Q2 2026 results are for Kraken on a stand-alone basis and exclude any contribution from the acquisition of Covelya Group Limited (Covelya Group), which closed subsequent to the quarter on July 2, 2026. Unless otherwise specified, all dollar amounts in this release are denominated in Canadian dollars.
KEY HIGHLIGHTS
- Q2 2026 revenue of $27.3 million and Adjusted EBITDA of $5.0 million.
- New product orders of over $27 million, bringing announced orders in 2026 to $355 million on a combined basis for Kraken and Covelya Group.
- Signed a new long-term Master Supply Agreement (MSA) to deliver subsea batteries to an international conglomerate that is manufacturing extra-large unmanned underwater vehicles (XL-UUVs).
- 2026 guidance, which includes a half-year contribution from Covelya Group, remains unchanged for revenue of $290 million to $320 million and Adjusted EBITDA of $65 million to $75 million.
“Our second quarter and year-to-date results reflect our continued focus on building for long-term growth, supported by recent product orders, an expanding customer base, increased manufacturing capacity and an enhanced organizational structure with several additions to our senior management team,” said Greg Reid, CEO of Kraken Robotics. “The closing of the Covelya Group acquisition early in the third quarter represents a major inflection point for Kraken, significantly expanding our total addressable market and strengthening our position across subsea defense and commercial markets.”
Q2 2026 FINANCIAL HIGHLIGHTS
- Consolidated revenue increased to $27.3 million in Q2 2026, up 4% from $26.4 million in Q2 2025. Results were supported by strong product sales, including the delivery of a KATFISH towed synthetic aperture sonar (SAS) system that will be used by a Navy customer for its minehunting program, as well as modest growth in the subsea services division. Q2 2026 revenue was negatively impacted by a $1.5 million reversal of previously recognized product revenue due to a change in scope associated with an integration project that is nearing its completion and consequent decrease in contract value. Excluding this impact, consolidated revenue would have been $28.8 million, an increase of 9% on a year-over-year basis.
- Product revenue totaled $16.9 million during the quarter, up 2% from $16.5 million in the prior year. Q2 2026 results continued to reflect strong demand for Kraken’s sonar and subsea battery products, which were partially offset by the revenue reversal associated with the change in scope to the integration project mentioned above.
- Service revenue of $10.5 million in Q2 2026 was up 6% from $9.8 million in Q2 2025. Quarterly revenues and year-over-year comparisons can fluctuate significantly due to the timing of projects and seasonality in the offshore services business.
- Gross profit increased to $16.2 million, up 10% from $14.8 million in Q2 2025. The Company’s gross profit margin during the quarter equated to 59%, compared to 56%.
- Adjusted EBITDA of $5.0 million in Q2 2026 was up 7% from $4.7 million in Q2 2025. The Company’s Adjusted EBITDA margin equated to 18%, in line with the prior period. Excluding the impact from the change in scope to the integration project mentioned above, Adjusted EBITDA margins were 20% with Adjusted EBITDA growth of 26% on a year-over-year basis.
- Total assets on June 30, 2026, were $724.7 million, compared to $184.3 million on June 30, 2025. Total assets at the end of Q2 2026 included $396.7 million of subscription receipt proceeds held in escrow from the Company’s March 3, 2026 public offering, which was completed to partially fund the acquisition of Covelya Group, which closed subsequent to the quarter on July 2, 2026.
- Long-term obligations and lease liabilities as at June 30, 2026, were $39.7 million, compared to $37.4 million at the end of Q2 2025. Kraken held cash of $91.3 million as at June 30, 2026, up from $32.9 million at the end of Q2 2025, and working capital of $151.8 million, up from $71.8 million at the end of Q2 2025. The Company continues to maintain a strong balance sheet with minimal net debt post the closing of its acquisition of Covelya Group.
- Capital expenditures and intangible asset purchases totaled $8.9 million in the quarter, compared with $6.3 million in Q2 2025. Spending in the quarter continued to be allocated to new marine assets to support revenue growth and additional tools and equipment related to Kraken’s new subsea power manufacturing facility.
- The Company reported a net loss of $7.5 million in Q2 2026, or ($0.02) per share diluted, compared to a net loss of $0.7 million, or ($0.00) per share diluted, in the comparable quarter in the prior year period. The net loss for the quarter included a provision for probable costs associated with an arbitration proceeding related to a supplier contract entered into in 2017. The Company reported adjusted net income[5] in Q2 2026 of $0.8 million, or $0.00 per share diluted, compared to $1.3 million, or $0.00 per share diluted, in the prior year period.
EXECUTIVE APPOINTMENT
- Kraken is pleased to announce the appointment of Joanne Roberts as Executive Vice President, Systems & Services, a newly created role within the Kraken Robotics operating business announced on July 2, 2026. Joanne previously served as Head of Engineering at Drumgrange, an independent British engineering company specializing in electronics and communications systems for the maritime and land defense and security sectors. Prior to that, she was Vice President of Ultra Maritime and a Systems Engineering Manager at Thales. Starting in October, Joanne will be based in the UK and report to Bernard Mills, President.
NEW PRODUCT ORDERS AND OTHER HIGHLIGHTS
- Since its news release on July 2, 2026, the Company has secured additional product orders totaling over $27 million across a number of technology products including navigation and positioning systems, SAS, monitoring solutions, including its intruder detection system and seabed pressure sensors, and platform sales of its ScanFish remotely operated towed vehicle (ROTV). The company has also delivered a record number of Vigilant Forward Looking Sonars (FLS), which can be integrated on UUVs and unmanned surface vehicles (USVs) for obstacle avoidance. Announced orders in 2026 now total approximately $355 million on a combined basis for Kraken and Covelya Group.
- Kraken recently signed a long-term MSA with a major international conglomerate developing XL-UUVs as part of its autonomous underwater offerings. Under the agreement, Kraken will supply pressure-tolerant subsea batteries, further supporting its growth outlook and broadening its customer base.
- Kraken will be participating in the annual Robotic Experimentation and Prototyping with Maritime Unmanned Systems (REPMUS) exercise in Portugal next month, representing Kraken’s fifth consecutive year supporting REPMUS. The 2025 REPMUS exercise brought together more than 30 nations, 2,000 participants, and 250 autonomous assets to test naval interoperability in realistic operational environments.
OUTLOOK
With the Covelya Group acquisition completed in early July, Q3 2026 will be Kraken’s first quarter of combined results and is expected to mark a significant step change for the business. The Company’s annual financial guidance remains unchanged from the guidance most recently provided on July 2, 2026.
Following this acquisition, the Company’s product portfolio is well positioned to benefit from growth across multiple subsea verticals, including crewed platforms, uncrewed systems, and stationary seabed sensors. Given the dual-use nature of Kraken’s technology, demand for its products is coming from both new and existing defense and commercial customers.
Within defense, Kraken continues to see a strong pipeline of opportunities and growing interest in UUV solutions for mine countermeasures and critical underwater infrastructure. This includes recent demand across North America, Europe, the Middle East, and Asia Pacific. In anticipation of these industry program awards that are gaining momentum, Kraken has been prudently building inventory across its technology offering.
