Today I am analyzing a share that I personally consider to be a tenbagger or even more over the next 5-10 years. It's about Kraken Robotics, a company that operates at the interface of several megatrends: Robotics, underwater technology and defense! In the following, I will try to show you why I am so convinced of the company and how much growth potential it has, but also what risks could possibly hinder it...

This analysis has taken a lot of time, so I hope it doesn't get lost here...

• Foundation and history
• What does KR do?
• Strategic acquisitions
• Q3 2025
• Megatrends: robotics, military, underwater infrastructure
• Conclusion
• Sources

Foundation and history

Kraken Robotics was founded in 2012 in St. John's, Newfoundland and Labrador, Canada, and was born from the entrepreneurial vision of Karl Kenny, an experienced manager in the maritime technology sector. Today, he holds around 11% of the company.

From the outset, the company focused on the development of high-resolution synthetic aperture sonar systems, which offer significantly better image quality than conventional sonar solutions. This clear technological focus laid the foundation for a unique market position early on.

In the early years, Kraken Robotics was strongly development-driven, with the majority of sales coming from pilot projects and government-supported programs. The Canadian location proved to be a strategic advantage, as it offered access to maritime expertise, qualified specialists and funding programs.

In 2015, the company decided to go public in Canada, primarily to raise capital for further growth and dissemination of the technology. In the following years, Kraken Robotics supplemented its organic growth with targeted acquisitions and expanded its portfolio to include autonomous underwater vehicles, sensor technology and services.

I don't think more information is needed here for me as an investor.

What do they do specifically?

Kraken Robotics is clearly positioned technologically in the field of underwater sensor technology, autonomous robotics and maritime data analysis.

The company's core business lies in high-resolution acoustic imaging under water, as optical systems can hardly be used at great depths or in turbid water. At its heart is the so-called Synthetic Aperture Sonar (SAS), which calculates an extremely detailed overall image of the seabed from many individual sonar measurements. This technology enables resolutions in the centimeter range, even at depths of several thousand meters. There is virtually no competition for Kraken Robotics in this area.

This technology is used wherever precise underwater information is critical to safety or cost. This includes military applications such as mine defense, port surveillance and reconnaissance, but also civilian applications such as the inspection of submarine cables, pipelines, offshore wind farms or oil and gas facilities.

Kraken Robotics combines its sonar systems with autonomous underwater vehicles (AUVs) that can autonomously scan large areas and collect data without the need for a ship to remain directly over the target area at all times. Kraken Robotics builds these AUVs itself and thus covers the entire value chain.

In terms of technology, Kraken operates at the interface between robotics, signal processing, AI-supported data analysis and maritime safety. This area is particularly attractive because the data volumes are highly complex and customers are increasingly demanding complete system solutions including analysis. This is precisely where Kraken Robotics succeeds in moving away from pure, lower-margin hardware sales of AUVs and sensors through software, service and integration.

Strategic takeovers

In order to increase its technological lead and secure its market position, Kraken Robotics has made a number of acquisitions. Here are just a few of the most important acquisitions:

Kraken Power GmbH (2019)

The majority takeover of the German company Kraken Power GmbH kicked off 2019. The company specializes in pressure-tolerant underwater batteries and power electronics, which are crucial for the reliable operation of autonomous systems at great depths. Strategically, Kraken Robotics thus secured a key technology, increased its vertical integration and reduced its dependence on external suppliers.

PanGeo Subsea / PGH Capital (2021)

The acquisition of PanGeo Subsea followed in 2021. PanGeo specializes in high-resolution 3D acoustic imaging of the seabed and subsurface, especially for geological analysis and infrastructure projects. This acquisition significantly expanded Kraken Robotics' technological capabilities beyond pure object recognition and at the same time strengthened its service- and data-driven business model.

13 Robotics (2021)

Also in 2021, Kraken Robotics acquired the Brazilian company 13 Robotics. The focus here is on autonomous underwater vehicles and robotic solutions for offshore energy and the maritime industry. Strategically, this step enabled the expansion of complete end-to-end systems and also gave Kraken Robotics access to the South American market.

3D at Depth (2025)

The most recent and one of the most important acquisitions to date took place in 2025 with the acquisition of 3D at Depth from the USA. The company is a leader in high-precision underwater LiDAR surveying and metrology for offshore infrastructure. This acquisition complements Kraken Robtics' acoustic sonar technology with optical 3D measurement methods, strengthens the high-margin service business and consolidates the company's presence in the strategically important US market.

Q3 2025

In Q3 2025, Kraken Robotics generated revenue of CAD 31.3 million, which corresponds to strong annual growth of around 60% compared to Q3 2024 (CAD 19.6 million).

