Nauticus Robotics, Inc. Q1 FY2026 earnings call

• Seasonal Q1 Performance

  • Q1 2026 saw seasonally softer offshore activity consistent with broader industry winter trends, matching commentary from peer firms including Helix and Oceaneering that also noted lower Q1 utilization and expected stronger H2 2026 activity
  • The company used the slower quarter productively to advance technology development, improve fleet readiness, and position for higher activity in H2 2026

• Technology Development Progress

  • Continued advancing Nauticus Toolkit, the company's proprietary autonomy software platform that enables revenue across services, software licensing, technology-enabled services, and deployment on customer-owned vehicles
  • Completed integration of Nauticus Toolkit across the company's subsea systems, alongside new high-definition cameras and advanced sensors to improve navigation efficiency, data quality, and customer value
  • Aquanaut Vehicle 1, the company's autonomous subsea vehicle, has now completed over 500 hours of in-water testing on client-driven workflows and over 200 successful vertical inspection behaviors on mooring lines, with testing data guiding ongoing software and engineering improvements ahead of full offshore deployment
  • The new mid-range autonomous manipulator for Aquanaut (targeted 50-70kg lift capacity, adjustable 3-7 degrees of freedom) has incoming parts for assembly, with design focused on simplified maintenance and reduced costs compared to competing offerings
  • The company pursues a platform strategy, integrating third-party advanced sensors rather than developing sensors in-house, allowing it to deploy the latest available technology without high in-house R&D costs
  • Made progress on the collaborative project with Forum Energy Technologies around the Olympic arm platform, completing design document reviews in Q1 and expecting to begin collaborative prototype testing in Q2 2026

• Operational Improvements

  • Completed full annual maintenance and refurbishment across multiple ROV systems during the slow Q1 period, bringing the fleet to peak efficiency and reliability ahead of the expected higher-activity operating season

• International Expansion

  • Continued advancing the UAE and broader GCC expansion initiative, with progress on establishing a long-term operational and commercial presence in Ras Al Khaimah, including site selection for operations and engagement with a local marketing agency for regional go-to-market activities
  • Regional geopolitical security issues have limited in-person travel but have not slowed foundational progress, and the company expects the CEO to visit the region in mid-late June 2026 to continue development
  • The GCC region presents strong opportunities across offshore energy, technology licensing, manufacturing support, and strategic partnerships, with particular alignment for government and defense applications that prioritize unmanned systems and remote operations

• Commercial and Leadership Updates

  • Welcomed Brian Allen as new Chief Revenue Officer, who brings nearly 20 years of subsea robotics, autonomy, and commercial leadership experience, with a track record of scaling similar businesses
  • The CRO's core priorities are: converting existing customer interest into revenue across all segments, building out scalable sales and marketing infrastructure efficiently (leveraging AI to automate functions and reduce headcount costs), aligning product development with customer needs, and driving a mix shift toward higher-margin software and recurring revenue
  • The CRO has identified multiple near-term Nauticus Toolkit licensing opportunities and a potential high seven-figure to low eight-figure Aquanaut services tender from his existing industry network to pursue immediately
  • Noted growing momentum for new contracts across both offshore oil and gas and offshore wind, providing revenue diversification as subsea service demand grows across multiple energy markets
  • The company is expanding its focus on the U.S. defense sector, with planned deployment in early June 2026 supporting a large defense contractor, the first work of this type in over a year

Nauticus Robotics reports only consolidated financial results for Q1 2026, with no breakdown of financial performance by individual product or service segment. Total consolidated revenue for the quarter was $0.2 million, which was flat year-over-year compared to Q1 2025 and down $0.9 million sequentially from Q4 2025. Operating expenses totaled $5.8 million, a $0.2 million decrease year-over-year and $0.8 million decrease sequentially. G&A expenses were $3.2 million, a $1.2 million improvement year-over-year, but a $0.6 million increase sequentially due to a non-recurring legal fee credit received in Q4 2025. Reported net loss was $9.3 million, with a $1.7 million increase in net loss year-over-year and a $9.9 million decrease in net loss sequentially, driven largely by changes in fair value of debt instruments. Adjusted net loss was $6.4 million, compared to $10.4 million in Q4 2025 and $6.6 million in Q1 2025. Ending cash balance as of March 31, 2026 was $5.9 million, down from $7.6 million at the end of 2025 due to cash used in operating activities.

