Ocean Power Technologies Inc (NYSE-A:OPTT) reported significant revenue growth and improved gross profit margins during its fiscal third quarter, primarily driven by increased sales of WAM-V autonomous vehicles, contract revenue from the Department of Energy, and strategic consulting services.
For the quarter ended January 31, 2024, revenue grew to $1.8 million compared to $0.7 million in 3Q23, while gross profit also improved to $0.8 million from $0.1 million in the same year-ago quarter.
The company's pipeline stood at approximately $77 million, marking a 5.5x year-over-year increase from roughly $14 million at the same time in 2023.
Additionally, the gross margin rates for 3Q stood at 45.4%, indicating enhanced profitability.
However, operating expenses rose to $8.6 million from $6.8 million in 3Q23, mainly due to legal expenses incurred in defending against Paragon Technologies, Inc., resulting in a net loss of $6.5 million for the quarter compared to a net loss of $6.1 million in Q323.
“We continue to make progress on our path towards profitability as evidenced by the continued growth in our pipeline, revenues, and gross margin,” CEO Philipp Stratmann told shareholders.
“Our efforts to increase our backlog and revenues in the defense and national security industry are paying off.”
Stratmann highlighted recent contract wins with large government prime contractors that enabled the company to provide autonomous vehicles and renewable energy buoys to various US Government Agencies. The firm also executed deliveries for commercial customers, especially in the fields of autonomous survey operations.
“The substantial cessation of our R&D efforts earlier in this quarter, is starting to lead to a reduction in payroll and engineering related expenditures, and the refocusing of the team towards execution is supporting our stated revenue growth,” Stratmann said.
“We continue to explore opportunities that will accelerate shareholder value generation as we execute our stated strategy, including cost optimization, accelerated revenue growth, partnerships, or other mechanisms.”