Financial Data and Key Metrics Changes - In Q2 2025, total revenue increased by 31.8% to $7 million from $5.3 million in Q2 2024 [36] - Operating income decreased by 19.5% to $1.1 million compared to $1.4 million in Q2 2024 [41] - Gross profit margin decreased to 64.1% from 70.2% in the same quarter last year [37] - Net income after tax was $900,000 or $0.08 per diluted share, down from $1.4 million or $0.13 per diluted share in Q2 2024 [41] Business Line Data and Key Metrics Changes - The marine technology business generated revenue of $3.9 million, a 10% increase from $3.5 million in Q2 2024 [36] - The marine engineering business revenue increased by 2.3% to $1.84 million from $1.8 million [36] - The newly acquired Precision Acoustics Limited contributed 18.5% to consolidated revenue and 13.4% to operating income [17] Market Data and Key Metrics Changes - Hardware sales to Asia rose by approximately 105%, reaching $2.2 million compared to $1.1 million in Q2 2024 [14] - The marine technology business accounted for 55.3% of total consolidated revenue in Q2 2025 [7] Company Strategy and Development Direction - The company is focusing on increasing market share in underwater imaging sensors, particularly in the defense sector [9] - The launch of the NanoGen series aims to address smaller underwater vehicles and enhance market opportunities [11][23] - The company is pursuing a multi-year, multi-sales model for its marine technology business, particularly with the DAVID product line [46] Management's Comments on Operating Environment and Future Outlook - Management noted a strong level of inquiries in the marine technology business, particularly for the Echoscope technology [50] - The company is optimistic about the utilization of its rental fleet and ongoing rentals for longer periods [15] - Management acknowledged the impact of the weakening US dollar on operating costs and gross profit margins [43] Other Important Information - The company is under contract for five development programs related to the DAVID system, focusing on integration with existing equipment [55] - The company plans to continue its M&A strategy but has paused new acquisitions until the global policy environment stabilizes [46] Q&A Session Summary Question: What led to the stronger than expected second quarter demand from Marine Products? - Management observed strong inquiries around Echoscope technology, particularly from Asia, and a pickup in DAVID program sales [50] Question: Timing for the new NanoGen release and customer feedback? - The NanoGen series is expected to launch after trials at the end of the month, addressing the needs of smaller underwater vehicles [51][52] Question: Expected gross margin percentage for the back half of the year? - Management expects gross margins to improve in the second half, returning to typical levels around 70% [68] Question: Revenue contribution from the delivery of 16 DAVID untethered systems? - The delivery of 16 units is expected to generate around $800,000 in revenue [78]

Financial Data and Key Metrics Changes - In Q2 2025, total revenue increased by 31.8% to $7 million from $5.3 million in Q2 2024 [36] - Operating income decreased by 19.5% to $1.1 million compared to $1.4 million in Q2 2024 [40] - Gross profit increased to $4.5 million, but gross margin decreased to 64.1% from 70.2% in the prior year [37][41] - Net income after tax was $900,000 or $0.08 per diluted share, down from $1.4 million or $0.13 per diluted share in Q2 2024 [41] Business Line Data and Key Metrics Changes - The marine technology business generated $3.9 million in revenue, a 10% increase from $3.5 million in Q2 2024 [36] - The marine engineering business saw a revenue increase of 2.3% to $1.84 million [36] - The newly acquired Precision Acoustics Limited contributed 18.5% to consolidated revenue and 13.4% to operating income [17][36] Market Data and Key Metrics Changes - Hardware sales to Asia rose by approximately 105%, reaching $2.2 million compared to $1.1 million in Q2 2024 [14] - The marine technology business accounted for 55.3% of total consolidated revenue in Q2 2025 [6] Company Strategy and Development Direction - The company is focusing on increasing market share in underwater imaging sensors, particularly in the defense sector [9] - The launch of the NanoGen series is aimed at addressing smaller underwater vehicles and enhancing market opportunities [11][24] - The company is pursuing a multi-year, multi-sales model for its marine technology business [47] Management's Comments on Operating Environment and Future Outlook - Management noted a challenging global policy environment but expressed optimism about increasing inquiries and rental utilization [5][15] - The company is focused on executing its growth strategy and adapting to changes in the defense market [46] Other Important Information - The company is under contract for five development programs related to the DAVID system, which integrates with existing diving equipment [55][58] - The company has paused its M&A strategy until the global policy environment stabilizes [47] Q&A Session Summary Question: What led to the stronger than expected second quarter demand from Marine Products? - Management noted strong inquiries around Echoscope technology, particularly from Asia, and a pickup in DAVID program sales [50] Question: What is the expected timing for the new NanoGen release? - The NanoGen series is on the cusp of release, with trials expected to conclude by the end of June [52] Question: Can you provide a range of sizes for the development programs? - The five programs primarily focus on integrating the DAVID system with existing underwater breathing apparatus equipment [55] Question: What progress is CODA making in securing design wins for next-generation underwater vehicles? - Management indicated ongoing evaluations and integration of Echoscope technology into various defense programs [60] Question: Should gross margin percentages be modeled for the back half of the year? - Management expects gross margins to improve in the second half of the year, returning to typical levels [70] Question: What revenue contribution might the delivery of 16 DAVID untethered systems generate? - The expected revenue from delivering 16 units is around $800,000 [78]

