Core Insights - Coda Octopus Group reported a significant increase in total revenue and earnings for fiscal year 2025, driven by the acquisition of Precision Acoustics and a focus on defense market adoption [4][3][12] Financial Performance - Total revenue rose to $26.6 million in fiscal 2025 from $20.3 million in fiscal 2024, marking a 30.7% increase [3][7] - Gross profit increased to $17.7 million from $14.2 million, but consolidated gross margin declined to 66.5% from 69.8% due to the addition of a lower-margin unit and a shift in sales mix [2][6] - Operating income rose to $4.5 million from $3.6 million, with net income after taxes increasing to $4.1 million, or $0.37 per diluted share [9] Business Segments - The Marine Technology segment generated 49.8% of consolidated net revenue, with 46% of its revenue coming from defense [12][13] - The Acoustic Sensors and Materials unit contributed $5.4 million, accounting for 20.4% of total revenue [7] - Hardware sales in Marine Technology increased by 30.5%, while higher-margin rental sales decreased by 36.6% [1][6] Strategic Focus - Management is prioritizing defense adoption, with significant progress reported in trials and deliveries of new products like the Echoscope NanoGen and untethered DAVD systems [5][14] - The company plans to continue its M&A strategy in fiscal 2026, seeking value-added acquisitions to drive growth [18] Cash Position - Cash and cash equivalents increased to $28.7 million as of October 31, 2025, with no debt [10][8]

Core Insights - Coda Octopus reported a consolidated net revenue increase of 30.7% for fiscal year 2025, reaching $26.6 million compared to $20.3 million in fiscal year 2024 [28][29] - The company operates three main business segments: marine technology, defense engineering services, and acoustics, sensors, and materials [4][10] - The marine technology segment generated 49.8% of total revenue, with a focus on underwater imaging technologies and real-time information platforms [4][5] Financial Performance - Total revenue for the marine technology business was $13.2 million, reflecting a 3.2% increase from the previous year [28] - The defense engineering services business saw a revenue increase of 5.6%, totaling $7.9 million [12][29] - The newly acquired acoustics, sensors, and materials business contributed $5.4 million, accounting for 20.4% of consolidated revenue [28][34] Product Highlights - The Echoscope, a flagship imaging sonar, is crucial for underwater applications and represents a significant revenue source, contributing 71.9% of marine technology revenue [11][15] - The NanoGen series, a new ultra-compact sonar, is designed for various underwater platforms and aims to enhance the company's market share in defense applications [7][18] - The Diver Augmented Vision Display (DAVD) system is gaining traction in both defense and commercial diving sectors, with a focus on enhancing safety and efficiency [9][21] Market Dynamics - The marine technology business is positioned to capitalize on the growing demand for AI-enabled autonomous capabilities in the subsea market [5][16] - The defense sector accounted for 46% of the core business revenue, indicating a strategic shift towards defense-related opportunities [35][62] - The company is actively pursuing broader adoption of its technologies in international markets, particularly in Europe [41][52] Strategic Initiatives - Coda Octopus aims to pivot its revenue model towards multi-year program-based adoption, focusing on recurring sales and long-term revenue streams [37][62] - The company is exploring potential acquisitions to enhance its growth strategy and expand its market presence [37][63] - The successful completion of the DAVD hardening program is expected to facilitate broader military adoption and operational use [24][41]

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 [23][25] - Gross profit rose to $17.7 million, with a 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% [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 grew by 5.6% to $7.9 million [25] - Acoustic Sensors and Materials business, added in October 2024, generated $5.4 million, contributing 20.4% to consolidated net revenue [23][25] 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 [31] - Hardware sales in the marine technology business increased by 30.5% to $9.5 million [9] - Rental assets were underutilized, impacting gross profit margins due to changes in U.S. policy on offshore renewables [10] 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 [33] - Focus on increasing market share in underwater imaging sensors within the defense sector, leveraging the unique capabilities of the Echoscope and DAVD technologies [6][12] - The launch of the NanoGen series sonar is positioned as a core real-time perception sensor for AI-enabled autonomous platforms [14][32] 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 [31][60] - The company anticipates procurement decisions for active opportunities in early 2026, with expectations for initial deliveries to commence within the 2026 fiscal year [17] - Management noted the challenges posed by the global policy environment but emphasized the solid financial results achieved [4][23] Other Important Information - The company has $28.7 million in cash and cash equivalents with no debt, representing an increase from $22.5 million the previous year [29] - The acquisition of Precision Acoustics Limited is expected to enhance capabilities in underwater acoustics and position the company for larger defense contracts [8][11] Q&A Session Summary Question: Updates on deliveries to the Indian Navy - Management was unclear about the specifics regarding the Indian Navy and did not confirm any new customer relationships [35] Question: Progress in Europe and future orders - Management expressed excitement about delivering systems to a European navy and anticipated that training would catalyze further adoption [36][37] Question: Cumulative deliveries of the DAVD untethered system - In fiscal 2025, the company achieved $3.7 million in DAVD revenue and expects to exceed this in fiscal 2026, pending approval for operational use [39][40] Question: Foreign navies testing DAVD - Management highlighted the importance of U.S. Navy approval for broader adoption and mentioned involvement with multiple foreign navies [42][46] Question: Next generation Echoscope customer feedback - Management reported strong interest in the NanoGen series, indicating it is a game changer for various markets [50][51]

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]

