Q1 2025 Nauticus Robotics Inc Earnings Call
Good day, ladies and gentlemen, and welcome to America's Robotics, 2025, Q1 earnings Conference call.
Unknown Executive: Good day, ladies and gentlemen, and welcome to the Nauticus Robotics 2025 Q1 Earnings Conference. At this time, all lines are in listen-only mode.
This time, all lines, saying listen only mode. Following the presentation, we will conduct a question and answer session.
Unknown Executive: Following the presentation, we will conduct a question and answer session. Participate, simply press the star and then the number one on your telephone keypad. You will hear a prompt that your hand has withdraw your question, please press the star followed by the number two.
Speaker Change: Participate simpler Braves they start and then the number one on your telephone keypad, you'll hear a prompt at your hand has been a race to withdraw your question. Please press the star followed by the number too.
Unknown Executive: If at any time during this call you require a medical assistance, please press the star and the number zero for the operator.
Speaker Change: If at any time during this call you will require Matt to see sense places they start and then number zero for the operator.
Unknown Executive: This call is being recorded on Thursday, May 15, 2021.
Speaker Change: All of these being recorded on Thursday may 15th 2025.
Kristin Moorman: I would now like to turn the conference over to Kristin Moorman, please go ahead. Thank you and good morning, everyone. Joining me today and participating in the call are John Gibson, CEO and President, Vicki Hay, Interim CFO, and other members of our leadership team. On today's call, we will first provide prepared remarks concerning our financial and operations results. Following that, we will answer questions.
Christian: I'd like to turn the conference over to Christian for me. Please go ahead.
Christian: Thank you and good morning, everyone. Joining me today and participating in the call are John Gibson, CEO and President.
Christian: Vicki Hey, interim CFO and other members of our leadership team.
Christian: On today's call. We will first provide prepared remarks concerning our financial and operations result, following that we will answer questions.
Kristin Moorman: We have now released our results for the first quarter of 2025, which are available on our website. In addition, today's call is being webcast, and a replay will be available on our website shortly following the conclusion of the call.
Christian: We have now released our results for the first quarter of 2025, which are available on our website.
In addition, today's call is being webcast and a replay will be available on our website. Shortly following the conclusion of the call. Please.
Kristin Moorman: Please note that comments we make on today's call regarding projections or our expectations for future events are forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control. These risks and uncertainties can cause actual results to differ materially from our current expectations. We advise listeners to review our earnings release and the risk factors discussed in our filings with the SEC. Also, please refer to the reconciliations provided in our earnings press release as we may discuss non-GAAP metrics on this call.
Christian: Please note that comments, we make on today's call regarding projections or our expectations for future events are forward looking statements.
Forward looking statements are subject to a number of risks and uncertainties many of which are beyond our control.
Christian: These risks and uncertainties can cause actual results to differ materially from our current expectations we advise.
Christian: Listeners to review our earnings release, and the risk factors discussed in our filings with the S. E C.
Christian: Also please refer to the reconciliations provided in our earnings press release, as we May discuss non-GAAP metrics on this call.
John Gibson: I will now turn it over to John. Good morning, and thank you for joining us. Today's call comes at an exciting time for Nauticus Robotics. With the successful acquisition of SeaTrepid in March, we've entered a new chapter marked by operational scale, expanding commercial opportunities and growing demand for our autonomous subsea technology. Over the next few minutes, you're going to hear from our executive team on our first quarter financials, operational progress and our emerging pipeline of offshore work, all pointing to a business gaining momentum and maturing rapidly. While Q1 results reflect the seasonal nature of offshore work and the timing of our acquisition.
Christian: I will now I'll turn it over to John.
John: Good morning, and thank you for joining us todays call comes at an exciting time for nautica should robotics.
John: With the successful acquisition of Ctrip. It in March we've entered a new chapter marked by operational scale expanded commercial opportunities and growing demand for our autonomous subsea technologies over the next few minutes, you're going to hear from our executive team on our first quarter financials operational progress and our emerging pipeline of all.
John: Offshore work, all pointing to a business gaining momentum and maturing rapidly while Q1 results reflect the seasonal nature of offshore work and the timing of our acquisition. The quarter also marked the beginning of our 2025 offshore station and the formal start of our integration efforts.
John Gibson: The quarter also marked the beginning of our 2025 offshore season and the formal start of our integration effort. Early signs are encouraging. We've mobilized equipment security, extended contracts and are seeing enthusiastic interest in our aquanaut platform from both existing and new customers. The conversations have shifted from what if to how soon that signals real traction.
John: Early signs are encouraging we've mobilized equipment secured extended contracts and are seeing enthusiastic interest in our aqua not platform from both existing and new customers. The conversations have shifted from Hawaii to how soon that signal real traction now I'll turn it over the team not a kiss to explain how we have.
John Gibson: Now to turn it over to Team Nauticus to explain how we intend to meet the growing demand for safer, smarter and more sustainable subsea solutions.
John: Tend to meet the growing demand for safer smarter and more sustainable subsea solution.
Vicki Hay: With that, I'm going to hand it to Vicki, our interim CFO. And let her get us started on the financial side for Q1, Vicki. Thank you, John, and good morning.
John: With that I'm going to hand, it to Vicki our interim CFO and let her get US started on the financial side for Q1 Vicky.
Vicki Hey: Thank you John and good morning, I will now discuss our financial results for the first quarter of 2025.
Vicki Hay: I will now discuss our financial results for the first quarter of 2025. The Sea Keppard acquisition closed on March 20th and has so far proved impactful to the organization with revenue being recognized from it in the first quarter and has continued to grow over the past six weeks following the end of the quarter. Other key milestones this quarter included further reducing our debt and associated interest by $3 million as a result of lowering the conversion price of the term loan and subsequent conversions. We also had a $20 million raise from our at-the-market facility to fund the acquisition of Sea Trepid and current-year capital investments and operations.
Vicki Hey: Does he tepid acquisition closed on March 20th So far approved impactful to the organization with revenue being recognized from it in the first quarter and has continued to grow over the past six weeks following the end of the quarter.