Financial Performance - Net revenues for the three months ended April 30, 2025, were $7.02 million, a 31.9% increase compared to $5.32 million for the same period in 2024[11]. - Gross profit for the six months ended April 30, 2025, was $7.93 million, up 16.1% from $6.83 million in the same period of 2024[11]. - Net income for the three months ended April 30, 2025, was $908,762, a decrease of 36% from $1.42 million in the same period of 2024[11]. - Net income for the six months ended April 30, 2025, was $1,821,737, compared to $2,045,126 for the same period in 2024, reflecting a decrease of approximately 11%[16]. - For the six-month period ended April 30, 2025, combined net revenue was $12,227,174, a decrease of 1.1% compared to $12,362,291 for the same period in 2024[59]. - Total net revenues for the three months ended April 30, 2025, were $7,017,459, with the Marine Technology Business contributing $3,878,090[96]. - Gross profit for the three months ended April 30, 2025, was $4,497,281, reflecting a gross margin of approximately 64.1%[96]. - For the six months ended April 30, 2025, total net revenues reached $12,227,174, representing a significant increase compared to $9,784,369 for the same period in 2024, indicating a growth of approximately 25%[109]. Assets and Equity - Total assets increased to $60.59 million as of April 30, 2025, up from $57.54 million as of October 31, 2024, representing a growth of 3.57%[7]. - Total stockholders' equity rose to $55.89 million as of April 30, 2025, compared to $53.13 million as of October 31, 2024, indicating an increase of 5.2%[10]. - Cash and cash equivalents increased to $24.46 million as of April 30, 2025, from $22.48 million as of October 31, 2024, marking an 8.8% increase[7]. - The company’s total fixed assets, net, as of April 30, 2025, were $7,204,814, a slight decrease from $7,236,161 as of October 31, 2024[48]. - Total cash and cash equivalents at the end of the period on April 30, 2025, was $24,462,301, up from $23,709,676 at the end of April 2024[16]. Expenses - Research and development expenses increased to $1.23 million for the six months ended April 30, 2025, compared to $1.03 million in 2024, reflecting a rise of 19.8%[11]. - Total operating expenses for the three months ended April 30, 2025, were $3,409,597, a 43% increase from $2,388,051 in 2024[12]. - Commission costs for the three-month period ended April 30, 2025, were $390,384, compared to $132,222 for the same period in 2024, reflecting a significant increase of 195%[41]. - The company reported total operating expenses of $3,409,597 for the three months ended April 30, 2025[96]. Acquisition and Growth - The company acquired Precision Acoustics Limited (PAL) for $6,538,569 in cash, with a net cash outlay of $4,605,285 after accounting for PAL's cash balance[57]. - In the current quarter, PAL contributed revenues of $1,299,069 and earnings before tax of $173,871 to the consolidated results[59]. - The acquisition of PAL includes contingent consideration arrangements with revenue targets of $5,334,584 for FY 2025 and $5,867,914 for FY 2026[62]. - The company acquired the Acoustics Sensors and Material Business on October 29, 2024, which is expected to enhance its product offerings and market reach[105]. Cash Flow - Cash provided by operating activities for the six months ended April 30, 2025, was $2,103,980, a significant improvement compared to cash used in operating activities of $(1,253,725) in 2024[16]. - The company reported a net cash increase of $1,983,229 for the six months ended April 30, 2025, compared to a decrease of $(739,165) in the same period of 2024[16]. Revenue Recognition - Revenue from the Marine Technology Business is recognized upon delivery and passing of risks, with contracts often requiring advance customer payments[24][25]. - The Engineering Business recognizes revenue based on the percentage of completion method, measured by costs incurred to date relative to estimated total costs[34]. Other Financial Metrics - The company’s effective tax rate for the three months ended April 30, 2025, was 28.2%, up from 17.2% in the same period of 2024[113]. - The company recognized a foreign currency translation adjustment of $87,375 for the six months ended April 30, 2025[16]. - The company reported total other income for the six months ended April 30, 2025, was $450,764, a decrease of 13.0% from $518,392 for the same period in 2024[50].

