Ocean Power Technologies Inc (NYSE-A:OPTT) (OPT) told investors it expects to be cashflow positive in calendar year 2025 after reporting second-quarter results that show strong progress with its strategy.
The company, a provider of ocean energy and intelligent data services, said its pipeline amounted to roughly $93 million at the end of October, a 221% year-over-year increase from a year earlier. The pipeline continues to grow, reflecting a significant increase in defense and security activity as well as an expansion of commercial opportunities, it added.
For the quarter, OPT achieved revenues of $0.9 million, reflecting a $0.6 million year-over-year increase. Revenue for the six months to October 31 of $2.2 million was more than double the $1 million reported a year earlier. Gross profit amounted to $0.5 million, from $39,000 in 2Q 2023, resulting in a gross margin rate of 54.9%.
Among the highlights of the quarter, OPT said it secured a $1.6 million volume order from Sulmara, a major offshore services provider. This order, the largest for OPT's WAM-V 16 uncrewed surface vehicles to date, underscores the industry's acknowledgement of OPT's innovative and sustainable offshore solutions.
Additionally, OPT won a contract supporting foreign law enforcement in combating illegal fishing activities. This collaboration showcases the company's state-of-the-art uncrewed technologies, demonstrating unprecedented networked surveillance capabilities and evidence collection.
The company also noted the recent appointment of Rear Admiral Victorino 'Vic' Mercado (Retired) as a special advisor to leverage his expertise in providing intelligent maritime solutions to the US Government and defense sectors. The company also appointed Matt Burdyny as chief commercial officer, focusing on the growth and commercialization of its cutting-edge products, especially in the national security and defense markets.
“We continue to make progress with our strategy as evidenced by the continued growth in our backlog, increased opportunity pipeline, and delivery for our customers." president and CEO Philipp Stratmann commented in a statement.
"Recent contract wins with large government prime contractors to service various US Government Agencies are evidence of the growth of our government-related backlog. Approximately 80% of our business is now with national security and defense customers, and our two primary platforms, WAM-V vehicles and PowerBuoys continue to see increased demand pull in these markets."
The company's financials for the quarter show operating expenses of $8 million, a 1.4% sequential decrease from the previous quarter. Its net loss amounted to $7.2 million compared to $4.8 million in 2Q 2023. It ended the quarter with combined cash, restricted cash, cash equivalents and short-term investments of $18.9 million,
"Since the end of the quarter, we have substantially completed our research and development efforts, leading to reduced future annualized expenditures," Stratmann added.
"As a result of these changes, combined with increased demand, we believe OPT will be cashflow positive within calendar year 2025. We remain steadfast in our commitment to drive value to our customers and deliver value to our shareholders and will continue to explore opportunities to accelerate value enhancement."