What is their business model and it is sustainable within the next 5-10 years. Is there any concerns of revenue and profits that could drop in the upcoming years.
In advance, thank you for taking the time to answer my question.
NL
Kraken Robotics operates as a marine technology company focused on the design, manufacture, and sale of advanced underwater sensors, batteries, and robotic equipment for both military and commercial applications. Its business model centers on two main revenue streams:
Products Segment: This is the larger portion of Kraken’s revenue. The company designs and manufactures a range of high-tech underwater equipment, including: Sonar and Optical Sensors: Notably, the AquaPix miniature interferometric synthetic aperture sonar (MINSAS), which provides high-resolution seabed imaging.
Underwater Batteries: Such as SeaPower, which are pressure-tolerant deep-sea batteries.
Robotic Systems: Products like the Kraken Active Towed Fish (KATFISH) for seabed mapping, autonomous launch and recovery systems (LARS), and sub-bottom imagers for subsurface imaging.
Electronics and Battery Management Systems: Supporting the operation and integration of underwater vehicles and sensors.
Services Segment: Kraken also provides services, which are a growing part of its business. These include:
Robotics-as-a-Service (RaaS): A cloud-based rental/licensing model that allows customers to access Kraken’s robotic capabilities without the need for large upfront capital investments. Customers can upgrade or downgrade systems as needed and rapidly deploy operations, significantly reducing both capital and operational expenditures.
Data Analytics and Survey Services: Leveraging Kraken’s proprietary artificial intelligence algorithms and cloud-based data analytics, the company offers geophysical and sonar survey services, supporting inspection, repair, and maintenance (IRM) for offshore energy and defense sectors.
Kraken’s business model is designed to capitalize on the increasing demand for underwater robotics in defense, offshore energy, and marine infrastructure markets. By offering both high-margin hardware and recurring service-based revenues, Kraken aims to stabilize its income and provide scalable solutions for customers seeking productivity improvements, risk reduction, and cost savings in challenging underwater environments.
It is a growing market, but there is a long sales cycle. But recent moves to increase defense spending and an acceleration of contract wins implies that business will be sustainable for a while. It is quite hard to predict what will happen to sales and profits for a small, growing company, but revenues are likely to at least double, and EPS will likely triple into 2028. Beyond that, it will depend on contracts and how the company manages its growth.