Vicki Hey: Other key milestones this quarter included further reducing our debt and associated interest by $3 million as a result of lowering the conversion price of the term loan and subsequent conversion.
Vicki Hey: We also had a $20 million raised from at the market facility to fund the acquisition of Ctrip had current year capital investments and operations.
Vicki Hey: Revenue for the first quarter was not point $2 million, which is down <unk> 3 million sequentially and down not point $3 million from the same quarter last year.
Vicki Hay: Revenue for the first quarter was $0.2 million, which is down $0.3 million sequentially, and down $0.3 million from the same quarter last year. The Gulf of America offshore season just kicked off at the end of March and we are now under contract. Operating expenses for the quarter were $6 million, which is flat from Q1 2024, and down $0.5 million sequentially. The G&A costs for the quarter were $4.3 million, which is an improvement of $0.9 million compared to Q1 2024. Sequentially, G&A has increased $0.4 million due to non-recurring professional fees in Q1 2025, primarily related to the acquisition of Ctrepid, which included preparing financials for a two-year audit that was needed as part of the transaction, and other professional fees related to the restatement of 2024 quarterly financials that was completed in early April.
Vicki Hey: It goes to the America off shall season, just kicked off at the end of March and we are now under contract.
Vicki Hey: Operating expenses for the quarter was $6 million, which is flat from Q1, 2024, and does not point $5 million sequentially.
Vicki Hey: G&A costs for the quarter.
Vicki Hey: With $4 $3 million, which is an improvement of $9 million compared to Q1 2024.
Vicki Hey: Sequentially G&A has increased not quite $4 million due to nonrecurring professional fees in Q1 2025, primarily related to the acquisition of C. Trepid, which included preparing find out chose for two year all that was needed as part of the transaction and other professional fees related to the restatement of 2024 quarterly.
Find out chose that was completed in early April.
Vicki Hey: Net loss for the quarter was $7 $6 million. This is a $76 $9 million decrease in net loss sequentially under $65 3 million decrease from the net loss in Q1 'twenty to 'twenty four.
Vicki Hay: Net loss for the quarter was $7.6 million. This is a $76.9 million decrease in net loss sequentially, and a $65.3 million decrease from the net loss in Q1 2024. So this large variance is attributable to the loss on extinguishment of debt recognized in 2024. Adjusted net loss for the quarter was $6.8 million, compared to $6.9 million for the fourth quarter of 2024. When removing the non-repeat professional fees that occurred in Q1 2025, there would have been an improvement sequentially of $1.1 million quarter on quarter. Cash at the end of Q1'25 was $10.1 million, compared to $1.2 million at the end of Q1'24.
Vicki Hey: So this large variance is attributable to the loss on extinguishment of debt recognized in 2024.
Vicki Hey: Adjusted net loss for the quarter was $6 $8 million compared to $6 $9 million for the fourth quarter of 'twenty four.
Vicki Hey: When removing the non repeat professional fees that occurred in Q1 2025 that would have been an improvement sequentially of one 1 million quarter on quarter.
Vicki Hey: Cash at the end of Q1, 'twenty five was $10 $1 million compared to $1.2 million at the end of 'twenty four.
Vicki Hey: This is primarily a result of funding received through the aftermarket offering offset by the recent acquisition of Ctrip. It on cash used in operations.
Vicki Hay: This is primarily a result of funding received through the at-the-market offering offset by the recent acquisition of C-TREPID and cash used in operation.
Vicki Hey: But the second quarter already well underway. We are excited about having a full quarter of operational revenue to report for the first time in Q2, while continuing to keep a strong focus on cost control and value added activities.
Vicki Hay: With the second quarter already well underway, we are excited about having a full quarter of operational revenue to report for the first time in Q2 while continuing to keep a strong focus on cost control and value added activities.
John Gibson: I will now pass the call back to John.
Vicki Hey: I will now pass the call back to Jonathan.
Jonathan: Well. Thank you Vicky I, just really think Vicki on the finance team for doing an incredible job at 70 C companies file a 10-Q and then just a few weeks later, followed 10-K and our the restatement caused a delay in getting everything done it so they've been really hard at it and did an outstanding job.
John Gibson: Well, thank you, Vicki. I just I want to really thank Vicki and the finance team for doing an incredible job at selling DC companies file a 10 Q and then just a few weeks later file a 10 K. And the restatement caused a delay and getting everything done. And so they've been really hard at it and did an outstanding job.
John Gibson: And I'm excited that we're shifting from focus on reporting here to focus on executing in the field. And so it's it's a it's a welcome to change for us.
Jonathan: And I'm excited that we're shifting from focus on reporting here to focus on executing in the field and so it's it's a.
Speaker Change: Welcome to change for us and I'd like to turn it over to Daniel Deckard, Our field operations leader, Steve Walsh, our sales leap.
Daniel Deckard: And I'd like to turn it over to Daniel Deckard, our field operations lead and Steve Walsh, our sales lead to discuss the emergence of Nauticus first backlog of offshore commercial work. Daniel. Thank you, John. I'm excited to provide an update on our current operations. We recently completed a mobilization of one of our Comanche ROVs on board a vessel and we are currently on hire completing a platform inspection off the Gulf Coast. The expansion is expected and continues to expand the commercial forecast for our company. We will mobilize the Aquanaut vehicle once the ROV completes its inspection job in the coming weeks, and then the vessel will roll right into multiple scheduled inspection jobs.
Steve Walsh: Yes, the emergence of Nordic is first backlog of offshore commercial work Daniel Thank you John I'm excited to provide an update on our current operations. We recently completed a mobilization of one of our Comanche Rovs on board a vessel and we are currently on higher completing a platform inspection off the Gulf coast the integration.
Steve Walsh: [noise] of Ctrip and <unk> operations teams has gone better than expected and continues to expand the commercial forecast for our company.
Steve Walsh: We will mobilize the awkward at vehicle once the <unk> completes its inspection job in the coming weeks and then the vessel will roll right into multiple scheduled inspection jobs.