The revenue growth was mainly driven by higher shipments of underwater batteries and synthetic aperture sonar systems as well as the service contribution following the acquisition of 3D at Depth.

The gross margin improved to around 59%, which is higher than the previous year's figure of around 52% and indicates a more favorable sales mix with higher-margin products and services.

Adjusted EBITDA rose by around 92%,

I repeat by 92%!!!

to around CAD 8.0 million and thus to a margin of around 25%, compared with just over 21% in the prior-year quarter.

Net profit amounted to around CAD 3.3 million, MORE THAN DOUBLE than in the same period of the previous year, while earnings per share remained stable at CAD 0.01.

At the end of the quarter, the company had a cash position of around CAD 126.6 million, significantly more than in the previous year, and total assets grew to around CAD 330.7 million. This offers opportunities for further expansion or acquisitions.

For the full year 2025, management has maintained its forecast for the year, with expected total revenue of between CAD 120 million and CAD 135 million and adjusted EBITDA in the range of CAD 26 million to CAD 34 million.

On the whole, these are solid figures, and I am very pleased that the company is now profitable and can demonstrate both strong growth and increasing margins.

The Rule of 40 for the quarter is a strong 85!

Here is the growth chart...

You can see that growth is continuous and stable and profitability is expected to increase steadily!

Turnover is set to double again in the next two years and net profit is even set to more than double!

Why Kraken Robotics is a multibagger candidate!

As mentioned above, Kraken Robotics is, in my opinion, active in very exciting growth trends and benefits from the expansion of subsea data cable infrastructure, expansion of renewable energy such as offshore wind farms, robotics and increasing military spending.

Data traffic and global internet expansion

A key driver of this market is the massive submarine cable data traffic, which today transports around 97% of global internet traffic via sea routes and is therefore clearly a critical infrastructure.

The global submarine cables market was estimated at around USD 31.7 billion in 2024 and is expected to grow to around USD 44.3 billion by 2030, driven by increasing data transmission and offshore energy networking. This infrastructure must be protected!

One example of this trend is the plan by major technology companies such as Meta to realize a global submarine cable project with an investment of around USD 10 billion to improve data capacity and redundancy - a project for which security for this cable will certainly become crucial once completed.

On this topic, I really enjoyed a video from "What does the world cost", which summarizes the importance of submarine data cables very nicely: https://youtu.be/fU4b7P1TGBE?si=JwAXYAu8G1vAhjE0

Expansion of renewable energies - offshore

As part of the expansion of the offshore energy transition, for example through wind farms at sea, the requirements for underwater infrastructure are also increasing: power and data cables connect wind farms to the mainland and need to be regularly inspected, maintained and protected. This is also contributing to the growth of the market, as these projects are increasing worldwide and require robust subsea cables for power and data.

However, energy sources such as gas are also frequently transported through pipelines and are often indispensable, e.g. Nord Stream certainly comes to mind for us Germans 😔

Events such as the damage to Nord Stream pipelines or submarine cables in northern Europe have shown how vulnerable these systems are and how great the need for monitoring and protection has become - which in turn continues to drive the demand for underwater monitoring technologies.

Defense and military

And that brings us to the military.

In the defense sector, NATO has significantly expanded its activities to secure critical underwater infrastructure in recent years. Initiatives such as NATO Operation Baltic Sentry have been launched to monitor and protect cables, energy and communication routes in the Baltic Sea, in some cases with autonomous systems and surveillance technologies.

At the same time, NATO member states pledged at a 2025 summit to spend around 5% of their GDP on defense and related security issues by 2035 - which indirectly means more funding for technologies to secure critical infrastructure.

At national level, countries such as Denmark are investing several hundred million US dollars to procure specialized surveillance and security vessels as well as drones for monitoring underwater cables and pipelines.

Kraken Robotics already supplies its systems to various NATO navies and defense agencies: These include the Royal Canadian Navy, the Royal Australian Navy, Danish and Polish navies, as well as partners in North America and Europe who use systems for mine countermeasure (MCM), underwater surveillance and infrastructure inspection.

I think that this is actually where the greatest risk lies. If peace is achieved in Ukraine, things could become volatile for Kraken Robotics in the short term. But I assume that the protection of the underwater infrastructure will continue to be expanded even in the event of peace. However, in contrast to pure defense stocks such as Rheinmetall, there is currently no weakness in the share in the latest negotiations.

Underwater robotics

This trend is somewhat derived from the other areas and forms the basis.

Robotics is a clear growth driver. The market for autonomous underwater vehicles, which, according to analyses, was worth around USD 2.7 billion in 2024 and is expected to grow to around USD 5.9 billion by 2030, is a clear sign of rapidly increasing demand for robotics in the sea.

