Kraken Robotics Inc. saw its shares climb 2.2% to close at C$7.44 on Tuesday, recovering some ground after a 2.0% loss on Friday. The gain came despite a 0.3% drop in the S&P/TSX Composite Index, which fell 92.11 points to 33,741.24, its weakest close since May 5. Trading volume reached 1.48 million shares, with the stock ranging between C$6.85 and C$7.69 during the session.
The move followed no new company disclosures over the long weekend. Kraken’s investor page still features its May 6 memorandum of understanding with SEFINE SISAM as the latest update. That agreement focuses on integrating Kraken’s KATFISH towed sonar system with mission-planning software and developing automatic target recognition for its synthetic aperture sonar, used for high-resolution seabed imaging. Bernard Mills, Kraken’s executive vice-president of defence, said the collaboration aims to enhance the “speed, accuracy, and efficiency” of maritime security operations.
Investors continue to focus on Kraken’s pending C$615 million acquisition of Covelya, a UK underwater technology firm. The deal, announced in March, is structured as C$480 million in cash and C$135 million in shares. Kraken raised C$402.5 million through a public offering of subscription receipts at C$8.50 apiece to help fund the purchase. Those receipts will convert to common shares once the transaction closes. The stock’s Tuesday close of C$7.44 remains below the offering price, suggesting some caution.
The company’s 2026 outlook also supports sentiment. Kraken reported 2025 revenue of C$102.2 million and adjusted EBITDA of C$25.0 million. Management guided 2026 revenue between C$165 million and C$175 million, with adjusted EBITDA of C$40 million to C$50 million, excluding Covelya’s contribution. The guidance reflects growing demand for Kraken’s SeaPower batteries and synthetic aperture sonar systems. In April, the company announced roughly C$28 million in new orders from five clients, including two new customers. CEO Greg Reid noted that Kraken products are integrated or being integrated into more than 30 uncrewed underwater vehicle platforms globally.
Competition in the underwater technology space remains robust. Kongsberg continues to advance its HUGIN autonomous underwater vehicle, which incorporates synthetic aperture sonar for commercial, scientific, and defense applications. Teledyne Marine offers the Gavia, Osprey, and SeaRaptor AUVs, while Thales provides sonar and data-processing solutions for anti-submarine warfare and mine countermeasures.
Risks persist. Delays in closing the Covelya deal, regulatory hurdles, or slower-than-expected defense order conversions could pressure the stock. Higher bond yields also pose a risk to growth stocks by reducing the present value of future earnings. Kraken shares remain well below their 52-week high of C$10.72. The key test will be whether the company can convert its backlog and deal pipeline into revenue quickly enough to justify current valuations.