Core Insights - Coda Octopus Group, Inc. reported a significant revenue increase of 31.8% in its fiscal second quarter 2025, reaching approximately $7.0 million compared to $5.3 million in the same quarter of the previous year [2][6][8] Financial Performance - Total revenue for SQ2025 was approximately $7.0 million, up from $5.3 million in SQ2024, marking a 31.8% increase [6] - Revenue from the Marine Technology Business was $3.9 million, a 10.0% increase from $3.5 million in SQ2024 [6] - Marine Engineering Business revenue increased to $1.84 million, a 2.3% rise from $1.80 million in SQ2024 [6] - The Acoustics Sensors and Material segment generated $1.3 million in revenue, with no prior comparative data available [6] - Gross profit was $4.5 million, up from $3.7 million in SQ2024, with a gross margin of 64.1% compared to 70.2% in SQ2024 [6] - Operating income decreased to $1.1 million, down 19.5% from $1.4 million in SQ2024, with an operating margin of 15.5% [6][13] - Net income after taxes was $0.9 million, a decrease of 35.8% from $1.4 million in SQ2024, with diluted earnings per share at $0.08 compared to $0.13 in SQ2024 [6][13] Business Developments - The company received orders for the DAVD tethered system valued at $1.53 million, expanding its user base to around 12 Navy Commands [3] - The company expects to deliver 16 DAVD untethered systems for integration into the MK16 Underwater Breathing Apparatus system during the third fiscal quarter of 2025 [4] - The DAVD technology is undergoing various evaluation programs, confirming its effectiveness in dive operations and enhancing its adoption potential [5] - The Echoscope technology has been recognized for its improvements in underwater imaging and object detection capabilities [6] Market Outlook - The company anticipates increased defense spending in Europe and the UK, which is expected to favor its business [9] - The transition in U.S. energy policy towards domestic oil and gas production is believed to benefit the company's products and solutions, offsetting potential revenue losses from offshore renewables [8]

Company Overview - Coda Octopus Group, Inc. is a global leader in real-time 3D/4D/5D and 6D imaging sonar technology for subsea intelligence and augmented reality diving technology [4] - The company was founded in 1994 and provides hardware and software solutions for the underwater/subsea market, including proprietary imaging sonars and diving technology [4] Upcoming Conference Call - The company will host a conference call on June 16, 2025, at 10:00 a.m. Eastern time to discuss its fiscal second quarter results for the period ending April 30, 2025 [1][2] - A press release detailing the results will be issued before the market opens on the same day [2] Technology and Products - Coda Octopus's Echoscope technology generates real-time 3D/4D/5D images of underwater objects, even in zero visibility conditions, and is used in various applications including mapping, salvage, and offshore renewables [4] - The newly launched Diver Augmented Vision Display (DAVD) system integrates sonar technology and allows for improved communication and visualization between topside control and divers [5] Recent Acquisition - The company recently acquired Precision Acoustics Limited, enhancing its capabilities in acoustics sensor and materials [6] Defense Engineering Businesses - Coda Octopus operates two defense engineering businesses, Coda Octopus Martech Ltd and Coda Octopus Colmek, which supply sub-assemblies for mission-critical programs as subcontractors [7]

