Nauticus Robotics, Inc. Common stock 2026 Q2 Earnings Call

Kristin, please go ahead. Thank you, and good morning, everyone.

Joining me today and participating in the call are John Gibson, CEO and President, Jimena Begaries, 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. We have now released our results for the quarter ending June 30, 2026, 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 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. I will now turn it over to John.

Thank you, Kristin, and good morning, everyone. Glad you're joining us today. I'm going to save my remarks until the conclusion of the call today. At this point, I'd like to just turn it over to Jimena to walk through the financials.

Jimena? Thank you, John, and good morning, everyone.

During our second quarter, we remained focused on strengthening the company's capital structure and preserving our NASDAQ listing. We completed several important financing initiatives, including finalizing the registration process for our equity line of credit, filing the Series D certificate of designation, and executing additional debt to equity exchanges that reduced outstanding debt by $5.5 million while supporting stockholder equity. I will now discuss our financial results for the second quarter of 2026. Revenue for the second quarter was $0.9 million, an increase of $0.7 million sequentially and a decrease of $1.2 million compared to the same quarter last year. Operating expenses for the quarter were $6.9 million, a decrease of $1.6 million compared to 2025 and an increase of $1 million sequentially. This reflects a continuous focus on cost management, partially offset by increased activity levels compared to the first quarter of 2026.

G&A costs for the quarter were $3.3 million, representing an improvement of $1.1 million from the same quarter last year. Sequentially, G&A has remained mostly flat, increasing by less than $0.1 million quarter over quarter, demonstrating continued discipline in managing our corporate overhead. Net loss for the quarter was $11.1 million, compared to $9.3 million in the first quarter of 2026 and $7.4 million in the second quarter of 2025. The increase was driven mostly by non-cash losses recognized on debt extinguishment transactions related to the exchange of outstanding debt for equity securities. Adjusted net loss for the quarter was $7 million, compared to $7.4 million for the second quarter of 2025 and $6.4 million in Q1 2026. Cash at the end of Q2 2026 was $2 million, compared to $7.6 million at the end of 2025. This decrease is related to cash used in operating activities.

As we enter the second half of the year, our priorities remain clear, continuing to strengthen the balance sheet, maintaining disciplined cost management, and ensuring we have the financial flexibility to support commercial execution and future growth opportunities. With that, I will now hand the call over to Steve Walsh, our sales lead, for an update.

Thank you, Jimena, and good morning. Entering the year, many operators based their capital spending plans on oil prices in the mid $50 to $60 per barrel range, which led to a more cautious approach to offshore activity in the Gulf of America. As a result, several projects we had anticipated moving forward this year have been deferred into 2027, and in some cases, beyond. In response to these market conditions, we've adjusted our operating model to better align our cost structure with current demand. Our objective has been to maintain flexibility to rapidly deploy our personnel and equipment when projects move forward while avoiding the expense of maintaining a fully mobilized vessel throughout the entire work season. This disciplined approach allows us to remain responsive to customer needs while managing costs and preserving financial flexibility.

While these market dynamics have impacted the timing of work in the Gulf, we have made meaningful progress in diversifying our business. We have expanded our presence in the offshore wind market along the East Coast, successfully completed work with one of the world's largest subsea cable-laying companies, have projects scheduled on the West Coast in the coming months, and currently have international tendering opportunities. We also achieved an important operational milestone by successfully deploying a Comanche ROV integrated with our Nauticus ToolKITT software. The combined system performed exceptionally well for our client, demonstrating the value of integrating intelligent software with proven subsea hardware. Nauticus ToolKITT demonstrated the ability to improve the ROV's operating efficiency while reducing pilot workload, allowing missions to be executed more effectively and consistently.

This successful deployment further validates our technology strategy and provides another example of how our software-enabled solutions can help customers improve productivity, reduce operating costs, and enhance the overall efficiency of subsea operations. In addition, we are actively pursuing opportunities outside the U.S., where we believe our technology and capabilities are well-aligned with growing demand for efficient, autonomous offshore operations. We are also seeing a growth in the number of opportunities in the defense sector. While these efforts remain in the early stages, we are making strategic investments in marketing, capabilities, alliances, and business development to position Nauticus to compete effectively for this work. We believe our autonomous subsea technologies and software-driven solutions are well suited to support the evolving defense and national security missions, creating another avenue for long-term growth and diversification.

Although the near-term offshore oil and gas market remains challenging, we are encouraged by the strength of our opportunity pipeline, the continued expansion of our customer base across multiple offshore markets, and the progress we are making in positioning the company for long-term growth. We remain focused on executing our strategy, expanding our commercial footprint, and creating sustainable value for our shareholders. With that, I will turn it over to Brian Allen, our revenue lead, for his thoughts on 2026.

Thanks, Steve. Jimena has taken you through the numbers, and I want to cover why this business has been hard to forecast and what we are doing about it. Looking at our revenue the way an investor would, I see a business that is hard to model, and there are four reasons for that, and we are changing all of them. First, where we sit in the contracting chain. Our services business is mostly time and materials-orientated, and we normally bid as a subcontractor. That means we win work only if the company above us wins theirs first. Their timing sets ours, their price affects ours, and when their contract slips, our revenue moves with it, and that is what has been happening. Second, time and materials pricing hands the customer the efficiency our technology creates. So we finish faster, they pay for fewer days, and we earn less overall.