Daniel Deckard: We will continue to execute our existing contracts and will utilize any idle time between these projects to complete our 3,000 meter test with the Aquanaut vehicle. We have now reached a phase of our company that will become a new norm, scheduling current contracts and new opportunities to maximize utilization and margins, and continue to diversify our customer base throughout the season. Our goal is to continue to provide autonomy throughout the industry, utilizing our combined services with the Aquanauts system in ROV. We are currently negotiating contracts with multiple new customers that are excited about the benefits autonomy can bring to their subsea operations.
Steve Walsh: We will continue to execute our existing contracts and will utilize any idle time between these projects to complete our 3000 metered test with the awkward I vehicle.
Steve Walsh: We have now reached a phase of our company that will become a new norm scheduling current contracts and new opportunities to maximize utilization and margins and continue to diversify our customer base throughout the season.
Steve Walsh: Our goal is to continue to provide autonomy throughout the industry utilizing our combined services with the <unk> system. In Rovs were currently negotiating contracts with multiple new customers that are excited about the benefits of autonomy can bring to their subsea operations.
Daniel Deckard: After significant discussions with our current clients, our technology has the potential to extremely decrease the environmental footprint of offshore operations, utilizing an autonomous service vessel, or ASV. We will progress these discussions into funded testing opportunities this summer that include pairing the second Aquanaut vehicle with an ASV. Our current clients see extreme value in this operation by completing inspection work without the use of a large vessel, eliminating personnel from dangerous offshore environments, and reducing the CO2 footprint exponentially.
Steve Walsh: After significant discussions with our current clients our technology has the potential to extremely decrease the environmental footprint of offshore operations utilizing an autonomous surface vessel or ASB.
Steve Walsh: We will progress these discussions into funded testing opportunities. This summer that includes pairing the second aquanaut vehicle with an ASB.
Steve Walsh: Current clients see extreme value in this operation by completing inspection work without the use of a large vessel eliminating personnel from dangerous offshore environment and reducing the cotwo footprint exponentially with that I'll now turn it over to Steve for an update on our 2025 offshore commercial pipeline.
Steve Walsh: With that, I'll now turn it over to Steve for an update on our 2025 Offshore Commercial Pipeline.
Steve Walsh: Thanks, Daniel and good morning, everyone I'm, Steve Walsh, Vice President of sales at Nautica is robotics.
Steve Walsh: Thanks, Daniel.
Steve Walsh: And good morning, everyone. I'm Steve Walsh, Vice President of Sales at Nauticus Robotics. I officially joined the team on March 21 through the Ctrepid acquisition, and it's been full throttle from day one. Let me tell you, the momentum here isn't just buzz, it's real. It's growing and it's translating directly into opportunity. The offshore energy market is surging now and Nauticus is right at the center of it. We're actively supporting oil and gas operations while making serious inroads into emerging sectors. What's driving this? A clear industry shift towards smarter, safer, lower emissions propelled by autonomous solutions.
Actually joined the team on March 20, <unk> through the Ctrip with acquisition and it's been full throttle from day one.
Steve Walsh: Let me tell you the momentum here isn't just buzz, it's real it's growing and it's translating directly into opportunity.
Steve Walsh: Sure Energy market is surging now and Nautica is right at the center of it we're actively supporting oil and gas operations, while making serious inroads into emerging sectors.
Steve Walsh: What's driving this a clear industry shift for smarter safer lower emissions propelled by autonomous solutions and that's exactly what we deliver.
Steve Walsh: And that's exactly what we deliver. The response from customers since the merger has been overwhelmingly positive. Combining Ctrepid's operational legacy with Nauticus's next gen tech has created a powerful offering. Technologies like the Aquanaut aren't just impressing people, they're changing the conversation. Operators are now thinking differently about risk, efficiency, and how robotics can reshape offshore operations. There's a strong appetite to remove personnel from hazardous environments and Aquanaut is opening the doors that weren't available before. Since the acquisition, we've been hard at work transferring CTREPID's existing master service agreements into the new Nauticus framework, while also signing new MSAs with major industry players.
Steve Walsh: The response from customers since the merger has been overwhelmingly positive combining ctrip its operational legacy with Nautica says next Gen Tech has created a powerful offering technologies like the aquanaut arent just impressing people theyre changing the conversation operators are now thinking differently about risk.
Steve Walsh: Efficiency and how robotics can reshape offshore operations. There is a strong appetite to remove personnel from hazardous environments and ocwen is opening the doors that weren't weren't available before so.
Steve Walsh: Since the acquisition, we've been hard at work transferring Ctrip its existing Master service agreements entered the new Nordic as framework, while also signing new Msas with major industry players, that's a clear signal of confidence from the market and what we're building.
Steve Walsh: That's a clear signal of confidence from the market in what we're building.
Steve Walsh: And here's the key point. Demand isn't our bottleneck, scaling is. Right now, the only thing holding back revenue acceleration is equipment and personnel capacity. That's a high-quality problem and we're tackling it aggressively with smart investments and a laser focus on execution. We're also honing our sales strategy around high impact sectors like deepwater energy, offshore infrastructure and defense areas where our expanded portfolio truly stands out.
Steve Walsh: And here's the key point demand isn't our bottleneck scaling is right now the only thing holding back revenue acceleration is equipment and personnel capacity, that's a high quality problem and we're tackling tackling it aggressively with smart investments and a laser focus on execution.
Steve Walsh: We're also honing our sales strategy around high impact sectors, like deepwater energy offshore infrastructure and defense areas, where our expanded portfolio truly stands out.
Steve Walsh: To wrap it up, the market is ready for the future we're building. Our pipeline is growing, our technology is gaining traction, and our customers are leaning in. It's an incredibly exciting time at Nauticus and this is just the beginning. We're working toward the shift from selling to order taking.
Steve Walsh: To wrap it up the market is ready for the future. We're building our pipeline is growing our technology is gaining traction and our customers are leaning in.
John: Incredibly exciting time at <unk> and this is just the beginning we're working toward the shift from selling to order, taking and with that I will turn it back over to you John.
