Knightscope, Inc. (KSCP) | Investment Case

1. Company Snapshot

1.a. Company Description

Knightscope, Inc.designs, develops, builds, deploys, and supports physical security technologies in the United States.The company's solutions combine the physical presence of autonomous security robots (ASR) with real-time on-site data collection and analysis, and a human-machine interface to reduce crime.

Its products include K3 and K5 ASRs designed to roam a geo-fenced area autonomously by utilizing numerous sensors and lasers, either on a random basis or based on a particular patrolling algorithm to navigate around people, vehicles, and objects in dynamic indoor or outdoor environments; K1, an ASR for used in indoors or outdoors and at ingress/egress points for both people and vehicles; and K7, a multi-terrain ASR.The company also develops and operates the Knightscope security operations center (KSOC), a browser-based interface, which allows real-time data access service to its clients for alert of an abnormal event; and Knightscope network operations center (KNOC), a custom set of tools that enables it to manage and monitor the network of ASRs with alerts related to critical indicators and statistics, including charging, software, navigation, and temperatures, as well as to execute over-the-air software upgrades, patches, and other related items.In addition, it offers Knightscope+ remote monitoring, an optional service for clients that operate without a fully staffed 24/7 security operations center.

The company serves law enforcement agencies, hospitals, and security teams.Knightscope, Inc.was incorporated in 2013 and is headquartered in Mountain View, California.

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1.b. Last Insights on KSCP

Knightscope's recent performance was negatively impacted by a Q1 loss of $1.28 per share, despite topping revenue estimates. The company's gross margin loss improved to (23%), a notable improvement from (64%) in Q1 2024, but the net loss decreased to $6.9 million, a 19% improvement. The company's revenue of $2.9 million, up 29% compared to $2.3 million in Q1 2024, was not enough to offset the losses.

1.c. Company Highlights

Last Price	4.72
Change Percentage	-4.07%
Open	4.91
Previous Close	4.92
Market Cap ( Millions)	39
Volume	209922
Year High	17.79
Year Low	2.45
M A 50	5.44
M A 200	5.5

FCF Yield	-62.82%
Dividend Yield	0.00%
ROE	-156.57%
Debt / Equity	12.56%
Net Debt / EBIDTA	63.60%
Price To Book	1.82
Price Earnings Ratio	-1.64
Price To FCF	-1.59
Price To sales	3.53
EV / EBITDA	-0.9

2. Knightscope's Q3 2025 Earnings: A Closer Look at Financials and Growth Prospects

Knightscope reported a revenue growth of 23.5% to $3.1 million, driven by an 82% increase in product revenue and a 2% increase in services revenue. However, the company incurred a gross loss of $1.6 million, primarily due to a $600,000 write-off of slow-moving and obsolete inventory. The loss from operations was $9.5 million, resulting from increased operating expenses of 13% to $7.9 million, mainly attributed to R&D investments. The actual EPS came out at -$0.98, relative to estimates at -$0.72.

Publication Date: Nov -30

                                    📋 Highlights
                                    Revenue Growth:
                                                Total revenue increased 23.5% to $3.1 million, driven by 82% product revenue growth and 2% services revenue growth.
Gross Loss:
                                                Recorded a $1.6 million gross loss, primarily due to a $600,000 inventory write-off of slow-moving and obsolete stock.
Operating Expenses:
                                                Rose 13% to $7.9 million, fueled by R&D investments, leading to a $9.5 million loss from operations.
K7 Robot Capabilities:
                                                The upcoming K7 robot features 10 mph speed, off-road terrain navigation, and off-grid operation, targeting military, federal, and border security markets.
Revenue Composition:
                                                ECD devices (existing products) account for 60% of revenue, while the K7 (new product) remains in limited production for H2 2026 launch.

                                

Financial Performance and Margin Analysis

The company's gross margin was negatively impacted by the inventory write-off, highlighting the challenges faced by Knightscope in managing its inventory and scaling its operations. The loss from operations indicates that the company is still in the investment phase, with a focus on R&D and growth initiatives.

Valuation Metrics and Growth Expectations

With a P/S Ratio of 3.42, the market is pricing in significant growth expectations for Knightscope. Analysts estimate next year's revenue growth at 32.2%. The EV/EBITDA ratio of -0.85 suggests that the company's enterprise value is not yet supported by its EBITDA, indicating a high-risk investment. The ROE and ROIC metrics, at -156.57% and -85.83% respectively, highlight the company's current unprofitability.

Product Development and Market Expansion

Knightscope is investing in innovation, with the upcoming launch of the Knightscope K7, which is expected to have advanced features such as higher speeds, light-duty off-road capabilities, and off-grid capabilities. The company is also exploring M&A opportunities to acquire companies with perception AI, audio AI, or sense AI capabilities, indicating a focus on enhancing its technology and expanding its market presence.

Market Potential and Competitive Advantage

William Li mentioned that the guarding industry is a significant market, with the top 3 companies generating $30 billion in revenue and employing 0.5 million humans in the US alone. Knightscope is positioning itself to capture a share of this market by developing autonomous security robots, with a focus on making the US a safer country.

Conclusion on Investment Prospects

While Knightscope's financials are currently challenged, the company's growth prospects and investment in innovation are positive indicators. The market's expectations, as reflected in the valuation metrics, suggest a high-risk, high-reward investment opportunity.

