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]

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]

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]