John Gibson: And with that, I'll turn it back over to you, John. I appreciate that, Steve.
John: Hey, Steve.
John Gibson: You know, we made a big shift here from last year to this year. We've really gotten a lot of customer diversification here and have reduced our customer concentration. The number of calls coming in are exciting because it looks as though we can continue to diversify our customer base. And so, exciting times for us. I mean, it's a great market. really like the equipment we have.
Steve Walsh: Hum.
Steve Walsh: We.
Steve Walsh: It made a big shift here from last year to this year, we've really gotten a lot of customer diversification here and it produced for customer concentration.
Steve Walsh: The number of calls coming in are exciting because it looks as though we can continue to diversify our customer base.
Steve Walsh: Base, so exciting task force.
Steve Walsh: Rate market and.
Steve Walsh: Yes.
Steve Walsh: Really like the equipment, we have I do want to introduce to you.
John Gibson: I do want to introduce to you Amin and to really sort of talk about our equipment and Jason Close our software lead. And so that you can get some updates from their departments where you could you could see what what's going on in the in the belly of the beast.
Steve Walsh: Our main.
Steve Walsh: And.
Steve Walsh: Yeah.
Steve Walsh: And it.
Steve Walsh: Really sort of talk about our equipment and Jason close our software leaf.
John: And so that you can get some updates from their departments, where you could you could see what what's going on in the in the belly of the Beast, So with that I'll turn it over to you guys. Thanks John.
Jason Close: So with that, I'll turn it over to you guys. Thanks, John. Working with Ctrepid over the past few months has expanded our market reach and introduced us to a wider range of customers and prospects, helping us refine our value proposition and better respond to industry-wide demand. In the first quarter, we made meaningful progress advancing Toolkit across both our primary product lines. Aquanaut and Toolkit enabled work-class ROV. For Aquanaut, our efforts were centered on releasing the latest version of Toolkit in support of commercial operations for the remainder of the year. Parallel, we continue developing capabilities for a near term field deployment.
Speaker Change: Working with Ctrip it over the past few months has expanded our market reach and introduced us to a wider range of customers and prospects, helping us refine our value proposition and better respond to industry wide needs.
Speaker Change: In the first quarter, we made meaningful progress advancing toolkit across both of our primary product line Aquanaut and tool kit enabled work class Rovs for Aquanaut. Our efforts were centered on releasing their latest version of toolkit in support of commercial operations for the remainder of the year.
Speaker Change: In parallel we continued developing capabilities around near term field deployment.
Jason Close: and established a structured program for 2025 to broaden Aquanaut's operational envelope and further expand supervised autonomy across the subs. We also reached an important milestone in the development of toolkit for work class RO. Following early on vehicle integration and a rigorous round of hardware in the loop testing toolkit is now prepared for tool trials as the final step towards our first commercial. Strong demand for this capability and expect to integrate Toolkit onto our own ROV fleet in the near future as part of this initial commercial... That said, our assets remain heavily engaged in offshore work reflecting the growing customer activity we're seeing across As we move through the year, we're focused on delivering value through Aquanaut operations while preparing Toolkit for broader field adoption, setting the stage for long-term growth across both our service and product offerings.
Speaker Change: And established a structured program for 2025 to broaden aquanauts operational envelope and further expand supervised autonomy across the subsea industry.
Speaker Change: We also reached an important milestone in the development of toolkit for work class Rovs.
Speaker Change: Showing early on vehicle integration and a rigorous round of hardware in the loop testing toolkit is now prepared for field trials as a final step towards our first commercial deployment.
Speaker Change: We see strong demand for this capability and expect to integrate toolkit onto our own our own fleet in the near future as part of this initial commercial release.
Speaker Change: That said our assets remain heavily engaged in offshore work, reflecting the growing customer activity, we're seeing across the business.
Speaker Change: As we move through the year, we're focused on delivering value through Arpanet operations, while preparing toolkit for broader field adoption setting the stage for long term growth across both our service and product offerings.
Amin: I'll now hand it over to Amin for an update on Aquanaut and our electric manipulator. Thank you, Jason. The engineering team is collaborating closely with the operation and software teams to maximize uptime across both aquanaut vehicles. This joint effort ensures consistent, reliable performance throughout the year with minimal operational disruption.
Speaker Change: I'll now hand, it over to <unk> for an update on off were not in our electric manipulators.
Speaker Change: Jason Engineering team is collaborating closely with the operation and software teams to maximize uptime across both via Auckland out vehicles. This.
Speaker Change: This joint effort ensures consistent reliable performance throughout the year with minimal operational disruption.
Amin: The engineering team has been transitioning from a traditionally R&D-focused approach to a commercially-driven development model. This shift is essential for enabling scalable growth and aligning our capabilities with evolving market demands. For Aquanaut, design improvements are being implemented to boost vehicle reliability and reduce the maintenance cycle. These upgrades are critical in transitioning Aquanaut into a robust and reliable platform that can meet rigorous field demands. In tandem with our design improvements, the team is enhancing our design documentation and validation protocols to streamline assembly and support reliable maintenance and service.
The engineering team has been transitioning from a traditionally R&D focused approach to a commercially driven development model.
Speaker Change: This shift is essential for enabling scalable growth and aligning our capabilities with evolving market demand.
Speaker Change: For Aqua not design improvements are being implemented to boost vehicle reliability and reduce the maintenance cycle. These upgrades are critical and transitioning to Auckland out into a robust and reliable platform that can meet rigorous field demand.
Speaker Change: In tandem with our design improvements the team is enhancing our design documentation and validation protocols to streamline assembly and support reliable maintenance and servicing.
Amin: Looking ahead, we are developing a capital deployment strategy and actively seeking manufacturing partnerships to scale production of the next Aquanaut fleet in alignment with anticipated market demand. With the manipulators, we are making steady progress on the design of our next generation fully electric autonomous manipulator. This system is intended for integration not only with Apronaut, but also with WorkClass ROV, expanding our product capabilities and market applications.