Conclusion

I don't think I need to write much more here: I am convinced by the company. I also see a unique opportunity here to invest in a growth company due to the currently not too large market capitalization. I made my initial purchase at EUR 2.17 and, through various subsequent purchases, I now have a buy-in of just under EUR 2.90 ($PNG (+1,19%) portfolio share of approx. 20% besides $IREN (-5,68%)
$RKLB (-1,59%)
$SOFI (-1,1%)
$HIMS (+2,22%) ). Thanks to Tenbagger2024 who gave a rough introduction to the company here!

Of course, there are risks here, such as a possible peace or the sudden emergence of competitors that have not yet been present and have a technological edge.

In my opinion, the opportunities clearly outweigh the risks: I believe Kraken Robotics is strategically very well positioned to maintain its high growth rate...

With this in mind, I wish you a happy, healthy and successful start to 2026! This analysis has taken a lot of time and I hope you have noticed and experienced added value as a result. Feel free to give me feedback and tell me what else I should pay attention to...

LG KleinAnleger 😊

Sources:

https://www.krakenrobotics.com

https://de.investing.com/news/analyst-ratings/needham-sektor-fur-unbemannte-marinesysteme-steht-vor-ausergewohnlichem-wachstumn-93CH-3283038

https://de.wikipedia.org/wiki/Kraken_Robotics

https://www.finanznachrichten.de/nachrichten-aktien/kraken-robotics-inc.htm

https://www.sharedeals.de/kraken-robotics-aktie-ist-die-euphorie-uebertrieben/

https://www.fortunebusinessinsights.com/de/industrie-berichte/markt-f-r-unterwasser-stromkabel-100478

https://leitz-cloud.com/internetkabel

https://mugglehead.com/de/kraken-robotics-boosts-bought-deal-offering-to-cad45m/

https://finimize.com/content/kraken-robotics-lands-global-deals-and-analyst-praise

and several more 🙃🫣

@Tenbagger2024
@Multibagger
@BamBamInvest
@SAUgut777
@Aktienfox
@All-in-or-nothing
@Shiya
@Hotte1909
@Simpson
@Wiktor_06
@TradingHase
@TomTurboInvest
@Semos25
@Iwamoto
@HoldTheMike
@ImmoHai
@EpsEra

Here is an update on Kraken Robotics and my research into the takeover of the Covelya Group.

With the acquisition of the British Covelya Group for a total value of USD 615 million (financed by USD 480 million in cash and USD 135 million in shares), Kraken Robotics has made the leap from a specialized sensor manufacturer to a vertically integrated company in underwater technology. This takeover is accompanied by a dilution of around 21% of existing shareholders. I will briefly explain how this dilution is to be classified later and what exactly was taken over. I am primarily concerned with how the financial key figures, sales and profit targets and customer landscape have changed. But let's get started:

Who is Covelya? Brief overview

To understand the scale of this acquisition, you need to look at the Covelya Group portfolio. Covelya Group is a group of market-leading maritime technology companies with over 750 employees and twelve locations worldwide.

The subsidiaries include:

• Sonardyne: The heart of the group. Sonardyne is the global market leader in underwater acoustic navigation, positioning and communication. Its technology is the "gold standard" for the offshore energy industry and modern western navies.
• Voyis: Specialists in high-resolution optical sensors and laser scanners that create millimeter-precise 3D models of the seabed and underwater structures (e.g. pipelines).
• Wavefront Systems: Experts in sonar systems for obstacle avoidance and diver detection.
• EIVA: Provider of software and hardware solutions for efficient mapping and surveying of the oceans.

As Covelya is significantly larger than Kraken Robotics, the acquisition also brings numerous well-known customers on board. Covelya's largest customers include Shell, BP, TotalEnergies, ExxonMobile, the US Navy, the Australian Navy, the UK Royal Navy and companies such as Oceaneering. With this acquisition, Kraken Robotics now controls the entire value chain - from sonar/laser systems to maritime navigation and power supply through SeaPower batteries.

Significance - massive expansion of the moat

The market shares following the merger create an almost monopoly-like position in critical segments:

• Underwater Navigation: Kraken/Sonardyne now control an estimated 40% to 60% of the global high-end positioning market.
• Synthetic Aperture Sonar (SAS): (underwater sonar systems)Kraken is the dominant player here with OVER 70% market share.
• Precision inspection: The company now holds around 30 % to 50 % of global capacity in laser scanning.

To reiterate, Kraken Robotics now controls between 30% of the global market for laser scanners and over 70% (!) for sonar systems in all key areas of underwater technology!

