Kraken Robotics Inc.

good morning and welcome to the crafting robotics second quarter of 2025 financial results conference call for the three months ending june 30th 2025. as a reminder all participants are in a listen-only mode and the conference is being recorded my name is jamie and i will be your operator today after the presentation there will be an opportunity for analysts to ask questions To join the question queue, you may press star and then one on your telephone keypads. Should you need assistance during the conference, you may say no to an operator by pressing star and zero. At this time, I'd like to turn the floor over to Joe McKay, Kraken's Chief Financial Officer. Please go ahead.

Thank you, Jamie, and good morning, everyone. Thank you for joining Kraken Robotics Q2 2025 earnings release call. During the call, all the participants are in a listen-only mode. And then following management's commentary, we'll conduct a question and answer session with the financial community. Members of the media and retail investors should contact our PR staff and our investor relations staff listed on our press release today. Before we begin, I want to remind everyone that certain statements in this call may be forward-looking in nature. Matters discussed on today's call, including guidance and outlook for 2025 and beyond, statements involving known and unknown risk, uncertainties, and other factors that could cause actual results to differ materially from the expressed or implied in our forward-looking statements reflect the company's judgment based on information available at the time of this call today. Please see our forward-looking statements and risk factors included in our press release, our MD&A, and our AIF, which are all available on CDAR and our website. Today's call will include non-IFRS financial measures, and they are reconciled to our IFRS results which are within our release as well as the MD&A. Unless otherwise stated, all dollar amounts discussed today are denominated in Canadian dollars. With all that being said, I'll hand it over to our president and CEO, Greg Reed.

