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Nauticus Robotics, Inc. (KITT)·Q1 2023 Earnings Summary

Executive Summary

  • Q1 2023 revenue was $2.821M, up 26% year over year, but operating loss widened versus Q1 2022 as cost of revenue and public company G&A increased; GAAP net loss was $10.180M ($0.26), while adjusted net loss was $6.764M ($0.17) excluding a Texas sales and use tax assessment and warrant revaluation .
  • Management highlighted commissioning of the first second‑generation Aquanaut and expects initial deployments to the North Sea and Gulf of Mexico in Q4 2023, sustaining the commercialization narrative despite near‑term losses .
  • Liquidity tightened: cash fell to $12.478M and working capital to $25.5M; management reiterated the need for additional capital and potential cost controls to bridge to product commercialization .
  • No formal quantitative guidance was issued; operational milestones (Aquanaut commissioning and Q4 deployments) were reaffirmed. Consensus estimates from S&P Global were unavailable (data access limit), so we cannot classify beat/miss vs Street this quarter.

What Went Well and What Went Wrong

What Went Well

  • Revenue increased 26% YoY to $2.821M, driven by a new contract and higher performance on existing service contracts .
  • Strategic progress: “splashdown and initial commissioning” of the first of three second‑generation Aquanauts—management called it a “watershed moment” ahead of offshore pilots later in 2023 .
  • Defense momentum: advanced phases with the Defense Innovation Unit (DIU) and executed a $2.7M contract extension with Leidos to further develop an Aquanaut‑derived UUV and toolKITT autonomy software .

What Went Wrong

  • GAAP net loss widened to $10.180M from $3.504M YoY, and operating loss grew to $5.824M, reflecting 54% higher cost of revenue and 217% higher G&A tied to scaling and public company costs .
  • Liquidity pressure: cash declined by $5.308M during the quarter; management disclosed potential need for external financing and contemplated cost‑cutting measures to meet obligations .
  • A Texas sales and use tax assessment of ~$1.189M hit other expense; while management plans to contest, it negatively affected reported results .

Financial Results

Core P&L vs Prior Quarters

MetricQ3 2022Q4 2022Q1 2023
Revenue ($USD)$2,981,610 $3,227,825 $2,820,780
Cost of Revenue ($USD)$3,781,224 $3,643,415 $2,932,267
Operating Loss ($USD)$(6,045,830) $(7,122,934) $(5,824,197)
Net Loss ($USD)$(6,083,670) $(8,223,116) $(10,180,020)
EPS (Basic & Diluted) ($)$(0.67) $(0.21) $(0.26)

Non‑GAAP (Adjusted Net Loss)

MetricQ3 2022Q4 2022Q1 2023
Adjusted Net Loss ($USD)$(3,693,597) $(7,725,267) $(6,763,836)
Adjusted EPS ($)$(0.22) $(0.19) $(0.17)

Balance Sheet and Liquidity

MetricQ4 2022Q1 2023
Cash & Cash Equivalents ($USD)$17,787,159 $12,478,433
Working Capital Surplus ($USD)$33.1M $25.5M
Notes Payable – Long‑Term, net of discount ($USD)$15,922,118 $16,829,983

Revenue Mix (Contract Type) – Q1 2023

Contract TypeQ1 2023
Cost Plus Fixed Fee ($USD)$1,949,509
Firm Fixed‑Price ($USD)$871,271
Firm Fixed‑Price – Vehicle Lease ($USD)$0
Total Revenue ($USD)$2,820,780

KPIs

KPIValue
Expected Revenue from Unfulfilled Performance Obligations – Total ($USD M)$8.2
Expected Revenue from Unfulfilled Performance Obligations – 2023 ($USD M)$1.2
Expected Revenue from Unfulfilled Performance Obligations – 2024 ($USD M)$7.0

