Deep Sail Capital
Founder & CIO of Deep Sail Capital, Long/Short GARP, Quality/Growth/Micro-Caps
Kraken Robotics is the subsystem prime for underwater drones, putting $3-5 million of content per hull in reach as Anduril and navies scale uncrewed fleets. Its offering spans batteries, sonar and navigation via Covelya/Sonardyne. Funds that bought near CAD $2 two years ago have spent four months clearing their positions, and that selling is mostly past. x.com x.com x.comÂ
Kraken Robotics is very close to a bottom after a 60% drawdown from its peak through the announcement and closing of its acquisition. It should earn $0.20 CAD a share in 2028 with top-line growth in the mid-20s to 30s percent, driven by multiple major product ramps with Anduril beginning now. Waiting for the first combined results with Covelya and a base in the stock, as @inflectionecon suggests, risks missing the move; it needs to be front-run a bit. x.com x.comÂ
Kraken Robotics offers one of the best risk-reward setups in defense, giving exposure to Anduril's autonomy trend at a fraction of the valuation. It supplies SeaPower subsea batteries for Anduril's underwater drone programs, has 2026 product orders of $327-355M and guides to $290-320M revenue and $65-75M adjusted EBITDA, yet sits near a sub-$1B market cap after a 60%+ drop. It plans a full TSX listing in late 2026 or early 2027, and $10 is the target. x.comÂ
Kraken Robotics' customer base is broadening, and on its earnings call it said it just landed one of the largest US defense companies as a customer, unnamed. It announced $28 million of SeaPower battery and SAS orders, including battery contracts from three large international defense companies and a SAS order from a new commercial UUV maker. CEO Greg Reid said its products are integrated, or being integrated, into more than 30 UUV platform types worldwide. x.com x.com x.comÂ
Kraken Robotics is stuck in a trap as its key catalyst, the Anduril subsea ramp, is delayed by at least a year. That ramp likely needs a US battery facility and a Navy order to confirm, and the defense budget showed no large FY27 subsea-drone order. The market has also turned on drone and defense stocks after they ran ahead of a multi-year buildout, and without an uplisting from its junior exchange institutional ownership and volume stay thin. Second-half earnings may bring some support. x.comÂ
Anduril's purchase of acoustic-modem maker Popoto Modem signals it plans to build its undersea fleet at scale, and more hulls mean more Kraken Robotics batteries. Kraken has supplied pressure-tolerant batteries to the Dive line since 2020 and reportedly powers Ghost Shark and Copperhead; Anduril's Rhode Island plant targets 200+ Dive LD vehicles a year, and qualifying a new battery takes years. Retail owns 79.6% of shares; a TSX uplisting by early 2027 or a US listing could draw institutions. … Show more
Recent US Navy unmanned-vehicle contracts are a big deal for Kraken Robotics that the market is ignoring. HII, a confirmed Kraken sonar customer, won a medium unmanned vessel award of 10 vessels at $40M each, and three of four finalists for the CAMP large underwater vehicle, including Anduril, have strong ties to Kraken. With revenue above $300M after the Covelya deal, smaller contracts move the needle less, and at 15x NTM EBITDA the stock may bottom near $4. x.com x.com x.com x.comÂ
Kraken Robotics is not yet a buy despite falling almost 60% from its high. It should first report combined results with Covelya that preserve a credible growth and margin path, and the stock should form a base; the defence factor remains deeply out of favor. @DeepSailCapital argues it is near a bottom, expecting CAD 0.20 of 2028 EPS, mid-20s to 30s revenue growth and product ramps with Anduril. x.com x.comÂ
These five defense autonomy companies can each 10x on fast-growing drone, unmanned and counter-drone businesses. Kraken Robotics makes subsea drones, batteries and sonar for autonomous underwater warfare. Ondas grew TTM revenue 979% to $174M and guides 2026 to $525M-$550M. Kratos has a $2B backlog in unmanned systems, hypersonics and missile defense. AeroVironment grew TTM revenue 84% to $2.0B on military drones, and Red Cat grew 867% with a 2026 target of $150M-$180M. x.comÂ
Kraken Robotics' organic results are strong, and adding Covelya should make the picture even better. Per Kraken Robotics, Q1 2026 revenue grew 35% year over year and 2026 guidance was reiterated. x.comÂ
Kraken Robotics and Ondas Holdings face weak demand prospects: it is hard to see how many battery-powered submarines Taiwan or Europe will actually order. x.comÂ
Kraken Robotics makes subsea sensors and batteries for underwater drones, including synthetic aperture sonar and SeaPower batteries, and NATO navies are already deploying its technology. The ocean is the next contested domain. x.comÂ