After the takeover, there is no comparable company in the underwater technology sector with such a position. By integrating Covelya, Kraken Robotics has created a monopoly in the field of state-of-the-art technology for the oceans.

Although there are many companies that also market a certain part of this technology, there is no competitor that has such control over the entire value chain in this area. This is also reflected in the figures:

The figures: Turnover and profit development until 2028 (estimate)

While Kraken still reported revenue of around USD 70 million in 2024, the merger takes the company to a new level:

• 2025 (preliminary): Approx. USD 115 million (purely organic growth).
• 2026 (+acquisition): Expected turnover of USD 495 million after integration of Covelya. (Almost 300 million of the sales come from Covelya)
• 2027 (estimated): Increase to USD 620 million, driven by stronger integration of Covelya and major orders in the defense sector.
• 2028 (target): The company is targeting the USD 800 million sales mark.

-> from USD 70 million in 2024 to USD 800 million in sales by 2028 is more than a tenfold increase in sales in four financial years!

The EBITDA margin (including the acquisition) is set to rise from 22.7% in 2024 to 25% in 2026 and to over 31% by 2028 thanks to synergy effects of USD 15 million per year.

Despite the dilution caused by the capital increase, earnings per share (EPS) are forecast to double to around USD 0.12 by the end of 2027.

Takeover price

For a purchase price of USD 615 million, Kraken Robotics is securing a company that already generates stable annual sales of around USD 275 million and contributes a strong EBITDA margin of around 28% to its balance sheet. Just for comparison, Kraken Robotics itself did not even generate USD 200 million in sales last year and is not that profitable with a margin of 22.7%.

In terms of valuation, Kraken has benefited extremely here: At an EV/sales multiple of around 2.2x and an estimated takeover P/E of 14 to 16 (based on Covelya's net profit), the price is well below the multiples that Kraken itself has on the market. You have to imagine that.

Covelya is being acquired at a P/E of 14-16 - the stock market would certainly be willing to pay a P/E of 60-70 for the company's organic growth of over 20% and Kraken Robotics' management has recognized this. This valuation arbitrage effect means that Kraken buys "cheap" earnings, which are immediately revalued on the stock market at Kraken's higher growth premium. This not only buys the technology and market share, but also ensures an immediate increase in value.

Dilution of shareholders

In order to finance the acquisition of the Covelya Group, Kraken Robotics carried out a capital increase in March 2026, which resulted in the issue of around 47.4 million new shares. Together with the share component for the sellers, this increases the total number of outstanding shares by approximately 21%, which means a corresponding percentage dilution for existing shareholders. Management itself says that the acquisition is immediately accretive and that this move is considered "accretive" as the massive increase in revenue and EBITDA is expected to fully outweigh the dilutive effect as early as 2027. While the dilution is around 20%, Kraken's revenue will increase by several 100% as a result of the takeover! Although I am of course not super happy that my share in Kraken Robotics has decreased, I see far more opportunities than risks as a result of the massive expansion

Valuation

In terms of valuation, Kraken is currently trading at a P/E ratio (2026e) of approx. 125x (if Covelya's profit is not included). What initially seems high is put into perspective by the enormous profit growth and an EV/EBITDA ratio of around 20x, which in my opinion is justified for a market leader in the high-tech defense sector with well over 30% growth per year. And because profits are rising disproportionately due to the margin increase, the P/E ratio will fall significantly towards 60 in 2027...

Current drivers: situation in Iran

The current security situation, in particular the conflict in Iran and the associated threat to the Strait of Hormuz, has once again made maritime security a priority for NATO countries. The protection of critical infrastructure (pipelines, data cables) is no longer feasible without the autonomous technology of Kraken.

Iran has partially blocked the Strait of Hormuz with sea mines - the use of underwater robots is crucial for the removal of sea mines. This means that the navy soldiers are not exposed to immediate danger, but can defuse the sea mines from a distance...

Conclusion

The acquisition of Covelya makes Kraken Robotics an indispensable company in the western maritime world. With a stable balance sheet (USD 402.5 million gross proceeds from the last capital increase) and a dominant market position, the company is excellently positioned to benefit from the massive increase in investment in maritime sovereignty. Of course, a takeover is always accompanied by risk, as the integration could fail. In my opinion, however, the opportunities here clearly outweigh the risks and I am even more convinced of Kraken Robotics than before. The company is growing strongly and is positioned as a technological leader. I see prices of well over EUR 10 as likely in the near future and will continue to hold the share.

You can find my detailed analysis of Kraken Robotics and other shares in my profile and here:

https://getqu.in/MN4ZFl/

Please let me know what you think about the takeover and whether I have forgotten anything important...

LG small investor 😊

$PNG (+1,19%)