Kraken Robotics: Record Orders Fail to Lift Shares as Q1 Loss Weighs

Underwater tech firm reports record C$97M backlog and 50% product sales growth, but higher costs swing Q1 to net loss. Shares dip despite strong long-term gain.

Kraken Robotics delivered its first-quarter results on May 28, painting a picture of booming demand and widening losses. The underwater technology specialist has amassed a record order backlog of roughly 97 million Canadian dollars since the start of the year, yet investors focused on the bottom line — the stock dropped more than 5 percent on the day.

Revenue climbed 35 percent year-over-year to 21.7 million dollars in the first three months of 2026. Product sales surged 50 percent, helped by the January acquisition of deep-sea 3D survey specialist 3D at Depth, while service revenue added 14 percent. Despite the top-line growth, Kraken swung to a net loss of 3.3 million dollars from a small profit in the prior-year quarter. Higher administrative costs tied to headcount expansion squeezed margins, with adjusted EBITDA margin slipping from 17 percent to 14 percent.

The investor reaction was swift. In European trading, shares fell 5.1 percent to €4.64, roughly 7.6 percent below their 50-day moving average and 29.4 percent below the 52-week high of €6.57. On a Canadian basis, the stock closed at C$7.80, a decline of 4.88 percent. Still, the equity has more than doubled over the past twelve months, with a year-to-date gain of 16 percent.

Management is counting on a heavy second-half weighting to meet its full-year targets. The standalone 2026 forecast remains unchanged: revenue between 165 million and 175 million dollars, and adjusted EBITDA of 40 million to 50 million dollars. Achieving the midpoint of that guidance implies a full-year adjusted EBITDA margin above 26 percent — a sharp improvement from the 14 percent posted in Q1. The company notes that a back-loaded revenue pattern is consistent with prior years.

The order book provides the ammunition. Product orders announced so far in 2026 total 97 million dollars, up from 87 million as of mid-April, driven by additional contracts for SeaPower underwater batteries and synthetic aperture sonar systems. Meanwhile, Covelya — the Norwegian firm Kraken is acquiring — has itself booked 165 million dollars in product orders for 2026, up from 135 million in April. Kraken expects the acquisition to close toward the end of the second quarter, after which it will issue a combined full-year outlook.

Strategic milestones continue to stack up. After the quarter closed, Kraken participated for the first time in the SeaSEC Challenge Weeks "Data2Sea" exercise, a collaboration among the defense ministries of six NATO countries including Germany, the Netherlands and Finland. The company deployed its SAS and MP-SAS systems on multiple unmanned underwater vehicles, a move that could open procurement doors across the alliance. A new battery factory in Nova Scotia also began production during the quarter, complementing existing European plants and expanding capacity for both small and large UUV platforms.

The balance sheet reflects the scale of the expansion. Total assets swelled to 715.9 million dollars from 179 million a year earlier, largely due to a C$394.5 million equity raise completed in March, the proceeds of which are held in trust to partly finance the Covelya deal. Cash and equivalents stood at 108.7 million dollars, up from 59.3 million, while working capital rose to 162.4 million from 94.6 million. Capital expenditures for the quarter totaled 7.0 million dollars, with full-year capex guided between 15 million and 18 million.

The combined pipeline from Kraken and Covelya now sits at roughly 262 million dollars, underscoring the depth of future revenue. Whether the margin recovery materializes as forecast will determine whether the stock can recapture its early-March 52-week high of C$10.60 (€6.57). For now, the net loss gives skeptics a talking point, but the backlog suggests the second half could tell a very different story.