Speaker Change: Looking ahead, we are developing our capital deployment strategy and actively seeking manufacturing partnerships to scale production of the next ocwen out fleet and alignment with anticipated market demand.
Speaker Change: With the manipulators, we are making steady progress on the design of our next generation fully electric autonomous manipulator. This system is intended for integration not only with <unk>, but also with work class rovs, expanding our product capabilities and market application.
John Gibson: I'll now hand the call back to John. Thank you, May. Thank you, Jason.
John: I'll now hand, the call back to John.
John: Thank you Manny and thank you Jason.
John Gibson: As you've heard throughout this call, Nauticus Robotics is entering a period of significant opportunity. The integration of C-TREPID has not only expanded our operational capacity, it's unlocked meaningful customer relationships and accelerated the deployment of our technology, though we are trying to stay disciplined and balanced upgrading equipment and with getting revenue. And so we will bring it in and make changes as long as it doesn't interrupt the revenue. We're now seeing real traction in the market with a growing backlog, expanding pipeline, and a clear demand for autonomous solutions that improve safety, lower costs, and reduce environmental impact.
John: You've heard throughout this call a lot of catch robotics is entering a period of significant opportunity there.
The integration of sea Trepid has not only expanded our operational capacity gets unlocked meaningful customer relationship and accelerated the deployment of our technology, though we are trying to stay disciplined and balanced upgrading equipment with <unk>.
John: Getting revenue and so we will bring it in and make changes as long as it doesn't interrupt the revenue we're now seeing real traction in the market with a growing backlog expanding pipeline and a clear demand for autonomous solutions that improve safety lower costs and reduced environmental impact.
John Gibson: Our focus moving forward is clear. It's execute with precision, scale with discipline, and deliver on the promise of autonomy and subsea operation. confident in the team and the strategy and the momentum we're building.
John: Our focus moving forward is clear, it's execute precision scale with discipline to deliver on the promise of autonomy and subsea operations, we're confident in the team and the strategy and the momentum we're building and we believe 2025 is shaping up to be a transformative year for <unk> stakeholders. So it really does feel like.
John Gibson: And we believe 2025 is shaping up to be a transformative year for Nauticus and the stakeholders. It really does feel like we've made it through the inflection point.
John: We've made it through the inflection point and with that I'll turn it back over to the operator, and we'll take any questions that are normalized.
Unknown Executive: And with that, I'll turn it back over to the operator and we'll take any questions that are on the line. Thank you.
John: <unk>.
Speaker Change: Thank you ladies and gentlemen, we will now begin the question and answer session should you have a question. Please for the star followed by the number two sorry.
Unknown Executive: Ladies and gentlemen, we'll now begin the question and answer session. Should you have a question, please press the star followed by the number two, sorry, the number one on your touchtone phone, you'll hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the number If you are using a speakerphone, please lift the handset before pressing any button.
Speaker Change: Number one are you touched on the phone you'll hear a prompt that your hand Hasnt race should you wish to a claim from the buying process. Please press the star followed by the number two if you're already seeing a speaker phone. Please lift the handset before pressing any keys one moment. Please for your first question.
Unknown Executive: One moment, please, for your first.
Speaker Change: Your first question comes from Kunal <unk> from our research. Please go ahead.
Kunal Madhukar: Your first question comes from Kunal Madhukar from Water Tower Research. Please go ahead. Hi, thank you for taking the questions. Two, if I could, one on the on the broader oil and gas industry with oil prices kind of declining. What are you seeing in terms of consumer demand and or the, you know, the demand for your vehicles? How is that changing?
Speaker Change: Alright, Thank you for taking the questions two if I could one on the on the broader oil and gas industry.
Speaker Change: Oil prices kind of declining.
Speaker Change: What are you seeing in terms of consumer demand and on the.
Speaker Change: The demand for your vehicles.
Speaker Change: That change it.
Speaker Change: Well canola.
John Gibson: Well, can all appreciate you joining the call and asking a question. It's it's interesting for the larger Clients that have established bases at higher price points, I think that declining oil and gas price is going to be more difficult. For us, it really gives us an opportunity to displace incumbents and change the market because they're going to be looking for more efficient solutions that are more cost effective. And so I think it opens up conversations for us. I'm glad to see oil prices come down. I think it stimulates the economy, stimulation of the economy stimulates energy demand, it's sort of an interesting combination.
Speaker Change: Joining the call and asking a question.
Speaker Change: It's interesting.
Speaker Change: For the larger.
Speaker Change: Clients should have established bases.
Speaker Change: At higher price points, I think that the decline in oil and gas price is going to be more difficult for us. It really gives us an opportunity to displace incumbents and changed the market because theyre going to be looking for more efficient solutions that are more cost effective and so I think it opens up conversations for us.
Speaker Change: Uh huh.
Speaker Change: Glad to see oil prices come down I think it stimulates the economy.
Speaker Change: Stimulation of the economy statements, which energy demand as sort of an interesting.
Speaker Change: Combination, but for US I think where we are at least 20% to 25% below the current price point show the alternatives.
John Gibson: But for us, I think we're at least 20 to 25% below the current price points of the alternatives and with as good or better margins. And so I think it gives us a great opportunity to knock on doors. And what's happening now in the market is I think they'll start knocking on our doors if the pressure increases on them as prices go down. So I'd probably be in favor of a little bit further decline in order to help accelerate our business. That that's a very interesting view.
Speaker Change: And with <unk>.
Speaker Change: Good or better margins and so I think it gives us a great opportunity to knock on doors and what's happening now in the market is I think thats part knocking on our doors, if the pressure increases all of them as prices go down so.
Speaker Change: I'd probably be in favor of a little bit further decline in order to help accelerate our business.
Speaker Change: That's a very interesting view.
Kunal Madhukar: And then, you know, again, you talked about how The season really has the offshore season hasn't really started when we when we looking at 1Q revenue.
Speaker Change: And then.
Speaker Change: You talked about how.
