October 2026 — Update to our August 7, 2025 article
When we wrote our original article, “Kraken Robotics – NATO Navy supplier is moving up the ladder with massive, undersea battery facility!”, one of the most important pieces of our investment thesis was Kraken Robotics' planned 60,000-square-foot SeaPower™ battery manufacturing facility in Nova Scotia.
At the time, it was still a plan.
Today, it is becoming an operating asset — and Kraken Robotics itself has evolved into a considerably larger company.Kraken Robotics Update: The Battery Expansion We Were Waiting For
From Promise to Production
In August 2025, Kraken had committed approximately C$10 million to establish the Nova Scotia facility. Management expected it to substantially increase SeaPower battery manufacturing capacity and ultimately help bring total potential battery production toward C$200 million annually.
That expansion is no longer theoretical.
Kraken subsequently confirmed completion of the new Nova Scotia manufacturing facility, and in March 2026 CEO Greg Reid said battery manufacturing there was coming online.
The company's April investor presentation subsequently identified Halifax, Nova Scotia and Rostock, Germany as its battery manufacturing locations.
This gives Kraken something increasingly important in the rapidly expanding autonomous-underwater market:
Significant SeaPower battery manufacturing capability on both sides of the Atlantic.
And The Customers Are Arriving
Capacity means little without demand.
This is where the story becomes particularly interesting.
In January 2026, Kraken announced C$35 million in SeaPower battery sales to three customers.
In March, Kraken announced another approximately C$24 million of defence orders across SeaPower batteries, KATFISH and Kraken SAS.
In April, another C$28 million in SeaPower battery and SAS orders followed, involving five customers. Kraken said its technology was then integrated, or being integrated, into more than 30 different UUV platform types worldwide.
The company has therefore moved well beyond proving that SeaPower works.
It is increasingly about scaling production.
The XL-UUV Development May Be Even More Important
One development since our original article deserves particular attention.
Kraken has signed a long-term Master Supply Agreement with a major international conglomerate developing extra-large unmanned underwater vehicles — XL-UUVs.
The customer has not been publicly identified.
That means we should not speculate that it is any particular defence contractor.
But the size of these underwater vehicles helps explain why this opportunity matters.
Kraken's April 2026 investor material indicated that an XL-UUV can contain approximately 50–60 of its 20-kWh SeaPower battery modules.
That changes the economics considerably.
A future in which large autonomous submarines are produced in meaningful numbers could require substantially more battery capacity than today's smaller UUV market.
And Kraken has been building the manufacturing infrastructure to participate in exactly that market.
A Better Battery Opens Another Market
Kraken has also introduced a more compact SeaPower architecture offering approximately a 30% improvement in energy density.
That is strategically important because SeaPower is no longer aimed principally at very large underwater vehicles.
The new architecture allows Kraken to address small and medium-sized UUVs as well.
Kraken therefore potentially participates across much of the autonomous underwater spectrum:
Small UUV → Medium UUV → Large UUV → XL-UUV
For an investor, this may ultimately be more important than any single battery contract.
Kraken is attempting to become an enabling technology supplier to the broader underwater-autonomy industry.
Kraken Is No Longer The Company We Wrote About In August 2025
There has been another major change.
Kraken completed its acquisition of Covelya Group in July 2026.
That brought businesses including Sonardyne, EIVA, Voyis, Wavefront Systems and others into the organization.
Kraken's technology portfolio now spans much more of the underwater stack:
| Capability | Kraken/Covelya exposure |
|---|
| Subsea power | SeaPower batteries |
| Synthetic Aperture Sonar | Kraken SAS |
| Mine hunting | KATFISH |
| Underwater navigation | Sonardyne |
| Acoustic positioning & communications | Sonardyne |
| Mission/survey software | EIVA |
| Optical subsea imaging | Voyis |
| Intruder detection & forward-looking sonar | Wavefront |
| Subsea services/LiDAR | 3D at Depth |
This is a very different company from the relatively specialized Canadian ocean-technology business we originally followed.
The Numbers Are Scaling Too
Kraken reported C$102.2 million of revenue and C$25.0 million of Adjusted EBITDA for 2025.
Following the Covelya acquisition, management's 2026 guidance increased dramatically.
