Yahoo Finance Nauticus Robotics Inc (KITT) Q4 2023 Earnings Call Transcript Highlights: Navigating Through ...
Revenue: Q4: $1.1 million, down $2.1 million YOY; Full year 2023: $6.6 million, down $4.8 million from 2022.
Operating Expenses: Q4: $35.3 million, up $24.9 million YOY.
Impairment Charge: Q4: $25.3 million, with $15.1 million on Equinox units.
Net Loss Attributable to Common Stockholders: Q4: $39.5 million; Full year 2023: $50.7 million.
Adjusted Net Loss: Q4: $8.8 million; Full year 2023: $34.3 million.
Assets Held for Sale: $92.9 million worth, including three hydro off the tracks.
Cash Position: End of 2023: $800,000; Secured $13.4 million in Q3 2024.
Cost Reduction: Expected G&A expense reduction in 2024 by more than 50% YOY.
Release Date: April 10, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Nauticus Robotics Inc (NASDAQ:KITT) is transitioning from a research and development organization to a customer-centric innovation, for-profit enterprise.
The company has added key leadership roles with significant industry experience, including an interim CFO with public company reporting skills and a General Counsel with complex deal expertise.
Nauticus Robotics Inc (NASDAQ:KITT) has a strong engineering team working on certifying the Aquanaut Mark 2 for commercial work, expected to be ready by fall 2024.
The company has successfully conducted full system testing of their vehicles in the Gulf of Mexico, exceeding depths of 1,300 meters.
Nauticus Robotics Inc (NASDAQ:KITT) has secured $13.4 million of additional funding from current investors, improving their financial position.
Negative Points
Revenue for Q4 was down $2.1 million from the previous year, and full year revenue for 2023 was down $4.8 million from 2022.
Operating expenses for Q4 increased by $24.9 million from the same period in 2022, including a one-time impairment charge of $25.3 million.
The net loss attributable to common stockholders for Q4 was $39.5 million, a significant increase from Q4 2022.
Government contracts, while potentially lucrative, are described as 'lumpy' and sporadic, making revenue and cash flow difficult to project.
Cash at the end of 2023 was only $800,000, indicating a potential liquidity issue before the additional funding was secured.
Q & A Highlights
Q: What are you seeing for next year, and what are the key areas of opportunity, meaning which industries do you find most exciting in 2025? A: The ROV market for the oil and gas industry is expected to see growth due to an upgrade cycle in 2025. Nauticus Robotics Inc is looking forward to the market uplift for ROVs and plans to have a tested vehicle ready by 2024 to participate in this growth.
Q: Can you give us an update or any additional color on some of those DoD contracts you have been working on? A: The company has completed projects for the Defense Innovation Unit of the Department of Defense and anticipates receiving certificates indicating successful completion. While the DoD business is valued, it is sporadic, and the company is seeking continuity of revenue and cash flow by pursuing non-government projects that match their capital and competencies.
Q: Can you speak to some of the key levers you've been pulling to reduce SG&A and R&D expenses? A: Nauticus Robotics Inc has shifted focus from R&D to testing, certifying, and ensuring their current product is commercially ready. The company has reduced its workforce and G&A costs by more than 50% and is focused on cost management and delivering value to shareholders and customers.
Q: Can you give us a little bit of color on how your relationship with Petrobras has evolved? A: The relationship with Petrobras is very supportive, with enthusiastic champions for the technology. The company is focused on delivery and meeting contractual requirements, and there is a strong belief in the value that Nauticus Robotics Inc will bring once the product is certified.
Q: What do you see as the most important factors for your team to focus on as you make the company more customer-focused rather than R&D-focused? A: The most important factors are meeting contractual requirements and transforming the company culture to be customer-centric. The company is also focused on cost management and being good stewards of the resources they have.
Q: How many opportunities do you currently have, and how many do you see us making in the near future? A: Nauticus Robotics Inc currently has one vehicle in the water being tested, another being assembled, and a third in parts ready for assembly. They plan to focus on commercial success with these three vehicles before considering building more.
Q: Why don't we see any insider buying at the current valuation, which could instill confidence in the shareholder? A: The CEO has taken a significant portion of his compensation in shares, indicating his belief in the company's future. Other executives are also compensated with shares. The trading window has been closed due to potential mergers and other material non-public information, but it will open soon, and insider transactions may occur then.
This article first appeared on GuruFocus.
