Financial Data and Key Metrics Changes - Consolidated net revenue for fiscal year 2025 increased by 30.7% to $26.6 million, compared to $20.3 million in fiscal year 2024 [23][25] - Gross profit rose to $17.7 million from $14.2 million, with a consolidated gross margin of 66.5%, down from 69.8% in the previous year [25][26] - Operating income increased by 26.6% to $4.5 million, with an operating margin of 17.1%, slightly down from 17.6% [28] Business Line Data and Key Metrics Changes - Marine technology business revenue increased by 3.2% to $13.2 million, contributing 49.8% of consolidated net revenue [4][23] - Defense engineering services revenue rose by 5.6% to $7.9 million [25] - The newly acquired Acoustic Sensors and Materials business generated $5.4 million, contributing 20.4% to consolidated net revenue [23][11] Market Data and Key Metrics Changes - In the marine technology business, 46% of revenue came from the defense sector, while 54% was from the commercial marine sector [9][31] - Hardware sales increased by 30.5% to $9.5 million, with significant growth in Asia, where sales rose by approximately 7.7% [9][10] Company Strategy and Development Direction - The company aims to pivot its revenue model towards a multi-year program-based adoption model, focusing on recurring sales and long-tail revenue [33] - The launch of the NanoGen series sonar is positioned as a core real-time perception sensor for AI-enabled autonomous platforms [32][14] - The company is actively seeking to complete acquisitions to enhance growth and shareholder value [64] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth in the defense sector, which is seen as a key area for future revenue [31][60] - The company anticipates that procurement decisions for active opportunities will be made in early 2026, with initial deliveries expected to align with customer deployment schedules [17][16] - Management highlighted the importance of broader adoption of DAVD technology outside the U.S. as a critical benchmark for growth [47] Other Important Information - The company had $28.7 million in cash and cash equivalents as of October 31, 2025, with no debt [29] - Total operating expenses increased by 24.0% to $13.1 million, primarily due to the addition of Precision Acoustics Limited and currency translation effects [27] Q&A Session Summary Question: Updates on deliveries to the Indian Navy - Management was unclear about the Indian Navy deliveries and did not confirm any new customer relationships [35] Question: Progress in Europe regarding DAVD systems - Management confirmed the delivery of two systems to a European navy and expressed excitement about potential larger orders following training [36][37] Question: Cumulative deliveries of the untethered DAVD system - In fiscal 2025, the company achieved $3.7 million in DAVD revenue and anticipates beating this in fiscal 2026, pending approval for operational use [39][40] Question: Offshore commercial demand environment outlook - Management noted a significant uptick in rental opportunities in Q4 and emphasized the importance of the defense market for future growth [59][60]

Financial Data and Key Metrics Changes - Consolidated net revenue for fiscal year 2025 increased by 30.7% to $26.6 million from $20.3 million in fiscal year 2024 [24] - Gross profit rose to $17.7 million, with a gross margin of 66.5%, down from 69.8% in the previous year [25] - Operating income increased by 26.6% to $4.5 million, with an operating margin of 17.1% [29] - Net income after taxes was $4.1 million, or $0.37 per diluted share, compared to $3.6 million or $0.32 per diluted share in fiscal year 2024 [30] Business Line Data and Key Metrics Changes - Marine technology business generated $13.2 million in revenue, a 3.2% increase from $12.8 million in fiscal year 2024 [24] - Defense engineering services revenue increased by 5.6% to $7.9 million [25] - The newly acquired Acoustic Sensors and Materials business contributed $5.4 million, accounting for 20.4% of consolidated net revenue [24][31] Market Data and Key Metrics Changes - 46% of marine technology business revenue came from the defense sector, while 54% was from the commercial marine sector [32] - Hardware sales in the marine technology business increased by 30.5% to $9.5 million [9] - Revenue from Asia, a key market, rose by approximately 7.7% to $5.9 million [9] Company Strategy and Development Direction - The company aims to pivot the revenue model of the marine technology business towards a multi-year program-based adoption model [34] - Focus on increasing market share in underwater imaging sensors within the defense sector, leveraging the unique capabilities of the Echoscope and DAVD technologies [6][32] - The launch of the NanoGen series sonar is positioned as a core real-time perception sensor for AI-enabled autonomous platforms [33] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth potential in the defense sector, highlighting the importance of securing contracts and expanding market presence [32] - The company anticipates procurement decisions for active opportunities in early 2026, which could lead to recurring production contracts and sustained growth [17] - Management noted challenges in the commercial marine market due to changes in U.S. policy affecting offshore renewables, impacting rental asset utilization [10] Other Important Information - The company completed a hardening program for the untethered DAVD system, which is expected to facilitate broader adoption in the military diving market [20] - The acquisition of Precision Acoustics Limited enhances the company's capabilities in underwater acoustics, positioning it for larger defense contracts [8] Q&A Session Summary Question: Updates on deliveries to the Indian Navy - Management was unclear about the Indian Navy deliveries and did not confirm any new customer relationships [37] Question: Progress in Europe regarding DAVD systems - Two systems were delivered to a European navy, with training scheduled, which is expected to catalyze further adoption [39] Question: Cumulative deliveries of the untethered DAVD system - In fiscal 2025, the company achieved $3.7 million in DAVD revenue and anticipates beating this in fiscal 2026, pending approval for operational use [41][42] Question: Offshore commercial demand environment outlook - The commercial marine market is expected to see good opportunities, with a noted uptick in rental sales in Q4 [59] Question: Capital allocation priorities with $28 million in cash - The company plans to pursue accretive acquisitions as a primary means of growth and return to investors [65]