Kraken currently expects:
Revenue: C$290–C$320 million
Adjusted EBITDA: C$65–C$75 million
Adjusted EBITDA margin: approximately 22%–23%
Perhaps even more significant, by the end of Q2 Kraken and Covelya had announced approximately C$355 million of combined 2026 orders.
This does not mean C$355 million automatically becomes 2026 revenue. Order timing and revenue recognition matter.
But it demonstrates the scale of the opportunity now confronting the company.
Why The Nova Scotia Plant Matters More Today Than It Did In 2025
When we first wrote about the plant, we viewed it primarily as a capacity expansion.
Today we see it somewhat differently.
It is potentially a strategic piece of North American allied-defence manufacturing infrastructure.
Kraken can manufacture subsea batteries in Canada while maintaining its European battery operation in Germany.
That provides geographic diversification and puts production closer to North American customers at precisely the time when autonomous maritime systems are becoming increasingly important to Western defence planning.
And the plant includes multiple pressure-testing tanks rated to 6,000 metres.
This is specialized infrastructure, not a conventional battery assembly operation.
Our Investment Thesis Has Evolved
Our original thesis was relatively simple:
Kraken possessed excellent subsea sonar and battery technology and was positioned to benefit from growing NATO and commercial demand for autonomous underwater systems.
We believe the thesis has broadened considerably.
Kraken is increasingly becoming a subsea technology platform supplying many of the technologies required to make autonomous underwater systems work:
POWER → NAVIGATION → COMMUNICATION → SONAR → IMAGING → SOFTWARE → DATA
The Nova Scotia SeaPower facility fills an especially important part of that stack: power and endurance.
Without sufficient energy storage, an autonomous underwater vehicle cannot stay underwater longer, travel farther or carry increasingly sophisticated sensor payloads.
That makes battery technology a potentially valuable technological chokepoint.
What We Are Watching Now
The next question is no longer:
“Will Kraken build the Nova Scotia battery plant?”
It has.
The questions for shareholders now become:
How quickly will production ramp?
How much of the potential C$200 million annual battery capacity can Kraken utilize?
Will the XL-UUV supply agreement turn into large recurring production orders?
How quickly will new small- and medium-UUV customers adopt the higher-density SeaPower architecture?
And finally:
Can Kraken successfully integrate Covelya while maintaining the growth and margins investors now expect?
Those are the metrics that should increasingly determine the investment case through 2027 and 2028.
Investment Perspective — October 2026
Our August 2025 article described a promising Canadian defence-technology company investing aggressively ahead of anticipated demand.
Fourteen months later, several pieces of that thesis have materially advanced.
The Nova Scotia battery plant has been completed.
SeaPower orders have increased.
Kraken has gained additional defence customers.
Its technology is being integrated across more than 30 UUV platform types.
A long-term battery agreement has been signed with a manufacturer developing XL-UUVs.
And the Covelya acquisition has transformed Kraken into a substantially larger international subsea-technology company.
There are still important risks: Covelya integration, execution, working-capital requirements, contract timing, defence procurement delays and the challenge of filling newly installed manufacturing capacity.
But there is an important distinction between the Kraken story of August 2025 and the Kraken story today:
In 2025, investors were largely buying the expectation of scale.
In late 2026, we are beginning to see that scale being built and commercialized.
Ed Note
We originally added to our PNG position on August 7, 2025 because we believed Kraken was sitting at the intersection of several long-duration trends: NATO naval modernization, autonomous underwater vehicles, mine warfare, subsea infrastructure protection and offshore energy.
The opening of the Nova Scotia SeaPower manufacturing operation strengthens that thesis.
In our view, the next major milestone is not another factory announcement.
It is utilization.
If Kraken can progressively fill this new battery capacity with recurring UUV and particularly XL-UUV production orders, the Nova Scotia facility could become one of the more important growth assets inside the expanded Kraken organization.
That is what we will be watching closely through 2027.
Further: the connections between the new German made subs being stationed in Halifax NS with Canada's East Coast Navy, the German battery manufacturing plant, The idea that these subs will eventually be "command platforms" for XLUUV clusters, and the fact that the Arctic is a major concern of CAF cannot be ignored either.
Currently there is no factual evidence for these connections however, I have learned over many years that, "If it walks like a duck, swims like a duck and quacks like a duck, It's probably a duck!
We've been busy adding to our position!
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