Thanks, Joe, and good morning, everybody. Welcome to Kraken Robotics' second quarter 25 conference call, financial earnings conference call. I'll start with a brief summary of Kraken Robotics. After this, I'll summarize key highlights across our products and our services. during our Q2 and the first half of 2025 and what we can expect through the year and beyond. Then Joe will run through our Q2 and first half financial results and provide our outlook. We'll finish up the call with questions from analysts. Kraken is an ocean technology company focused on transforming subsea intelligence through the provision of advanced imaging sensors, endurance solutions, and underwater robotic systems. Our technologies are used in both military and commercial applications with leading navies, defense contractors, and offshore energy companies such as the US, Australian, Canadian, Danish, and Polish navies, underwater vehicle manufacturers such as HII, Endural, Teledyne, and companies in the offshore service supply chain such as Ocean Infinity, Fugro, Subsea7, Saipem, Technip, and more. We're headquartered in Canada. We have manufacturing and service operations in Canada, the US, the UK, and Germany, and we have sales and R&D offices in Denmark and Brazil. With almost 400 employees, we serve the global market supporting defense, offshore energy, and marine science customers with solutions that enhance harsh environment underwater operations. We report two lines of business, products and services. Our product business focuses on subsea power solutions, subsea platforms, and advanced sensors, all tailored for underwater applications for both defense and commercial markets, particularly in maritime security and offshore energy. I'll start first with subsea power products, which we brand SeaPower. These subsea pressure-tolerant battery systems enable increased energy density for autonomous underwater vehicles in the demanding conditions of deep sea environments. Our sea power batteries are used by a number of Navy and commercial customers across the globe in their autonomous underwater vehicles. Our subsea power business is seeing strong demand driven mainly by defense customers with large underwater vehicles. Our subsea battery pipeline continues to be robust with opportunities across a range of customers from small to large underwater vehicles. We continue to expect additional large vehicle design wins in 2025 as new customers order initial quantities of batteries for their engineering test prototype underwater vehicles. On the battery development front, we will introduce a new higher energy density battery later this year and expect them to start initial production in Q4. In addition, new cell form factors will allow us to address the smaller and the medium sized AUV market. That's a segment of the market that we have not traditionally had solutions for. We're also pleased to announce that an initial subsea energy storage partner who will use our batteries in their subsea energy storage systems that they sell to the offshore energy markets for reliable seabed power. Finally, an update on our Nova Scotia production facility in Canada that we announced in February of this year. This facility is on schedule to open in late September, early October with initial training of new hires. Equipment is moving in place and we're fitting out the facility as we speak. In preparation for the move, these key hires have been shadowing our German operations where we build batteries and we're targeting to manufacture initial batteries late at the end of 2025 out of Halifax. Turning to our other products business, sensors and platforms, geopolitical conditions across Asia, Europe and the US are fueling defense spending across Western allies and interest in our sensors and platforms. Based on customer and industry conversations, the next 12 to 36 months will likely see a major increase in requests for proposals and contract awards around the world in the mine hunting and maritime security space. We anticipate the spend in this next phase will be significantly higher when compared to historical activity. Kraken has demonstrated the performance of our mine hunting sonar and systems capabilities within customers that include leading NATO and Five Eyes navies like the Royal Danish Navy, Royal Australian Navy, United States Navy, the Royal Canadian Navy and others. Our reputation within mine countermeasures is solid across the defense industry and we're positioned to win our fair share of this new business. We have been active on the demo front within water demonstrations for our platforms and sensors so far this year in countries such as the US, the Netherlands, Italy, and New Zealand, and we'll do additional demos in the UK and Turkey in Q3 and Q4. In September, our systems will be used by numerous navies at Bretmas in Portugal, building off our success in 2024 at Bretmas where five different navies used our sonar systems on their underwater vehicles. On the innovation front, looking at our product developments for our platforms and sensors, we have developed a new circular SAS product which we expect to be a requirement for the US Navy as well as several other large navies. We also have a longer range SAS for larger unmanned underwater vehicles under development and we're in discussion with potential launch customers. We will also demonstrate a new unmanned surface vessel or a USV launch and recovery system with a large defense prime and a Navy in Europe this fall. Our LARS are advanced solutions that streamline the deployment and retrieval of our catfish towed vehicle from unmanned surface vessels, enhancing operational efficiency in challenging marine environments. Our new LARS is significantly smaller and lighter than our existing LARS and opens the aperture to allow for integration on a greater variety of vessels of opportunity and USVs. Moving over to our service business, this is an important part of Kraken's growth strategy, capitalizing on the increasing demand for advanced subsea solutions in the offshore energy sector, particularly in the commercial offshore wind and oil and gas markets. Here, we provide clients with a variety of subsea survey and inspection capabilities that reduce client costs and risks across all aspects of marine infrastructure planning, construction, operations and maintenance, and decommissioning. In addition to being a high-margin, profitable, and growing revenue stream, the feedback loop between our offshore teams and our customers to our R&D and engineering groups adds significant value to guiding our technology roadmaps. In other words, we eat our own cooking. Similar to our subsea battery business, our service business had strong results in the second quarter and the first half of 2025. This was the first quarter from our acquisition of 3D at depth, and its contributions to our financial results, operations, and opportunities have been solid. Since the acquisition closed, 3D at Depth has had projects in the Gulf of Mexico, Norway, Guyana, Brazil, and Australia, to name a few. In addition to commercial customers, we see the applicability of their technology to defense customers and prospects, several of whom are already evaluating it. In addition to offshore energy, 3D also provides LIDAR services to the U.S. nuclear industry. While a small portion of their revenue stream, there are opportunities for growth in the nuclear sector in both services and potential product sales. 3D's precise measurements and high-quality service deliverables has a growing and highly repeatable customer base, with clients returning for new datasets, enhanced second-run data, comparative analyses, modeling and updates, on previous measurement deliverables years after the initial data collection. The company's average job size continues to grow as the company does more dynamic scanning work where the average job size is larger at over $500,000 per job. Beyond 3D at Depth, Kraken's other commercial service business so far this year has been active in the North Sea, the Baltic Sea, and Taiwan, where we've been conducting buried cable imaging and sub-seabed boulder surveys for offshore oil and gas and offshore wind customers. To support future commercial projects, we recently delivered a new service dedicated catfish to the UK and expect it to be in the water for customer demonstrations in September. Overall, our service business is recording strong asset utilization and to support future work, we're building additional sonar and optical systems, which are accounted for in our CapEx figures. The U.S. offshore renewables market has had challenges, as noted by companies like Orsted and Fugro. However, the renewable markets in other parts of the world remain strong, and with our diversification geographically with offshore oil and gas and unique technology tools, we see minimal impacts from the U.S. offshore renewables on our service business growth forecasts. Before handing the call back to Joe to discuss our Q2 financial results, I want to highlight just a few other points that occurred since the last call. First, we strengthened our Board of Directors by appointing Defense Industry Veteran and former Raytheon and Boeing Executive Kristen Robertson at our June AGM. Kristen brings more than 30 years of experience managing complex portfolios at top U.S. defense companies. As it relates to subsea technologies, she was Vice President and Manager of Autonomous Systems at Boeing, leading a portfolio of seabed projects, including the ORCA, Extra Large Unmanned Undersea Vehicle for the U.S. Navy, and she also served as Board Chairman for Boeing's Liquid Robotics subsidiary. In July, we closed the $115 million bought deal that was well oversubscribed and added a number of new long-term institutional investors. This strengthening of the balance sheet is beneficial for us on a number of fronts, allowing us to more aggressively pursue our growth plans across capacity expansion, new product development, and M&A. We have a good track record of selective accretive acquisitions and we expect our recent acquisition of 3D at Depth to continue that record. We continue to look at other M&A opportunities, running them through our strategic and financial filters, and we see opportunities across the spectrum for additional tuck-ins to larger transformative deals. Geographically, our M&A focuses on additional capabilities and customers in the U.S. and Europe. We are also pleased with the expansion of our institutional investor base and appreciate new analysts who launch research coverage on Kraken, bringing the total number of dealers covering our story to seven. With that, I'll turn it over to Joe for financial comments on the quarter and the half year.