Note: Consensus estimates from S&P Global for Q1 2023 were unavailable due to a data access limit; no estimate comparison is shown.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Aquanaut/Hydronaut Deployment MilestonesQ4 2023Commissioning expected mid‑2023; pilots to follow (from Q4 2022 update) Initial Aquanauts/Hydronauts expected to be sent to North Sea and Gulf of Mexico in Q4 2023 Maintained operational timeline
Revenue/Margins/OpExFY 2023None formally provided None formally provided Maintained (no formal guidance)

Earnings Call Themes & Trends

(Transcript for Q1 2023 not available; themes reflect press release and 10‑Q for current period)

TopicPrevious Mentions (Q3 2022)Previous Mentions (Q4 2022)Current Period (Q1 2023)Trend
AI/Technology initiatives (toolKITT, Aquanaut)Shell field trials; DIU contracts; Aquanaut production started Nearing production completion; in‑water commissioning to begin; Aquanaut/Hydronaut pairs potential $6–$10M revenue/year Aquanaut splashdown and commissioning; progress with DIU and Leidos; toolKITT enhancements Improving execution
Supply chain/ManufacturingSupply chain issues impacted deployment pace Supply chain issues delayed deliveries; mostly resolved, commissioning to begin Commissioning underway; deployment planned Q4 2023 Improving
Product/Service commercializationActive discussions across markets; pre‑production prototypes Launch of commercial services targeted in 2023 Offshore pilots and deployments targeted Q4 2023 On track
Regional strategyInternational bases in Norway/Scotland North Sea expansion North Sea and Gulf of Mexico deployments expected Expanding footprint
Regulatory/Legal & ControlsPublic company transition —Material weaknesses in controls remain; Texas $1.2M tax assessment Mixed (risk persists)
R&D executionOngoing development —R&D down as technological feasibility achieved; focus on commercialization Transition to commercialization

Management Commentary

  • “We are making notable progress in both our commercial and defense related efforts. The beginning of commissioning exercises for our initial second‑generation Aquanaut marks a watershed moment for Nauticus… Additionally, our continued progress with DIU and Leidos highlights the world‑class capabilities we bring to national security.” — CEO Nicolaus Radford .
  • “Following commissioning, Nauticus expects to send the initial Aquanauts and Hydronauts to the North Sea and the Gulf of Mexico in the fourth quarter of 2023 to support customer initiatives in those regions.” .
  • Leidos extension: “This very important work combines great attributes from each company to deploy a truly novel subsea capability.” — CEO Nicolaus Radford .

Q&A Highlights

  • Q1 2023 earnings call transcript was not available in our document set; no Q&A details to report. We reviewed the full Q1 2023 press release and 10‑Q for management’s current narrative .

Estimates Context

  • We attempted to retrieve Q1 2023 consensus estimates (EPS and revenue) via S&P Global but the data pull hit an access limit; therefore, we cannot provide beat/miss vs Street for Q1 2023 and recommend treating this quarter as “no consensus comparison available.”

Key Takeaways for Investors

  • Commercialization remains the core 2023–2024 catalyst: Aquanaut commissioning is underway with initial deployments targeted for Q4 2023 in the North Sea and Gulf of Mexico—watch for customer pilots converting to recurring RaaS revenue .
  • Defense programs are advancing (DIU phases) and the Leidos $2.7M extension strengthens the UUV/toolKITT stack, supporting medium‑term government revenue visibility .
  • Liquidity is the near‑term risk: cash declined to $12.5M and working capital to $25.5M; management flagged the need for additional capital or cost controls—funding updates are a key stock driver .
  • Cost intensity is high pre‑launch: cost of revenue and G&A drove losses; adjusted results remove warrant revaluation and tax assessment, but path to operating leverage depends on fleet utilization ramp .
  • Revenue quality is services‑heavy (cost‑plus and firm fixed‑price), with $8.2M in unfulfilled performance obligations—monitor conversions and timing into 2023–2024 .
  • Control environment remains a watch item (material weaknesses) and the Texas tax assessment adds regulatory noise; resolution and remediation progress could reduce risk premium .
  • Without Street estimates, tactical trading hinges on program wins, financing milestones, and signs of Q4 deployments staying on schedule—any slippage could pressure shares; on‑time pilots and follow‑on awards likely support sentiment .