker 2

And I look forward to reporting back to you at the end of Q3. And with that operator, thank you so much.

Operator

Thank you, presenters. And ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.

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