Company Overview - Coda Octopus Group, Inc. (CODA) is a multi-division underwater technology platform that specializes in real-time volumetric sonar systems [1] - The company offers devices and is developing the upcoming PIPE series, along with patented augmented-reality solutions for professional divers [1] Technology and Products - CODA's product lineup includes advanced sonar systems and augmented-reality solutions designed for enhancing the capabilities of professional divers [1]

Financial Data and Key Metrics Changes - The company reported total revenue of $7.1 million for Q3 2025, a 29% increase from $5.5 million in Q3 2024 [26] - Gross profit for Q3 2025 was $4.8 million, compared to $4.0 million in Q3 2024, with a consolidated gross margin of 68.3% versus 73.9% in the previous year [27] - Operating income decreased slightly to $1.38 million in Q3 2025 from $1.39 million in Q3 2024, resulting in an operating margin of 19.5% compared to 25.4% [29][30] Business Line Data and Key Metrics Changes - The marine technology business generated $4.0 million in revenue, a 30.7% increase from $3.0 million in Q3 2024, accounting for 56.4% of total net revenue [4][26] - The marine engineering business saw a revenue decline of 33.2%, generating $1.6 million compared to $2.4 million in Q3 2024 [10][26] - The newly acquired Precision Acoustics Ltd contributed 20.6% to net revenue and 18% to operating income in Q3 2025 [11][26] Market Data and Key Metrics Changes - The marine technology business's hardware sales increased by 103.6% to $2.7 million, while rental assets were underutilized, impacting gross profit margins [9][27] - The company noted a decrease in hardware sales to Asia by approximately 27.9%, which affected commission costs [9] Company Strategy and Development Direction - The company is focusing on increasing market share in the defense sector for underwater imaging sensors, particularly with the Echoscope technology [6][7] - The launch of the NanoGen series sonars aims to address the growing demand for smaller underwater vehicles and platforms [15][19] - The company is pursuing an M&A strategy to enhance its capabilities and diversify its revenue streams [33] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the global policy environment but expressed confidence in the growth strategy and progress made in key milestones [4][32] - The company is optimistic about the potential for increased revenue from the DAVD product line, projecting $4 million in revenue for the fiscal year [38][46] Other Important Information - The company has $26.2 million in cash and cash equivalents as of July 31, 2025, with no debt, reflecting a $3.7 million increase from the previous year [30] Q&A Session Summary Question: Feedback on Echoscope Type Nano Gen series - Management received positive feedback regarding the reduced size and weight of the Echoscope Type Nano Gen series, which allows for integration into smaller platforms [35][36] Question: Changes in DAVD-related revenue target - The company is targeting $4 million in DAVD revenue for the fiscal year, a significant increase from $1.2 million last year [38] Question: Exposure to China and supply chain concerns - The company has minimal exposure to China, with most components sourced from Europe, and has faced challenges in exporting to China due to government restrictions [41][42] Question: Echoscope as a revenue driver - Echoscope remains a key revenue driver, with recent sales growth attributed to hardware sales, although rental revenues have decreased due to shifts in funding for offshore renewables [44][46] Question: Thoughts on stock buyback program - Management indicated that stock buyback decisions are for the board to consider, while focusing on M&A opportunities to enhance business value [50]

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]