Q & A Highlights

Q: With the strategy of serving as a primary contractor internationally, what are the trade-offs in terms of margins and capital intensity, especially regarding vessel commitments and execution risk? A: Brian Allen (Chief Revenue Officer) explained that while primary contracting can be riskier, the company is not looking to take on long-term charter commitments. Instead, they plan to use vessels of opportunity for specific projects, mobilizing and demobilizing them as needed to minimize risk. The flexibility comes from using their own software systems, which increases margins and allows them to specialize in contract types that fit their ToolKITT software, further reducing risk.

Q: Can you frame the decision timeline and what needs to happen to convert the broader multi-phase defense opportunity that could bring revenue in 2026 and 2027? A: John Gibson (President and Interim CEO) stated that the company is focused on deploying limited assets to larger, longer-term opportunities, forgoing short transactional work that would require long boat contracts. They have active proposals in place for the Aquanaut in the defense sector, which are typically two-to-three-year commitments. He emphasized that they have lost no revenue to a competitor and are pursuing contracts that provide sustained revenue, even if it means some depressed revenue in the short term.

Q: With autonomous underwater systems now being used operationally in the Middle East, including mine clearance in the Strait of Hormuz, where does Nauticus fit into that picture, and has it changed defense conversations? A: John Gibson (President and Interim CEO) noted that the company is refurbishing its Aquanauts to prepare for testing in Stuart, Florida, specifically for mine countermeasures. They have secured a dummy for imaging and hope to demonstrate results to the Department of War soon. He highlighted that the Aquanaut's imaging and hovering capabilities are excellent and that this specific task is what the vehicle is best suited for.

Q: Does the challenging Gulf of America oil and gas activity signal a structural change in strategy and appetite for that market, potentially nudging the company further toward other customer types? A: John Gibson (President and Interim CEO) said that while the oil and gas market is expected to remain strong, the margins could be much better on the port security and defense sides, so the company is seeking margin, not just work. He also expressed optimism about the UAE partnership, highlighting the new manufacturing facility in Ras Al-Khaimah and the differentiated capability of their manipulators on autonomous underwater vehicles, which is a unique selling point.

Q: Can you elaborate on the shift to becoming a primary contractor and how it changes the revenue model, particularly regarding fixed-price contracts and capturing the efficiency gains from autonomy? A: Brian Allen (Chief Revenue Officer) explained that the services business will bid as the main contractor on international work where autonomy provides an advantage. By holding the contract, they set the price and scope, keeping the margin created by their technology. These contracts will be fixed-price, meaning when autonomy takes days out of a job, it directly improves their margins, moving away from the time-and-materials model that previously handed efficiency gains to the customer.

Q: What is the status of the Nauticus ToolKITT software release, and how does it contribute to the company's revenue strategy? A: Brian Allen (Chief Revenue Officer) announced the first formal release of Nauticus ToolKITT software for ROVs, now on sale to underwater fleet operators in the energy and defense sectors. This marks a shift toward recurring, predictable revenue starting in 2027. Jason Close (VP, Growth & Go-To-Market) added that the software has exceeded expectations in customer operations, improving vehicle stability and survey consistency, providing field validation for the commercial adoption model.

Q: What progress has been made on the Aquanaut and the next-generation electric manipulator, and how do they fit into the defense and commercial strategy? A: Jason Close (VP, Growth & Go-To-Market) reported that the freshwater phase of autonomous mooring line and riser inspection workflows was completed, with the next phase requiring an offshore test environment. The prototype of the next-generation electric manipulator was completed, with functional and load testing underway. This technology is foundational for future commercial and defense missions requiring autonomous subsea interaction, and the company is prioritizing defense and government opportunities where programs fund phased development.

Q: Can you provide more detail on the financial results for Q2 2026, including revenue, operating expenses, and the net loss? A: Jimena Begaries (Interim CFO) reported Q2 2026 revenue of $0.9 million, an increase of $0.7 million sequentially but a decrease of $1.2 million year-over-year. Operating expenses were $6.9 million, down $1.6 million from Q2 2025. Net loss was $11.1 million, driven mostly by non-cash losses on debt extinguishment transactions, while adjusted net loss was $7 million. Cash at the end of Q2 was $2 million, down from $7.6 million at the end of 2025.

Q: How is the company addressing the challenges in forecasting revenue, and what changes are being implemented to improve predictability? A: Brian Allen (Chief Revenue Officer) identified four reasons for the difficulty in forecasting: position in the contracting chain, time-and-materials pricing, software maturity, and pipeline coverage. To address these, the company is targeting a significant increase in pipeline coverage for 2027, expanding internationally and in the defense sector, bidding as a main contractor on fixed-price projects, and formally releasing ToolKITT to generate recurring revenue. They will also communicate bookings and backlog in future calls.

Q: Regarding the possibility of another reverse stock split, what is the company's current position on maintaining its Nasdaq listing? A: John Gibson (President and Interim CEO) stated that the company has no desire to undertake another reverse split and that, based on the recent share price recovery, a reverse split is not required to maintain the Nasdaq listing. However, they continue to monitor and prepare for any changes to Nasdaq's listing standards to ensure compliance and a well-positioned future.

For the complete transcript of the earnings call, please refer to the full earnings call transcript .