3. NewsRoom

Knightscope, Inc. (KSCP) Q3 2025 Earnings Call Transcript

Nov -19

Source: seekingalpha.com

Knightscope Unveils the All-New K7 Autonomous Security Robot

Nov -13

Source: businesswire.com

Knightscope Reports 24% YoY Revenue Growth for 3Q 2025

Nov -13

Source: businesswire.com

Knightscope, Inc. (KSCP) Reports Q3 Loss, Beats Revenue Estimates

Nov -13

Source: zacks.com

Knightscope Achieves Another $1 Million in New Sales and Renewals Expanding Recurring Revenue Base

Nov -12

Source: businesswire.com

Wall Street Analysts Think Knightscope (KSCP) Could Surge 170.17%: Read This Before Placing a Bet

Oct -22

Source: zacks.com

Knightscope Surpasses Yet Another $1M Milestone in New Sales Won and Renewals

Oct -14

Source: businesswire.com

Strength Seen in Knightscope (KSCP): Can Its 19.0% Jump Turn into More Strength?

Oct -07

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.94%)

6. Segments

Electronic Control Device

Expected Growth: 10.95%

Knightscope's Electronic Control Device growth is driven by increasing demand for autonomous security solutions, government investments in smart city infrastructure, and rising concerns over public safety. Additionally, the device's ability to provide real-time data and analytics, enhancing law enforcement's efficiency and effectiveness, contributes to its rapid adoption.

Autonomous Security Robots

Expected Growth: 10.93%

Increasing demand for autonomous security solutions, driven by rising crime rates and security concerns, coupled with advancements in AI and robotics technology, are fueling growth for Knightscope's autonomous security robots. Additionally, cost savings and efficiency gains from automation are attracting customers, contributing to the 10.93% growth rate.

7. Detailed Products

K1 Autonomous Security Robot

A fully autonomous security robot designed for outdoor security and surveillance, equipped with advanced sensors and AI-powered analytics.

K3 Autonomous Indoor Security Robot

A fully autonomous security robot designed for indoor security and surveillance, equipped with advanced sensors and AI-powered analytics.

K5 Autonomous Security Robot

A fully autonomous security robot designed for outdoor security and surveillance, equipped with advanced sensors and AI-powered analytics.

KSOC (Knightscope Security Operations Center)

A cloud-based security operations center that provides real-time monitoring and analytics for Knightscope's autonomous security robots.

KAI (Knightscope AI)

An AI-powered analytics platform that provides real-time insights and alerts for security threats and anomalies.

8. Knightscope, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Knightscope's autonomous security robots are highly specialized and customized, making it difficult for substitutes to emerge.

Bargaining Power Of Customers

Knightscope's customers are primarily large enterprises and government agencies, which have limited bargaining power due to the customized nature of the company's products.

Bargaining Power Of Suppliers

Knightscope relies on a few key suppliers for its robotic components, giving them some bargaining power, but the company's strong relationships and diversified supply chain mitigate this risk.

Threat Of New Entrants

The autonomous security robot market is rapidly growing, and new entrants with innovative technologies could potentially disrupt Knightscope's market share.

Intensity Of Rivalry

The autonomous security robot market is moderately competitive, with a few established players, but Knightscope's strong brand recognition and patented technology give it a competitive edge.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	22.67%
Debt Cost	3.95%
Equity Weight	77.33%
Equity Cost	14.24%
WACC	11.91%
Leverage	29.32%

11. Quality Control: Knightscope, Inc. passed 4 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Arlo Technologies

A-Score: 4.3/10

Value: 4.9

Growth: 5.7

Quality: 3.7

Yield: 0.0

Momentum: 8.5

Volatility: 3.3

1-Year Total Return ->

Evolv Technologies Holdings

A-Score: 4.2/10

Value: 6.0

Growth: 4.7

Quality: 3.6

Yield: 0.0

Momentum: 9.5

Volatility: 1.7

1-Year Total Return ->

Mistras

A-Score: 4.2/10

Value: 6.8

Growth: 4.3

Quality: 5.5

Yield: 0.0

Momentum: 3.5

Volatility: 5.3

1-Year Total Return ->

Bridger Aerospace

A-Score: 3.7/10

Value: 7.8

Growth: 6.4

Quality: 4.8

Yield: 0.0

Momentum: 2.0

Volatility: 1.0

1-Year Total Return ->

Knightscope

A-Score: 3.2/10

Value: 7.4

Growth: 4.7

Quality: 3.2

Yield: 0.0

Momentum: 3.5

Volatility: 0.3

1-Year Total Return ->

Iveda Solutions

A-Score: 3.1/10

Value: 8.6

Growth: 3.6

Quality: 2.8

Yield: 0.0

Momentum: 3.0

Volatility: 0.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

17.44%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

11.91%

Knightscope, Inc. - US49907V1026

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on KSCP

1.c. Company Highlights

More Volatile

Lower Quality

Average Yield

Earnings Miss

Revenues Miss

Revenues Beats

Weak Momentum

Strong Momentum

Earnings Beats

Cheaper

Fairly Valued

Stable Momentum

2. Knightscope's Q3 2025 Earnings: A Closer Look at Financials and Growth Prospects

Financial Performance and Margin Analysis

Valuation Metrics and Growth Expectations

Product Development and Market Expansion

Market Potential and Competitive Advantage

Conclusion on Investment Prospects

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.94%)

6. Segments

Electronic Control Device

Expected Growth: 10.95%

Autonomous Security Robots

Expected Growth: 10.93%

7. Detailed Products

K1 Autonomous Security Robot

K3 Autonomous Indoor Security Robot

K5 Autonomous Security Robot

KSOC (Knightscope Security Operations Center)

KAI (Knightscope AI)

8. Knightscope, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Knightscope, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

4.72$

Current Price

4.72$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA