Ocean Power Technologies Inc (NYSE-A:OPTT) (OPT) is on track to achieve profitability having secured funding and new orders for its intelligent maritime solutions, analysts at Water Tower Research have highlighted following the release of OPT’s fiscal third quarter earnings report.
The analysts highlighted that in January 2024, OPT received approximately $1.2 million through the New Jersey Economic Development Authority’s program, which allows companies to sell unused tax credits to generate cash.
“This annual funding is a significant resource for OPT as it moves toward profitability,” the analysts wrote.
On the orders front, the analysts pointed out that the company expects contracted orders for fiscal 2024 to be $15 million, more than double the amount for fiscal 2023.
They highlighted more than $1.25 million in orders for OPT’s fully integrated WAM-V Unmanned Surface vehicles from clients in North America and a subcontract valued at up to $6.5 million to supply maritime domain awareness buoys to a US prime contractor.
“This collaboration supports national security and intelligence efforts for US government agencies and the contract is a positive development for OPT, potentially leading to further collaboration and revenue generation,” Water Tower’s analysts wrote.
They noted that, at the end of January, OPT’s pipeline was $77 million, up from $14 million last year. About 60% to 70% of its order activity is with government agencies while 20% to 25% is with energy companies.
“The company’s pipeline reflects a significant increase in defense and security activity along with the expansion of commercial opportunities, driven by growing interest from offshore wind companies for autonomous monitoring, surveillance, and survey-related services during various stages of the project development cycle,” they wrote.
The analysts also pointed out that OPT’s pivot to commercial activities has led to a reallocation of headcount, resulting in about $4.5 million in annual savings and a material reduction in third-party expenditures.