Speaker Change: The season really had the offshore it sees them hasn't really started then we wouldn't be looking at <unk> revenue numbers. So last quarter. When you reported your results you talked about like about 16 million in revenue as the outlook you had kind of provided for 2020 fives. So help us bridge.
Kunal Madhukar: So last quarter, when you were reporting poll queue results, you had talked about like about 16 million in revenue is the outlook you had kind of provided for 2025. So help us bridge the.
Speaker Change: The.
John Gibson: The revenue from 1Q25 to the full year revenue outlook that you have kind of provided. Well, this is a great question, Kunal. And it's the fundamental reason I should never give forward looking statements, because then you have to go back in there and explain them. We actually have a tremendous pipeline. And we have proposals being generated that that cover the 16 million, you know, better than three fourths of the pipeline is day rate type work, where we, you know, you can look at the amount of equipment we have, what our day rate is, and you can go create a model for it.
Speaker Change: The revenue from <unk> 25 to the full year revenue outlook that you have kind of provided.
Speaker Change: Well this is.
Speaker Change: It's a great question can all of this is the fundamental reason that should never give forward looking statements. Because then you have to go back in there and explain them.
Speaker Change: We actually have a tremendous pipeline.
Speaker Change: And we have proposals being generated that cover the $60 million.
Speaker Change: Better than three fourths of the pipeline is.
Speaker Change: Day rate type work, where we can take a look at the amount of equipment. We have water day rate is and you can go create a model for it.
John Gibson: And pretty easy. But we still have about a quarter of the 16 million that is tied up and doing software sales and other proposals with regard to both defense and the advancement of our technology that is yet to close. And so if you when you start doing the model, we have work to do. And so we are hard at it. Our sales teams talking to customers every day, we've got proposals that are being generated. And it's you're going to see a couple of lumpy things that are mixed in next quarter with what the day rates bring in so that you can do a pretty simple model there and then add in the the lumpy proposals that are associated with with other activities.
Speaker Change: Pretty easy, but we still have about a quarter of the 16 million that is tied up.
Speaker Change: Doing software sales and other proposals with regard to both defense and the advancement of our technology the.
Speaker Change: That is yet to close and so when you start doing the model.
Speaker Change: We have work to do and so we are hard at it our sales team is talking to customers every day, we've got proposals that are being generated and.
Speaker Change: Youre going to see a couple of lumpy things that are mixed and next quarter with what the day rates bring yet so that you can do a pretty simple model there and then.
Speaker Change: The lumpy proposals that are.
Speaker Change: Associated with the with other activities and I think.
John Gibson: And I think, you know, I still feel like we're going to have a tremendous year it is an inflection point and we're going to deliver good good results compared year over year. Great.
Speaker Change: I still feel like we're going to have a tremendous share it as an inflection point and we're going to deliver good results compared year over year.
Speaker Change: Great and then as a follow.
John Gibson: As a follow-up, John, if I could... you last quarter you talked about like 40 to 60,000 in day rate. Is that so times 90 is how we should kind of look at 2Q revenue as a base. You know, I really like that $50,000 price point, but it is dependent upon several things, the size of the boat we're using, the use of the ROV, the use of the Aquanaut. And it's also, I mean, unfortunately, as you pointed out, the oil price market, the guys with all the heavy assets that have the much higher price points in down markets, they'll discount.
John: John if I could.
Speaker Change: Yeah.
Speaker Change: Last quarter, you talked about like 40 to 60000 in Dayrates.
Speaker Change: Is that so times 90 is how we should kind of look at <unk> revenue as the base case.
Speaker Change: Yeah.
Speaker Change: I really like that $50000 price point, because but it is dependent upon several things the size of the boat where you're using.
Speaker Change: They usually are a way to use the <unk> and it's also I mean.
Speaker Change: Unfortunately, as you pointed out the oil price market the gas with all of the heavy assets that have been much higher price points.
Speaker Change: Down market still discount and so we could come under some discounting pressure as a result of doing that we have the margin in place to be able to always be.
John Gibson: And so we could come under some discounting pressure as a result of doing that. We have the margin in place to be able to always be ahead of those guys, they'd have to lose quite a lot of money to get to our price point. And so I think, you know, we could see some pressure on pricing, but I don't think it'll be very much. And we can hold pricing for a long time, maybe through the whole of the year, without having any impact whatsoever. With them lowering their pricing, it'll take them a while to get down to us.
Speaker Change: Those guys I'd have to lose quite a lot of money to get our price point and so.
Speaker Change: So I think.
Speaker Change: We could see some.
Speaker Change: Some pressure on pricing, but I don't think it'll be very much and we can hold pricing for a long time, maybe through the whole of the year without having any impact whatsoever.
With them lowering their pricing it'll take them, a while to get down to us.
John Gibson: So I think we're in pretty good shape on the pricing, but I think $50,000 is a good number.
Speaker Change: So it's weird.
Speaker Change: I think we're in pretty good shape.
Speaker Change: The pricing, but I think 50000 should good number, but thats going to vary and its a question that should be asked every quarter, because it's going to depend upon.
John Gibson: But that's going to vary, and it's a question that should be asked every quarter because it's going to depend upon, you know, hurricanes, it's going to depend upon boat availability, it's going to depend upon competitive pressures from the likes of, you know, oceaneering and CI and others. And so we just have to monitor the market.
Speaker Change: Hurricanes, it's kind of dependent upon boat availability is kind of dependent upon competitive pressures from from the likes of oceaneering in Ci and <unk>.
Speaker Change: Others, and so we just monitor the market.
Speaker Change: Great. Thank you so much.
Unknown Executive: Great.
Unknown Executive: Thank you so much.
Speaker Change: You're welcome.
Unknown Executive: You're welcome.
Speaker Change: Thank you.
Unknown Executive: Thank Ladies and gentlemen, as a reminder, should you have a question, please press the star followed by the number one. your telephone keypad.
Speaker Change: Ladies and gentlemen, as a reminder, should you have a question. Please press star followed by number one.
Speaker Change: Your telephone keypad.
Speaker Change: Your next question comes from Robert Mains Rolla.