Core Insights - Coda Octopus Group, Inc. reported strong financial results for FY2025, with significant increases in consolidated net revenue, operating income, pre-tax income, and earnings per share [2][8]. Financial Performance - Total revenue for FY2025 was approximately $26.6 million, a 30.7% increase from $20.3 million in FY2024 [8]. - Revenue from the Marine Technology Business was $13.2 million, up 3.2% from $12.8 million in FY2024 [8]. - Revenue from the Defense Engineering Services Business increased by 5.6% to $7.9 million compared to $7.5 million in FY2024 [8]. - Gross profit rose to $17.7 million, with a gross margin of 66.5%, down from 69.8% in FY2024 [12]. - Operating income increased by 26.6% to $4.5 million, with an operating margin of 17.1% [12]. - Pre-tax income was approximately $5.5 million, a 19.5% increase from $4.6 million in FY2024 [12]. - Net income after taxes was $4.1 million, reflecting a 13.3% increase from $3.6 million in FY2024 [12]. - Diluted earnings per share increased to $0.37 from $0.32 in FY2024 [12]. Business Developments - The acquisition of Precision Acoustics Limited (PAL) contributed positively to financial performance, achieving qualifying conditions for earn-out payments [2][3]. - Sales related to DAVD technology reached approximately $3.7 million, up from $1.2 million in the previous fiscal year [3]. - Equipment sales for Echoscope increased by 30.5% to $9.4 million compared to $7.2 million in FY2024 [3]. - The company completed the "Joint Funded DUS Hardening Program," delivering 16 next-generation DUS Systems for the U.S. Navy [5]. - The new generation of untethered DAVD systems is undergoing the Authorization for Navy Use (ANU) approval process, which is crucial for broader adoption [5][13]. Strategic Focus - The company is focused on increasing its share in the Defense Underwater Vehicles sector, which is transitioning towards AI-enabled autonomous capabilities [11]. - The introduction of the NANO Gen Series imaging sonar is aimed at enhancing the company's position in the underwater imaging sonar market [11][14]. - The company is expanding its growth strategy to include M&A activities, targeting value-accretive opportunities [15]. Cash Position - The cash balance at the end of FY2025 was $28.7 million, an increase of $6.2 million from $22.5 million in FY2024 [9]. Research and Development - Research and Development expenditures for FY2025 were approximately $2.4 million, a 9.2% increase compared to $2.2 million in FY2024 [12]. Summary of Achievements - The company successfully launched the ultra-compact Echoscope PIPE NANO Gen Series imaging sonar, which is well-received in the market [13]. - The company is seeing traction for DAVD technology outside the U.S., with sales to a European Navy [13].

Core Viewpoint - Coda Octopus Group, Inc. will host a conference call on January 29, 2026, to discuss its fiscal year 2025 results, with a press release to be issued prior to market opening on the same day [1] Group 1: Company Overview - Coda Octopus Group, Inc. is a leader in real-time 3D/4D/5D and 6D imaging sonar technology, providing solutions for subsea intelligence and augmented reality diving technology [1][4] - The company was founded in 1994 and supplies hardware and software solutions to the underwater/subsea market, including proprietary sonar technologies marketed under names like Echoscope [4] - Echoscope technology is utilized globally for various applications, including underwater mapping, subsea intervention, and marine construction [4] Group 2: New Technologies - The newly launched Diver Augmented Vision Display (DAVD) technology aims to revolutionize diving operations by integrating topside control with diver HUD systems, enabling shared visualization of underwater scenes [5] - DAVD technology allows operations in zero visibility conditions, addressing a common challenge in diving [5] Group 3: Defense Engineering Services - Coda Octopus Group operates two Defense Engineering Services businesses, Coda Octopus Martech Ltd and Coda Octopus Engineering, which supply sub-assemblies to prime defense contractors [6] - These businesses provide services including concept design, prototype manufacturing, and post-sale support, allowing for repeat orders throughout the life of defense programs [6] Group 4: Recent Acquisition - The company recently acquired Precision Acoustics Limited, which specializes in acoustic sensors and materials, and is accredited to ISO/IEC 17025 standard [7][8] - This acquisition enhances the company's capabilities in precision ultrasonic measurement, critical for regulated applications in medical and defense sectors [8]

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 [24] - Gross profit rose to $4.8 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, with 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 net revenue [4][24] - The marine engineering business saw a revenue decline of 33.2%, down to $1.6 million from $2.4 million in Q3 2024 [9][24] - The newly acquired Precision Acoustics Ltd contributed 20.6% to net revenue, generating $1.5 million [10][24] 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 [8][24] - Revenue from the Echoscope accounted for 57.7% of marine technology business 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 technology [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 for the DAVD product line [32][50] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about achieving $4 million in DAVD revenue for the fiscal year, a significant increase from $1.2 million the previous year [37][46] - The company is experiencing delays in contract awards within the marine engineering business due to funding issues in defense programs [9][28] - Management highlighted the importance of the defense market for scalable growth, noting that the evaluation process for technology integration can be lengthy [44][46] Other Important Information - The company reported an increase in cash and cash equivalents to $26.2 million, with no debt [28] - The gross margin for the marine technology business decreased to 77.0% from 82.9% in the previous year, reflecting a shift in sales mix [25][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 Echoscope, which allows for integration into smaller platforms [34][35] Question: Change in DAVD-related revenue target - The company is now targeting $4 million in DAVD revenue for the fiscal year, up from the previous target of $4.5 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 regulatory barriers [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 declined due to shifts in funding for offshore renewables [43][44]

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]