Core Viewpoint - Coda Octopus Group, Inc. has received a significant order for its DAVD tethered systems bundled with the Echoscope, valued at $1.5 million, from various U.S. Navy Commands, highlighting the Navy's commitment to adopting this technology for subsea operations [1][2]. Group 1: Order and Technology Adoption - The recent order confirms the ongoing rollout and adoption of DAVD technology within the U.S. Navy, with the Echoscope PIPE real-time 3D Volumetric Sonar being a crucial part of the DAVD solution for diving and underwater inspections [2]. - The DAVD Tethered System is currently operational across nine naval commands, and this order will expand the user community, accelerating the technology's adoption curve [2]. - This order builds on a previous order in March 2025 for 16 DAVD Untethered Systems intended for the Special Operations Command, which represents the largest addressable market for this technology [2]. Group 2: Future Developments and Market Expansion - The company aims to attract adoptees of DAVD technology from foreign navies and the commercial sector, following the successful delivery of a new generation Head-Up-Display (HUD) to the U.S. Navy [3]. - The new HUD design features a 200% increase in resolution and an expanded field of view, improving compatibility with specialized dive helmets and masks, thus unlocking new market opportunities [3]. - The DAVD system is a fully integrated solution that allows topside control and diver HUD systems to share critical information, enabling operations in zero visibility conditions, which is a common challenge in diving operations [5]. Group 3: Company Overview and Product Offerings - Coda Octopus Group, founded in 1994, supplies a range of hardware and software solutions to the underwater/subsea market, including proprietary real-time 4D/5D/6D imaging sonars marketed under the name Echoscope [4]. - The Echoscope technology is utilized globally for various applications, including underwater mapping, subsea intervention, and marine construction, among others [4]. - The company also operates two defense engineering businesses that supply sub-assemblies for mission-critical programs, providing opportunities for repeat orders throughout the life of these programs [6].

Core Viewpoint - Coda Octopus Group, Inc. has received a significant order for sub-components from a long-term customer, indicating a positive outlook for its Defense Engineering Services Business as Europe increases defense spending and expedites defense programs [1][2]. Company Overview - Coda Octopus Group, Inc. is a supplier to the underwater/subsea market, providing hardware and software solutions, including proprietary real-time 4D/5D/6D imaging sonars and the Diver Augmented Vision Display (DAVD) system [3]. - The Echoscope technology is utilized globally for various applications in both commercial offshore and defense underwater markets, including complex mapping, subsea intervention, and marine construction [3]. - The DAVD system integrates sonar technology, enabling dive operations in zero visibility conditions, which is a common challenge in diving operations [4]. Recent Developments - The company has acquired Precision Acoustics Limited, a leader in the ultrasound and acoustic measurement field, enhancing its capabilities in medical imaging and Non-Destructive Testing (NDT) [5]. - Coda Octopus Group operates two defense engineering businesses: Coda Octopus Martech Ltd in the UK and Coda Octopus Colmek, Inc. in the U.S., focusing on supplying sub-assemblies for mission-critical programs [6].

Core Viewpoint - Coda Octopus Group, Inc. has received two orders totaling $1.3 million from the US Government for proprietary parts used in a critical Defense program, indicating a positive trend in easing delays in U.S. Defense Programs since fiscal year 2024 [1][2]. Company Overview - Coda Octopus Group, founded in 1994, specializes in advanced underwater technologies, providing hardware and software solutions including 4D/5D/6D imaging sonars like Echoscope® and Echoscope PIPE® [3]. - The company also offers the Diver Augmented Vision Display (DAVD) system, which enhances diving operations by integrating sonar technology for use in zero visibility conditions [4]. Recent Developments - The recent orders from the US Government are significant as they are contracted directly with Coda Octopus, potentially leading to more direct contract opportunities [2]. - The Engineering Business aims to restore its revenue to pre-COVID levels of $10 million, supported by increasing programs for proprietary sub-components and tactical mission computers [2]. Acquisitions and Expansion - Coda Octopus recently acquired Precision Acoustics Limited, a leader in ultrasound and acoustic measurement, enhancing its capabilities in medical imaging and Non-Destructive Testing (NDT) [5]. - The company operates two defense engineering businesses, Coda Octopus Martech Ltd and Coda Octopus Colmek, which supply sub-assemblies for broader mission-critical programs, contributing to a long-tail recurring revenue profile [6].