Financial Data and Key Metrics Changes - In Q3 2025, total revenue increased by 29% to $7.1 million compared to $5.5 million in Q3 2024 [24] - Gross profit rose to $4.8 million from $4.0 million, with a consolidated gross margin of 68.3%, down from 73.9% in the previous year [25][26] - Operating income slightly decreased to $1.38 million from $1.39 million, resulting in an operating margin of 19.5% compared to 25.4% in Q3 2024 [27][28] 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 revenue [24][25] - The marine engineering business saw a revenue decline of 33.2%, down to $1.6 million from $2.4 million in Q3 2024 [24][26] - The newly acquired Precision Acoustics Ltd contributed 20.6% to net revenue, generating $1.5 million [24][25] Market Data and Key Metrics Changes - Hardware sales in the marine technology business increased by 103.6% to $2.7 million, while rental asset utilization was low, impacting gross profit margins [8][26] - Revenue from the Echoscope accounted for 57.7% of marine technology revenue, while DAVD contributed 42.3% [8] 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 and DAVD technologies [5][6] - The launch of the NanoGen series sonars aims to address the growing demand for smaller underwater vehicles and enhance situational awareness [12][13] - The company is pursuing an M&A strategy to build a pipeline of complementary technologies, particularly in the defense sector [32][50] 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][31] - The company is optimistic about achieving $4 million in DAVD-related revenue for the fiscal year, a significant increase from $1.2 million the previous year [37][46] Other Important Information - The company has $26.2 million in cash and cash equivalents with no debt, reflecting a $3.7 million increase since October 2024 [28] - The marine engineering business is reliant on defense program funding, which has been delayed, affecting contract awards [9][26] Q&A Session Summary Question: Feedback on Echoscope Type Nano Gen series - Management received positive feedback regarding the reduced size and weight of the new Echoscope, which allows for integration into smaller platforms [34][35] Question: Changes in DAVD revenue target - The company expects to achieve $4 million in DAVD revenue, up from a previous target of $4.5 million, reflecting significant growth from last year's $1.2 million [36][37] 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 [40][41] 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 [42][43][44] Question: Thoughts on stock buyback program - Management indicated that stock buyback decisions are for the board to consider, focusing currently on M&A opportunities [48][50]

Financial Data and Key Metrics Changes - In Q3 2025, total revenue increased by 29% to $7.1 million from $5.5 million in Q3 2024 [27] - Gross profit rose to $4.8 million, with a consolidated gross margin of 68.3%, down from 73.9% in the previous year [28] - Operating income slightly decreased to $1.38 million, with an operating margin of 19.5%, compared to 25.4% in Q3 2024 [30][31] 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 revenue [27][28] - The marine engineering business saw a revenue decline of 33.2%, down to $1.6 million from $2.4 million in Q3 2024 [27][28] - The newly acquired Precision Acoustics Ltd contributed 20.6% to net revenue, generating $1.5 million [27][28] Market Data and Key Metrics Changes - Hardware sales in the marine technology business increased by 103.6%, reaching $2.7 million compared to $1.3 million in Q3 2024 [9][28] - Revenue from the Echoscope accounted for 57.7% of marine technology revenue, while DAVD contributed 42.3% [9] Company Strategy and Development Direction - The company aims to increase market share in underwater imaging sensors, particularly in the defense sector, leveraging the unique capabilities of the Echoscope and DAVD technologies [6][14] - The launch of the NanoGen series sonars is expected to enhance the company's position in the defense and underwater robotics markets [18][24] - The company is focused on executing its M&A strategy to pivot the revenue model towards multi-year, multiple sales opportunities [34] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the global policy environment but expressed confidence in the growth trajectory, particularly in defense-related markets [4][33] - The company is optimistic about the future, citing strong interest in its technologies and ongoing trials with defense customers [14][18] Other Important Information - The company has no debt and reported $26.2 million in cash and cash equivalents as of July 31, 2025, an increase from $22.5 million at the end of the previous fiscal year [31] - The company is experiencing delays in contract awards for the marine engineering business due to funding issues in defense programs [10] 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, which allows for integration into smaller platforms [36][37] Question: Change in DAVD-related revenue target - The company expects to achieve $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 regulatory barriers [42][43] Question: Echoscope as a revenue driver - Echoscope remains a key revenue driver, with recent sales growth attributed to hardware sales, although rental revenues have declined due to shifts in funding for offshore renewables [45][46] Question: Thoughts on stock buyback program - Management indicated that stock buyback decisions are for the board to consider, emphasizing a focus on M&A opportunities instead [49][51]