Mr. Greg Reid reports

KRAKEN ROBOTICS UPDATES 2023 FINANCIAL GUIDANCE AND PROVIDES STRONG 2024 OUTLOOK

Kraken Robotics Inc. has updated its financial guidance for the year ended Dec. 31, 2023. While audited results will not be released until mid-April, unaudited preliminary results show that the company's strong momentum continued from Q3 2023 into Q4 2023. As a result, Kraken Robotics expects to report fiscal 2023 revenue at approximately the midpoint of the company's guidance of $66-million to $72-million, representing top-line growth of about 68 per cent year over year. The company also expects adjusted EBITDA toward the higher end of its guidance of $12-million to $15-million versus adjusted EBITDA of $5.3-million for the year ended Dec. 31, 2022. Capital expenditures for 2023 are currently anticipated to be approximately $7.5-million, higher than the company's guidance of $5-million to $6-million due to additional investments in assets for Kraken's engineering, customer success and services groups to drive growth in 2024 and beyond.

Management comments

"Two thousand twenty-three was another strong year for Kraken Robotics, and we anticipate a strong 2024," said Greg Reid, president and chief executive officer of Kraken. "With our contract wins to date and visibility into our sales pipeline, we expect continued strong growth in 2024 and beyond. In the defence market, the macro environment is robust as countries adapt to the new geopolitical norm to monitor and protect critical underwater infrastructure and territories. We are winning new customers and selling more products and services to existing customers. In the commercial market, we expect continued solid growth driven by offering services to companies focused on offshore wind and offshore energy."

Strong outlook for 2024 backed by existing contracts and pipeline

For 2024, Kraken currently expects revenue between $90-million and $100-million and adjusted EBITDA in the range of $18-million to $24-million. Capital expenditures in 2024 are expected to range from $6-million to $7-million. Kraken's 2024 outlook is largely driven by contracts in hand and reflects strength across both the company's products and services groups addressing defence and offshore energy customers.

Going forward, the company is introducing information on its sales funnel pipeline to help investors better understand the underlying growth trends in Kraken's markets served and to show how Kraken's products and services are performing. The company will provide the sales funnel information on an annual basis at the beginning of each year. Ultimately, Kraken's success will be determined by continuing to convert the company's sales pipeline to new orders and successfully executing on these projects and programs. Kraken's total sales pipeline is a combination of opportunities across three areas: sonar products and programs, subsea power, and subsea services.

Kraken's sales funnel pipeline at the end of December, 2023, was over $900-million. On major sonar programs, the company experiences competition from a small number of companies, and Kraken often is included on multiple bid teams as various consortiums bid these navy programs. For subsea batteries, Kraken is often the sole source provider of lithium-ion batteries to its uncrewed underwater vehicle (UUV) customers. In this market, the emergence of a new larger class of UUV, the extraLarge UUV (XLUUV), is driving increased volumes. For subsea services, Kraken's solutions are used by naval, offshore wind, and offshore oil and gas customers to provide high-resolution acoustic imagery of the seabed and subseabed, providing actionable intelligence on critical underwater infrastructure and territories.

About Kraken Robotics Inc.

Kraken Robotics is a marine technology company providing complex subsea sensors, batteries and robotic systems. The company's high-resolution 3-D acoustic imaging solutions and services enable clients to overcome the challenges in the world's oceans -- safely, efficiently and sustainably. Kraken Robotics is headquartered in Canada and has offices in North America, South America and Europe. Kraken is ranked as a top 100 marine technology company by Marine Technology Reporter.

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