Kraken Robotics posted record revenue in its third quarter, driven by demand from militaries and offshore energy projects, including for subsea batteries and mine-hunting sonar systems.

In its financial results for the three months ended Sept. 30, Kraken, which trades on the TSX Venture Exchange, said the third quarter saw it bring in $20.2 million of revenue, compared to $12.3 million for the same period the year earlier. Earnings before interest, taxes, depreciation and amortization were $4.4 million for the quarter and $8.4 million year-to-date.

Management at the St. John’s maker of subsea robots and sensor platforms doubled down on guidance suggesting the company will soon present investors with a banner year-end report, projecting between $66 million and $72 million of revenue. They added the company has now paid off virtually all of the debt on its balance sheet, including debt related to its $14 million purchase of fellow Newfoundland and Labrador bluetech startup PanGeo Subsea in 2021.

“With Q3 being our strongest quarter in history and Q4 expected to show further improvement, we are on track to hit our financial guidance for 2023,” said CEO Greg Reid. “More importantly, we are confident that our momentum will continue in 2024 as our sonar and subsea power businesses are seeing strong growth opportunities."

In the management comments section of their quarterly report, Kraken’s brass wrote they have seen growing demand for unmanned submarines and towable sonar units from militaries around the world; the company has deals with the Australian and Canadian navies, among others. The emergence of ever-larger unmanned vehicles on the market is also driving demand for Kraken’s SeaPower UAV, autonomous underwater vehicle, battery.

“Many countries and navies around the world are in various stages of upgrading their subsea surveillance equipment, with underwater solutions such as towed sonar or Autonomous Underwater Vehicles that are deployed from crewed or Uncrewed Surface Vessels,” said the company. “Kraken’s technology portfolio and product and service offering are well positioned to ride this demand wave.

“Our second largest market, offshore wind, has seen continued solid demand for sub-seabed services. The offshore wind and offshore oil and gas market represents 15-20% of our overall revenue stream.”

Originally called AquaPix and spun off from Marport Deep Sea Technologies, another bluetech company, Kraken was founded by former Canadian Navy officer Karl Kenny in 2012 and IPO’d in 2015. Shares have risen to 65 cents on the earnings news, continuing a rally that started at about 36 cents in September. The company now has a market capitalization of about $134 million.

Kraken, which offers clients “robotics as a service,” in addition to selling hardware, has announced another $4 million of new contracts since it released its earnings four days ago — a $1 million deal to map buried subsea pipelines for an unnamed buyer and a $3 million seabed mapping project.

The news builds on a series of good years for Kraken, which in 2022 was the top performing technology sector company on the TSX Venture, according to the exchange’s yearly Venture 50 rankings. The list considers movements in businesses’ share prices, market capitalizations and trading volumes, and Kraken was the only Atlantic Canadian business to make an appearance.