Nauticus Robotics(KITT) - 2023 Q4 - Earnings Call Transcript

Financial Data and Key Metrics - Net loss for Q4 2023 was $8.8 million, compared to$5.7 million in the same period last year [12] - Full-year adjusted net loss for 2023 was $34.3 million, an increase of$18.7 million from the previous year [12] - Revenue for Q4 2023 was $1.1 million, down$2.1 million from the previous year [43] - Full-year revenue for 2023 was $6.6 million, down$4.8 million from 2022 [43] - Operating expenses for Q4 2023 were $35.3 million, a$24.9 million increase from the same period in 2022, including a one-time impairment charge of $25.3 million [43] - Cash at the end of 2023 was$800,000, with an additional $13.4 million secured in Q1 2024 from current investors [16] Business Line Data and Key Metrics - Autonomous Solutions group is focused on the Aquanaut Mark 2 vehicle, currently undergoing full system testing in the Gulf of Mexico, with testing exceeding 1,300 meters [5] - ToolKITT software platform is platform-independent and has been successfully used on several subsea robots [6] - Electric Manipulators differentiate the company from competitors, with a focus on transitioning subsea work to autonomous untethered systems [7] - Government Solutions completed two projects for the Department of Defense in 2023 and Q1 2024, with no future work expected from these projects [50] Market Data and Key Metrics - The government market segment is believed to exceed$1.5 billion in 2025, but the company's addressable market is smaller due to capital constraints [50] - The ROV market is expected to see growth in 2025, particularly in the oil & gas industry, with opportunities for the company to enter the market with a tested vehicle [18] Company Strategy and Industry Competition - The company is transitioning from a research and development organization to a customer-centric innovation for profit enterprise [9] - Organizational changes include the addition of an Interim CFO, General Counsel, and sales leadership, with a focus on reducing G&A expenses by more than 50% year-on-year in 2024 [16] - The company has reorganized into four business units: Autonomous Solutions, Electrical Manipulators, Autonomy Software, and Government Solutions [40] - The company is focusing on cost management and aligning its culture to be customer-centric, with a reduction in headcount from over 100 to less than 50 [23] Management Commentary on Operating Environment and Future Outlook - Management is optimistic about the 2025 market uplift for ROVs and the company's ability to step into the market with a tested vehicle [18] - The company is focused on delivering on contractual requirements and transforming its culture to be customer-centric [21] - Management is confident in the company's ability to create value for shareholders, lenders, and customers through cost management and operational efficiency [23] Other Important Information - The company has one Aquanaut vehicle fully assembled and being tested, with a second vehicle in the shop and a third in preparation for assembly in early 2025 [32] - The company has no plans to build additional vehicles beyond the three currently in progress, pending commercial success [32] - Management compensation is heavily weighted towards shares, reflecting confidence in the company's future [28] Q&A Session Summary Question: What are the key areas of opportunity for the ROV market in 2025? - The ROV market, particularly in the oil & gas industry, is expected to see growth in 2025, with opportunities for the company to enter the market with a tested vehicle [18] Question: What are the most important factors for the team to focus on as the company becomes more customer-focused? - The most important factors are contractual requirements, aligning the culture to be customer-centric, and being cost-conscious [23] Question: How many Aquanauts does the company currently have, and how many are planned for the near future? - The company currently has one Aquanaut fully assembled and being tested, with a second in the shop and a third in preparation for assembly in early 2025 [32] Question: Why isn't there any insider buying of the company's shares? - Management compensation is heavily weighted towards shares, and the window for insider buying has been closed due to potential merger discussions and material non-public information [28]