Robert Mandrella: Your next question comes from Robert Mandrella, an individual investor, please go ahead. Good morning. Thank you for the update. The question, yes, I appreciate the color on the revenue for this year of being around 16 million. It was a smart pivot, definitely earlier this year with Ctrep. And the question I have is, how confident are you with the 16 million this year? And then what is the breakdown on, you know, I, the... software, the command center, I think is is very crucial. What do you think the revenue will be over the next year or two with you know, the software sales.
Speaker Change: <unk> Investor. Please go ahead.
Speaker Change: Good morning, Thank you for the update the question, yes it.
<unk> the color on the.
Speaker Change: Revenue for this year being around $16 million.
Speaker Change: It was a smart pivot definitely earlier this year with Ctrip it.
Speaker Change: And the question I have is how confident are you with the $16 million. This year and then what is the breakdown.
Speaker Change: The.
Speaker Change: Software Command Center I think is very crucial what do you think the revenue will be over the next year or two with this.
Speaker Change: The software sales.
Speaker Change:
John Gibson: Excellent questions. Appreciate you dialing in.
Speaker Change: Yes excellent questions I appreciate you.
John Gibson: And so on the 16 million, all the reason I made a statement earlier, I ain't giving forward looking information, you never know what the market's going to do or how your equipment's going to perform. But you know, we what we're doing is trying to make sure we manage a budget and, and manage our activities. And so we have to have something that we plan towards. And so that that's current planning horizon. So we went ahead and prepared it.
Speaker Change: Dollar yen and so on the 16 million Oh.
Speaker Change: <unk> statement earlier, I hate, giving forward looking information you'd never know what the market's going to do or how your equipment is going to perform.
Speaker Change: What we're doing is trying to make sure we manage a budget and.
Speaker Change: And manage our activities and so we have to have something that would plant torch and so that's the current planning horizon. So we went ahead and shared it okay. So how does that breakdown.
John Gibson: Okay, so how does that break down? As I said a moment ago, about three fourths of it are going to fall into the utilization of current assets. And about a quarter of it's going to fall over into software sales and proposals to advance solutions that are of high interest to our customers, both in the oil and gas, potentially in wind, as well as in the defense sector. We've got some pretty exciting opportunities in working on non boat driven solutions. If you think about taking the real cost down in this industry is if we can deploy a USB with an aquanaut, no boat whatsoever, if we can deploy from the bank for nearshore fields and go out and come back without having any boat whatsoever, completely autonomous, best solution ever, you don't have to worry about the launch and recovery of the vehicle, etc.
Speaker Change: As I said, a moment ago about three fourths of it are going to fall into utilization of current assets and about a quarter of it is going to fall over into software sales and proposals to advanced solutions that are off.
Speaker Change: High interest to our customers both in the oil and gas potentially in wind as well as in the defense sector.
Speaker Change: We've got some pretty exciting opportunities.
Speaker Change: And working on non boat driven solutions, if you think about taking the real cost down.
Speaker Change: And this industry is if we can deploy.
Speaker Change: <unk> with an awkward not no vote.
Speaker Change: Whatsoever, if we can deploy from the bag for nearshore fails and go out and come back without having any boat whatsoever completely autonomous.
Speaker Change: Best solution ever you don't have to worry about the launch and recovery of the vehicle et cetera. So we think there are some proposals to advance that that we are working jointly with partners out.
John Gibson: So we think there's some proposals to advance that, that we are working jointly with partners on that, that have real upside opportunity, because that's how you get cost out of the market and let our customers continue to make margin at lower oil and gas prices is they have to continue to work on what their day rates are. So there's the that movement towards full autonomy, we are extremely advanced in that compared to any other firm, there's no competitor that is looking at doing it the way that we are. And I think that's going to be something that picks up momentum.
Speaker Change: That have real upside opportunity because that's how you get cost out of the market and let our customers continue to make margin at lower oil and gas prices as they have to continue to work on what their direct SAR. So there is.
Speaker Change: That movement towards full autonomy, we are extremely advanced in that compared to any other firm. There is no competitor that is looking at doing it in a way that we are and I think thats going to be something that picks up momentum and thats likely a.
John Gibson: And that's likely a proposal for a group of companies that want to push that cost lower in 2026 2027. And so we'll work to create that that project with partners and to go forward.
Speaker Change: Our proposal for a group of companies that want to push that cost lower in 2026, 2027, and so we will work to create that that project with partners.
Speaker Change: To go forward.
John Gibson: The software Wow. You know, everybody talks about AI, AI, AI. You know, AI is very important and it's certainly utilized here. But autonomy is really what is driving the changes in the marketplace today. And that's taking people off the vessels, taking people out of the equation, improving efficiency, reducing total recordable incident rates. And it's also driving down that efficiency brings down carbon footprint. We we're in a position on all of those with our solution.
Speaker Change: The software.
Speaker Change: Wow.
Speaker Change: Everybody talks about AI AI.
Speaker Change: It's a very important and it's certainly you had last year.
Speaker Change: But autonomy is really what is driving the changes in the marketplace today and that's taking people off the vessels taking people out of the equation improving efficiency, reducing total recordable incident rates.
Speaker Change: And it's also driving down that efficiency breaks down carbon footprint.
Speaker Change: We were in a position on all of those with our solution.
John Gibson: The maturity of the software is is coming along, we have the commercial release of the ROV software coming out. And of course, there's nothing better than putting it on your own equipment and demonstrating it before you go out and try to push it in the marketplace. Great conversations occurring there. And I think there will be really good traction.
Speaker Change: The maturity of the software.
Speaker Change: <unk> is coming along we have the commercial release of the.
Speaker Change: Rovs software coming out and of course, there's nothing better than putting it on your own equipment and demonstrating it before you go out and try to push it in the marketplace great conversations occurring there.
Speaker Change: And I think Theres, there would be really good traction and then we continue to stay platform agnostic and so our software system can run on any robot and so we're pursuing other robotics companies.
