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Nauticus Robotics, Inc. (KITT)·Q4 2022 Earnings Summary

Executive Summary

  • Q4 2022 revenue was $3.23M, beating internal expectations, with GAAP EPS of -$0.21 and adjusted EPS of -$0.19; total costs and expenses rose to $10.35M as public-company G&A and cost of revenue increased .
  • Versus prior year, revenue fell from $5.35M and GAAP EPS improved from -$1.17; versus Q3, revenue grew slightly from $2.98M, while operating loss widened to -$7.12M .
  • Supply-chain resolution enabled updated delivery timing (Aquanaut/Hydronaut in Q2–Q3 2023) and commissioning to follow; each Nauticus Fleet pair is expected to generate $6–$10M annual revenue as commercial services launch progresses in 2023 .
  • Strategic catalysts include continued progress on DIU programs, successful Shell in‑water demos, and North Sea expansion (Stavanger, Aberdeen), positioning defense and commercial traction into 2023–2024 .

What Went Well and What Went Wrong

  • What Went Well

    • Revenue met and exceeded internal expectations for Q4, reflecting execution despite supply-chain constraints .
    • Defense programs advanced (DIU mine countermeasures), supporting future dual-use monetization and licensing pathways .
    • International expansion initiated with operating bases in Stavanger and Aberdeen to target North Sea offshore opportunities .
    • CEO: “Our continued progress with the DIU and Shell are testimonials of what’s to come as we deploy the most advanced and capable ocean robotic systems in the world.” .

  • What Went Wrong

    • Revenue declined YoY (Q4: $3.23M vs $5.35M prior year) due to timing of revenue recognized on the largest 2021 contract in the prior-year period .
    • Costs elevated: total costs and expenses rose to $10.35M (+$3.59M YoY) on cost of revenue and public-company G&A, compressing profitability .
    • Supply-chain delays pushed fleet deliveries and commercialization ramp; management flagged slides of commercial service revenue into 2024 in prior commentary .

Financial Results

MetricQ4 2021Q3 2022Q4 2022
Revenue ($USD Millions)$5.346 $2.982 $3.228
GAAP EPS ($USD)-$1.17 -$0.67 -$0.21
Adjusted EPS ($USD)-$0.18 -$0.22 -$0.19
Total Costs & Expenses ($USD Millions)$6.761 $9.027 $10.351
Operating Loss ($USD Millions)-$1.415 -$6.046 -$7.123
Net Loss ($USD Millions)-$11.235 -$11.041 -$8.223

KPIs

KPIQ3 2022Q4 2022
Cash & Equivalents ($USD Millions)$35.928 $17.787
Short-term Investments ($USD Millions)N/A$4.959
Cash + Short-term Investments ($USD Millions)N/A$23.0
Working Capital Surplus ($USD Millions)$43.6 $33.1

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Q4 RevenueQ4 2022“A little more than $3M” (CFO, Q3 call) Actual: $3.228M Met/inline
Aquanaut/Hydronaut Delivery Timing20231 unit Jan 2023; 2 by mid‑year; commissioning Q1–Q2; commercialization ramp sliding right Take delivery in Q2–Q3 2023; commissioning to begin shortly thereafter Pushed right; timeline clarified
Commercial Services Launch2023–2024Material commercial service revenue in 2024 vs H2’23 previously “Progress towards the launch of our commercial services this year” (2023) Reaffirm 2023 launch; ramp cautious into 2024
Fleet Pair Annual Revenue PotentialRun-rate$5–$8M per system (RaaS) $6–$10M per fleet pair (Aquanaut + vessel) Range raised
Geographic ExpansionOngoingN/AOperating bases in Stavanger (NO) and Aberdeen (UK) New footprint

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2022)Current Period (Q4 2022)Trend
Supply chain & productionDelays pushed fleet build; deliveries expected Jan and mid‑year; commercialization ramp shifted; Q1 commissioning/Q2 qualification Most issues resolved; delivery in Q2–Q3; commissioning to begin shortly thereafter Improving execution; clearer timeline
Shell engagementSupervised autonomy/tool control via acoustic comms; progressive pilot mid‑2023; strong interest Completed in‑water demonstrations; scoping next phase Advancing from feasibility to pilot execution
Government/DIU programsTwo DIU awards; TerraNova amphibious UxS; ToolKITT licensing opportunity in “hundreds” of ROVs; milestones every ~60 days “Progress continues” on DIU programs (mine countermeasures) Steady progress; validation of dual‑use model
RaaS economics$4–$7M capex/system; $5–$8M annual revenue potential; reduced carbon footprint vs legacy vessels Each fleet pair could generate $6–$10M per year Economics reinforced; revenue potential expanded
Regional strategyFocus: North Sea, Brazil, APAC; Gulf of Mexico Established bases in Stavanger & Aberdeen for North Sea Footprint established in priority region

Management Commentary

  • “Our mission is to improve the way industries operate in the ocean through the use of artificial intelligence.” (CEO Nic Radford) .
  • “We… expect each of its Nauticus Fleet pairs… to have the potential to generate $6–$10 million of revenue per year.” .
  • On commercialization timing: supply-chain delays “push back our entire program… material commercial service revenue in 2024 versus anticipated second half of 2023 previously” .
  • On Shell pilot: “test remote operations using supervised autonomy and tool control… leveraging acoustic communications technology” with mid‑2023 ocean pilot .

Q&A Highlights

  • Revenue productivity of initial Aquanauts: Q1 commissioning and Q2 qualification, with some customer-supported qualification (e.g., Shell), before full revenue contribution .
  • Non-GAAP and adjustments: discussion of warrant liability valuation, earnout share valuation, and one-time merger expenses impacting GAAP loss vs adjusted loss .
  • Inventory vs capex classification: Olympic Arm and fleet build drove inventory in Q3; future fleet units expected to roll into capex as RaaS scales .
  • DIU opportunity set: ToolKITT licensing in “hundreds to mid‑hundreds” of ROVs; dual-use platforms create high-margin recurring software revenue .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2022 EPS and revenue was unavailable at time of request due to S&P Global rate limits. As a result, estimate-based beat/miss analysis cannot be provided. Management noted Q4 revenue “exceeding expectations,” indicating an internal beat versus company expectations .

Key Takeaways for Investors

  • Q4 2022 met internal expectations on revenue ($3.23M) while profitability remained pressured by higher cost of revenue and public-company G&A; watch for operating leverage as fleet deployments commence .
  • Supply-chain normalization and clarified delivery timeline (Q2–Q3 2023) are near-term catalysts; commissioning is slated to start soon after delivery .
  • DIU contracts and ToolKITT licensing pathway provide non-dilutive validation and potential high-margin software revenue streams alongside hardware RaaS .
  • Commercial traction with Shell progressed from feasibility to in‑water demonstrations; next phase scoping underway—monitor mid‑2023 pilot milestones .
  • Expanded footprint in the North Sea (Stavanger/Aberdeen) aligns with targeted offshore wind and O&G IRM opportunities; supports utilization ramp once fleet is commissioned .
  • Fleet economics strengthened: revenue potential raised to $6–$10M per fleet pair; as fleet scales, revenue mix should tilt toward RaaS with improved margins .
  • Near-term trading implications: stock likely sensitive to delivery/commissioning updates and defense milestones; medium-term thesis hinges on converting pipeline into RaaS utilization with cost discipline and execution on software monetization .