Kraken Robotics Inc. (TSXV: PNG) reported second-quarter revenue of $27.3 million, a 4% increase year-over-year, as it prepared for the integration of its Covelya Group acquisition.

The marine technology firm delivered an adjusted EBITDA of $5.0 million for the quarter ended June 30, 2026. The results exclude any contribution from Covelya, which closed on July 2, 2026, marking the start of combined reporting for the third quarter.

Financial Performance

Consolidated revenue rose from $26.4 million in Q2 2025 to $27.3 million in Q2 2026. This growth was driven by strong product sales, including the delivery of a KATFISH towed synthetic aperture sonar system for a Navy minehunting program, and modest expansion in the subsea services division.

Product revenue increased 2% to $16.9 million, while service revenue grew 6% to $10.5 million. However, reported revenue was negatively impacted by a $1.5 million reversal due to a change in scope on an integration project nearing completion. Excluding this reversal, revenue would have grown 9% year-over-year to $28.8 million.

Gross profit expanded 10% to $16.2 million, pushing the gross profit margin to 59%, up from 56% in the prior-year period. Adjusted EBITDA grew 7% to $5.0 million, maintaining an 18% margin. Excluding the scope-change reversal, adjusted EBITDA margin would have been 20%, representing 26% year-over-year growth.

What the Numbers Show

The divergence between the reported net loss and operational profitability highlights significant non-recurring charges. While the company posted a net loss of $7.5 million, this figure includes a $6.9 million "other loss" provision related to arbitration costs from a 2017 supplier contract. Adjusting for this item, along with restructuring and share-based compensation, yields an adjusted net income of $0.8 million. This indicates that core operations remain profitable despite the legal provision drag on the bottom line.

Balance Sheet and Orders

Total assets surged to $724.7 million from $184.3 million a year earlier, largely due to $396.7 million in subscription receipt proceeds held in escrow for the Covelya acquisition. Cash reserves stood at $91.3 million, up from $32.9 million, supporting working capital of $151.8 million.

Kraken secured over $27 million in new product orders during the quarter, bringing total announced orders for 2026 to $355 million on a combined basis with Covelya. Notable wins include a long-term master supply agreement for subsea batteries to support extra-large unmanned underwater vehicles.

Outlook

Management maintained its 2026 guidance, which incorporates a half-year contribution from Covelya. The company expects consolidated revenue between $290 million and $320 million, with adjusted EBITDA ranging from $65 million to $75 million. Capital expenditures are projected between $27 million and $33 million.

Kraken Robotics Inc. has secured $35 million in new product orders from customers in maritime defense, offshore energy, and ocean science. The orders span navigation and positioning systems, multi-aperture sonar, positioning and monitoring systems from Covelya, and Synthetic Aperture Sonar (SAS) from Kraken. The company has announced $327 million in total product orders to date in 2026 for Kraken and Covelya on a combined basis across defence and offshore energy customers.

Greg Reid, CEO of Kraken Robotics, stated that the product portfolio is expected to represent over 75% of consolidated revenue in 2026. The portfolio supports crewed platforms such as ships and submarines, as well as uncrewed systems including autonomous underwater vehicles (AUVs), uncrewed surface vessels (USVs) and remotely operated vehicles (ROVs). The technologies are also deployed in unattended seafloor sensors.

Defence Market Growth

The company reported increased demand across several defence segments. Orders for the Sentinel Intruder Detection Sonar (IDS) Systems in 2026 reflect heightened demand for port and harbour security from customers in the Middle East and Europe. The KATFISH remotely operated towed vehicle (ROTV) has seen a large pipeline of opportunities focused in North America, Europe, and the Middle East, with recent expansion to the Asia Pacific region. The company expects programs for this solution to be awarded starting in the second half of 2026.

Demand for SeaPower Subsea Batteries continues to grow, with multiple new defence customers added in 2026 across North America, the U.K., Europe, and the Asia Pacific region. The company noted that multiple AUV customers have switched to Kraken from alternative battery suppliers. Additionally, the SPRINT-Nav Navigation & Positioning System and Vigilant Forward-Looking Sonar (FLS) are seeing growing interest, with initial orders from notable USV companies for the FLS.

Offshore Energy and CCS Initiatives

In the offshore energy market, the company is expanding into new growth areas including seismic data acquisition and carbon capture and storage (CCS) applications. Sonardyne has been collaborating with major oil and gas producers in Brazil since 2018 to develop On Demand Ocean Bottom Nodes (OD OBNs). The qualification of OD OBNs for commercial use began with a deployment in early 2026 at the Petrobras operated Mero field offshore Brazil, with the technology expected to move into full commercial production in 2027.

During the summer of 2026, the company will begin environmental baseline monitoring for the Northern Endurance Partnership (NEP) at the U.K.’s first offshore CCS site. The system uses autonomous seabed monitoring landers combining Sonardyne’s Acoustic Doppler Current Profiler (ADCP) technology, environmental sensing technologies, and passive seismic monitoring to verify that captured CO₂ remains safely contained underground.