John Gibson: And then we continue to stay platform agnostic. And so our software system can run on any robot. And so we're pursuing other robotics companies to deliver autonomy to them as well.
Speaker Change: Deliver autonomy to them as well and I think that's why I'm confident in our ability to deliver great results. This year.
John Gibson: And I think that's why I'm confident in the in our ability to deliver great results as Thank you, John.
Speaker Change: Thank you Jonathan one last question.
Robert Mandrella: And one last question. And I assume the patents that you have on the software, and the, and, and the hardware basically is 20 years plus.
Speaker Change: I assume the patents that you have on the software.
Speaker Change: And the <unk>.
Speaker Change: And the hardware basically is 20 years plus.
Robert Mandrella: How do you see the lidos? Partnership you know, basically rolling out. Secondly, is it a possibly, you know, possibly a exit, exit down the road?
Speaker Change: How do you see the lighthouse.
Speaker Change: Partnership.
Speaker Change: Okay.
Speaker Change: Basically rolling out secondly is it a possibly possibly exit exit down the road.
Speaker Change: Okay.
John Gibson: Well, you know, I should be a director, I love your question. The fact that I can't answer it doesn't change the fact that it's a great question. You know, we can't talk about exit strategies here as a public company. I'll just say that I'm very interested in Leidos and in the partnership with them. There's a tremendous amount of capabilities we have that we know, believe, bring value to the maritime industry and in the defense sector. And so we're excited as that develops. And I said this a year ago, I just find the defense sector, particularly given the uncertainty that you have in Washington, overspending and budgets and leadership, that we made a really good decision focusing on the commercial side because the speed at which these contracts will be lit.
Speaker Change: Well.
Speaker Change: It shouldn't be a director.
Speaker Change: But the fact, the fact that I can't even answer it does it change the great questions.
Speaker Change: Can you talk about exit strategies here as a public company I will just say that very interested in.
Speaker Change: In line OS and then the partnership with Anheuser a tremendous amount of capabilities we have that.
Speaker Change: No belief bring value to the maritime industry and the defense sector and so we're excited as that develops.
Speaker Change: And I've said this a year ago I, just find the defense sector, particularly given the uncertainty that you have in Washington, and overspending in budgets and leadership.
Speaker Change: We made a really good decision.
Speaker Change: Focusing on the commercial side, because the speed at which these contracts will be lit they've got a big lift in there got to be big and so you want to be there and you want to participate and we want to work with a great partner like light OS, but when you're small that kind of Lumpiness is just not something you can endure. So we're very excited that we've got all of this.
John Gibson: They're going to be lit and they're going to be big. And so you want to be there and you want to participate and we want to work with a great partner like Leidos.
John Gibson: But when you're small, that kind of lumpiness is just not something you can endure. So we're very excited that we've got all this commercial pipeline developing and it will carry us forward. On the Leidos side, they have contractual commitments to us and we're working with them. The timing on that is extended over a long period. And so, you know, we will be announcing those as we get to them, but we're working slowly with them. And as they navigate the uncertainty with the defense sector and really have more experience and capability than we do, we're delighted to have a great partner and continue to look forward to working closely with them.
Speaker Change: <unk> pipeline developing in it it will carry us forward on the lighter side, they have contractual commitments to us and we're working with them.
Speaker Change: The timing on that is.
Speaker Change: Should they extended over a long period, and so we will be announcing those as we get to them, but we're working slowly with them and as they navigate the uncertainty with the defense sector and really have more experience and capability than we do we're delighted to have a great partner and continue to look forward to working.
Speaker Change: Mostly weather.
Robert Mandrella: Thank you. I look forward to your email, John.
Speaker Change: Thank you I look forward to your email Chen Okay Nada.
Unknown Executive: Okay. Not a problem. Take care. Thank you.
Speaker Change: Take care.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Thank you.
Speaker Change: There are no further questions at this time I will now turn the call over to young for closing remarks. Please go ahead.
Unknown Executive: There are no further questions at this time.
John Gibson: I will now turn the call over to John for closing remarks. Please go ahead. appreciate all of you joining today. And it's really hard to do an announcement like this where you're talking about a quarter to come as opposed to a quarter you completed. And so Q2 really is our first quarter where we'll be operational for the whole of the quarter. And I think you'll have a great opportunity at the end of Q2 to come in and construct models and understand how we're executing and what the margins are going to be and who we're working for.
Speaker Change: I appreciate all of you joining today.
Young: And it's really hard to do an announcement like this where you're talking about a quarter to come as opposed to a quarter you completed and so Q2 really as our first quarter four will be operational for the whole of the quarter.
Young: And I think you'll have a great opportunity at the end of Q2 to come in and construct models and understand how we're executing and what the margins are going to be and who we're working for its an exciting time to be at <unk>.
John Gibson: It's an exciting time to be at Nauticus. And the next call in August, I think, is where we're really going to talk about the business and the quality of the business and the quality of the work. And we'll have really strong statements to make about what we're doing and where we're going at that point because we will actually have a track record. And so thank you for sticking with us all this time. And look forward to coming out and talking concretely as opposed to abstractly about what we're doing in the ocean and the value that we're bringing and how customers perceive us.
Young: And the next call in August we I think is where we're really going to talk about the business and the quality of the business and the quality of the work and then we will have.
Young: Really strong statements to make about what we're doing and where we're going at that point, because we will actually have a track record and so thank you for sticking with US all the time and look forward to coming out and talking concretely as opposed to abstractly about what we're doing in the ocean and the value that we're bringing in how customers perceive us so.
John Gibson: So again, appreciate you guys owning shares. And we are trying to create as much value as possible as quickly as we can.
Young: Again, I appreciate you guys own and chairs and.
Young: We are trying to create as much value as possible as quickly as we can take care.
Unknown Executive: Take care.
Young: Ladies and gentlemen, this concludes today's conference call. Thank you all for your participation you may now disconnect.
Unknown Executive: Ladies and gentlemen, this concludes today's conference call. Thank you all for your participation, you may now
Young: Okay.
Young: Yeah.
Young: Yeah.
Young: Okay.