• Management expects offshore activity and revenue to strengthen significantly in Q2 and Q3 2026, consistent with historical seasonal trends, with spot and emergency work typically adding 30-40% upside to baseline H2 revenue forecasts based on industry precedent
• Software licensing of Nauticus Toolkit is identified as the fastest near-term path to revenue growth, with commercial conversion expected within a matter of months; long-term, Aquanaut hardware sales are expected to reach high tens of millions in annual revenue within a 2-4 year timeframe
• The primary near-term opportunity in the defense sector is for 2027 and 2028 budgeted contracts, with the company currently positioned well for these opportunities after successful business development; 2026 defense revenue would likely come from emergency spot work or vendor replacement contracts
• Management expects long-term oil prices to remain elevated due to ongoing geopolitical conflict, which will drive continued growth in offshore activity and support Nauticus' revenue opportunities; elevated oil prices are also expected to increase investment in offshore wind, further boosting demand for the company's services
• The company expects to be cash flow self-funding by the end of 2026, with sufficient funding available to support operations through the full year of 2026

• Seasonal demand volatility: Offshore service revenue is heavily exposed to winter weather conditions in the Gulf of Mexico and North America, which creates significant quarterly revenue swings; international expansion and software licensing are strategic initiatives to reduce this exposure, but progress on GCC expansion has been slowed by regional geopolitical conflict
• Geopolitical risk: Ongoing regional conflict in the Middle East has delayed in-person execution of the UAE/GCC expansion, though management notes no loss of momentum to date; geopolitical instability also impacts oil prices and energy sector investment cycles
• Cash burn: The company continues to generate net operating losses and consume cash, with a $5.9 million ending cash balance at the end of Q1 2026; cash collections follow revenue recognition, creating ongoing working capital needs
• Commercial execution risk: Hardware sales and large-scale international partnerships require additional sales infrastructure that is not yet fully in place, creating delays to revenue conversion for these higher-value long-term opportunities
• Market adoption risk: While Nauticus Toolkit and autonomous manipulation technology are differentiated, widespread commercial adoption by incumbent ROV operators is still emerging, with uncertain timing for large-scale market uptake

Q: Q1 revenue was softer than expected, what is your strategy to reduce seasonal revenue swings, and what are the key revenue drivers for H2 2026? / A: The two core strategies to reduce seasonality are growing Nauticus Toolkit software licensing, which generates year-round recurring revenue not tied to offshore weather and operating seasons, and expanding international exposure to offset North American seasonal patterns. The conflict in the Middle East has slowed GCC expansion somewhat but has not reduced momentum, and the CEO expects to visit the region in mid-late June to continue progress. Toolkit is already mature and deployed on third-party platforms, with existing industry interest, so conversion of the pipeline is the near-term focus. For H2 2026, the company expects stronger seasonal activity, with additional upside from unplanned spot and emergency work that typically boosts late-year revenue by 30-40% based on industry precedent. /n/n Q: What efficiency improvements does Nauticus Toolkit provide, and do customers need to upgrade their ROV hardware to run it? / A: Customers need to install additional hardware (typically an inertial navigation system) to run Toolkit, which enables precise vehicle positioning and dynamic positioning control. Manual ROV operation by human pilots results in at least a 20% increase in mission time due to inconsistent pathing and current compensation, while Toolkit automatically optimizes the vehicle's path to maintain a straight line, reducing daily vessel costs by thousands of dollars. Toolkit also delivers more consistent, higher-quality data that requires less post-processing, and frees ROV pilots to focus on high-value inspection tasks rather than vehicle steering. /n/n Q: Where do you expect to have the earliest impact on revenue, and how should investors think about the size and timing of opportunities? / A: The fastest near-term lever for revenue is Nauticus Toolkit software licensing, which can deliver commercial results within months, as the product is complete and there is already existing market interest from third-party ROV operators. Technology-enabled services will grow alongside software as the product is proven in the field, with margin expansion as autonomy replaces vessel and pilot time, and seasonal growth is expected in Q2 and Q3. Aquanaut hardware sales and large international partnerships are longer-term opportunities that require additional sales infrastructure, which will be built out over the next 3-4 months, with high tens of millions in annual revenue expected within 2-4 years. Investors should track leading indicators including pipeline growth, third-party deployment announcements, and framework agreements, which will precede revenue by 6-12 months. /n/n Q: How should investors think about funding runway over the next 2-3 quarters, given the current $5.9 million cash balance and ongoing cash burn? / A: The company expects revenue and collections to pick up in Q2 and Q3 as seasonal activity strengthens. The company will continue to use its at-the-market offering (ATM) lightly and its existing equity line of credit (ELOC) as needed, and has strong support from current lenders, so there is no concern about access to sufficient cash to fund operations through 2026. The long-term goal is to reach cash flow break-even to avoid shareholder dilution, and the company has the funding needed to reach that point by the end of 2026, and to position the business for 2027-2028 growth.