Mr. Greg Reid reports

KRAKEN ROBOTICS REPORTS Q1 2023 FINANCIAL RESULTS WITH 38% YEAR-OVER-YEAR REVENUE GROWTH

ST. JOHN'S, Newfoundland and Labrador, May 30, 2023 (GLOBE NEWSWIRE) -- Kraken Robotics Inc. (TSX-V: PNG, OTCQB: KRKNF) ("Kraken" or the "Company"), announced it has filed financial results for the quarter ended March 31, 2023 ("Q1 2023"). "With more than $120 million of large contract wins since the beginning of 2022, we are seeing an acceleration in end market demand driven mainly by a heightened geopolitical focus on maritime security and growth in offshore renewable energy," said President and CEO Greg Reid. "We have started 2023 on solid footing. Q1 is seasonally our slowest quarter, and we expect to see accelerating results throughout the year driven by defense contracts in hand and normal ramping of activity in our services business focused on offshore wind."

Q1 2023 Financial Highlights

• Total revenue was $7.6 million versus $5.5 million for the quarter ending March 31, 2022 ("Q1 2022"), a 38% increase.
• Products revenue was $5.3 million compared to $3.7 million in Q1 2022, a 43% increase, which was driven by a record number of synthetic aperture sonar (SAS) being delivered, work on our large subsea battery order received in Q4 2022 as well as production of a KATFISH high-speed towed synthetic aperture sonar (SAS) system.
• Services revenue increased 26% to $2.3 million over Q1 2022, driven by completion of a Robotics-as-a-Service (RaaS) contract utilizing our KATFISH system.
• Gross margins in Q1 2023 were 59.4% as compared to 32.9% in Q1 2022 and increased due to a change in product and project mix.
• Adjusted EBITDA1 for the quarter was $0.9 million compared to an Adjusted EBITDA loss of $0.4 million in the comparable quarter. The impact was due to higher revenue and improved gross margins.
• Net loss in the quarter was $1.3 million, compared to net loss of $2.6 million in Q1 2022.
• Cash balance at March 31, 2023 was $4.0 million. Subsequent to the quarter, payments on large projects totalling over $8.0 million were received.
• Total assets were $65.2 million at March 31, 2023, compared to $63.9 million at March 31, 2022.
• At March 31, 2023, Kraken had $13.8 million in previously awarded non-repayable funding to draw upon from government agencies and project partners for research and development. Of this, $2.2 million of cash has been received for contracts to be completed.

Q1 2023 Operational Highlights

Product Business

• During the quarter, Kraken announced $2.8 million in SAS purchase orders from defence customers. These systems will be integrated to Autonomous Underwater Vehicles (AUVs) for use in minehunting and security applications.
• January 10, 2023: Appointed David Shea to Chief Technology Officer.

Service Business

• Q1 is seasonally the slowest quarter for our Services business given offshore weather conditions in our main operating geographies.
• During Q1, Kraken completed a 200-kilometer KATFISH seabed survey in coastal waters of a large Asia Pacific country.
• During Q1, Kraken completed several smaller sub-seabed services jobs (cable depth of burial and boulder detection) for offshore wind projects.

Operational Highlights Subsequent to End of Q1 2023

• May 15, 2023: $1.1 million of SAS orders.
• May 9, 2023: $16 million order for subsea batteries.
• April 20, 2023: $3 million order for subsea power systems.
• April 18, 2023: $4 million order from a NATO navy.

Outlook for 2023

Kraken Robotics reiterates its financial guidance provided on May 1, 2023. For fiscal 2023, we expect revenue to be in the $66 - $78 million range and adjusted EBITDA in the $12 - $17 million range. The mid-point of our guidance range ($72 million in revenue and $14.5 million in EBITDA) implies revenue growth of 76% over 2022 and adjusted EBITDA growth of 275%. Capex in 2023 is expected to be $5-$6 million.

ABOUT KRAKEN ROBOTICS INC.

Kraken Robotics Inc. (TSX.V: PNG) (OTCQB: KRKNF) is a marine technology company providing complex subsea sensors, batteries, and robotic systems. Our high-resolution 3D acoustic imaging solutions and services enable clients to overcome the challenges in our oceans - safely, efficiently, and sustainably. Kraken Robotics is headquartered in Canada and has offices in North and South America and Europe. Kraken is ranked as a Top 100 marine technology company by Marine Technology Reporter.

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