Financial Data and Key Metrics Changes - In Q1 2025, total revenue increased by 16.8% to $5.2 million from $4.5 million in Q1 2024 [34][35] - Operating income rose by 19.2% to $0.7 million compared to $0.6 million in Q1 2024 [40] - Net income after taxes was $0.91 million or $0.08 per diluted share, up from $0.6 million or $0.06 per diluted share in Q1 2024 [41] Business Line Data and Key Metrics Changes - Marine Technology business revenue decreased by 35.8% to $2.3 million from $3.5 million in Q1 2024 [35] - Engineering business revenue increased by 77% to $1.6 million from $0.9 million in Q1 2024 [12] - Acoustic Sensors & Materials business generated $1.3 million in revenue, contributing 25.2% to consolidated revenue [36][43] Market Data and Key Metrics Changes - The Marine Technology business faced significant headwinds due to U.S. policy changes affecting offshore renewables, leading to weak demand [9][10] - Increased defense spending in Europe, particularly Germany's expected $428 billion, is anticipated to favor the company's products in the medium to long term [11][12] Company Strategy and Development Direction - The company aims to pivot the revenue model of the Marine Technology business to a multi-year, multi-sales model [47] - Focus on increasing the number of defense programs that utilize the company's technologies, particularly Echoscope and DAVD [28][30] - The acquisition of Precision Acoustics is seen as a strategic move to compete for larger defense contracts [31][32] Management's Comments on Operating Environment and Future Outlook - Management expects a quieter Q2 due to customer standstill amid uncertain policy environments, but anticipates a robust Q3 and Q4 [52][55] - The company is optimistic about the long-term impact of increased defense spending in Europe and the U.S. [46][47] Other Important Information - The company has $22.54 million in cash and cash equivalents with no debt as of January 31, 2025 [42] - The gross margin for the Acoustic Sensors & Materials business is expected to be between 57% and 61% on an annualized basis [38] Q&A Session Summary Question: What needs to happen for marine products to recover? - Management noted that customers are currently on standstill due to uncertainty, expecting a quiet Q2 but a robust Q3 and Q4 [52][55] Question: Timeline for tethered and untethered markets? - Management targets $4 million to $4.5 million in revenues for DAVD this year, with significant demand for both tethered and untethered systems [57][60] Question: Impact of market conditions on acoustic solutions? - The acoustic solutions market appears stable, with no significant slowdown observed [72] Question: Status of potential acquisition? - The company is focused on one target for acquisition, pending further understanding of the global policy environment [80][84]

Financial Data and Key Metrics Changes - In Q1 2025, total revenue increased by 16.8% to $5.2 million from $4.5 million in Q1 2024 [34][35] - Operating income rose by 19.2% to $0.7 million compared to $0.6 million in Q1 2024 [40] - Net income after taxes was $0.91 million or $0.08 per diluted share, up from $0.6 million or $0.06 per diluted share in Q1 2024 [41] Business Line Data and Key Metrics Changes - Marine Technology business revenue decreased by 35.8% to $2.3 million from $3.5 million in Q1 2024 [35] - Engineering business revenue increased by 77% to $1.6 million from $0.9 million in Q1 2024 [12] - Acoustic Sensors & Materials business, added in October 2024, generated $1.3 million in revenue, contributing 25.2% to consolidated revenue [13][36] Market Data and Key Metrics Changes - The Marine Technology business faced significant headwinds due to U.S. policy changes affecting offshore renewables, leading to weak demand [9][10] - Increased defense spending in Europe, particularly Germany's expected $428 billion over the coming years, is seen as a favorable factor for the company [11] Company Strategy and Development Direction - The company aims to pivot its revenue model in the Marine Technology business to a multi-year, multi-sales model, particularly with the DAVD product line [47] - The acquisition of Precision Acoustics is expected to enhance the company's competitiveness for larger defense contracts [31][32] Management's Comments on Operating Environment and Future Outlook - Management anticipates a quieter Q2 due to customer hesitance amid uncertain policy environments, but expects a robust Q3 and Q4 [52][53] - The company remains optimistic about long-term growth opportunities due to increased defense spending in Europe and the U.S. [46] Other Important Information - The company has $22.54 million in cash and cash equivalents with no debt as of January 31, 2025 [42] - The gross margin for the Acoustic Sensors & Materials business is expected to be between 57% and 61% on an annualized basis [38] Q&A Session Summary Question: What needs to happen for marine products to recover? - Management noted that customers are currently on standstill due to uncertainty, expecting a quiet Q2 but a robust Q3 and Q4 [52][53] Question: Timeline for tethered and untethered markets? - The company targets $4 million to $4.5 million in revenues for the DAVD system this year, with significant demand for both tethered and untethered systems [57][59] Question: Impact of market conditions on acoustic solutions? - The Precision Acoustics segment appears stable and less exposed to market fluctuations compared to other sectors [72] Question: Status of potential acquisition? - The company is conducting due diligence on one target but is waiting for the global policy environment to stabilize before proceeding [80][84]