Ocean Power Technologies Inc (NYSE-A:OPTT) is seeing continued strong demand for its AI-powered Maritime Domain Awareness Solution Merrows, this week announcing it has won a contract for the delivery of a PowerBuoy equipped with the technology in the Middle East.
CEO Philip Stratmann told Proactive in an interview that the announcement builds on its earlier announcement it was selected as a preferred supplier for its Merrows-equipped buoys in the region.
He also highlighted the potential for the company’s technology in the Middle East, citing its rich offshore energy environment, demand for security and available capital.
Proactive: You’ve had news this week talking about another sale of your maritime awareness solution. It's important to start there. You're seeing some traction gaining and not people buying one or the other product but buying solutions, putting everything together.
Phillip Stratmann: Yes, absolutely. If you look at what we've been talking about for the past year and a bit, we were working on our maritime domain awareness solution. We demonstrated that with several customers. We've been running our own demonstration systems here in the Atlantic off the coast of New Jersey and New York. We started at the back end of calendar year 2023 and have essentially ceased all of our R&D efforts.
Where we're at now is that commercialized offering is now available to customers, and customers are buying it. So, using the maritime domain awareness and putting it on a buoy and then putting it in a region that we've been talking about recently, the Middle East, I think that's really exciting for us. It shows that there is value in that fully commercialized assembled system and solution that we can bring to our customers.
This is the first commercial non-wave energy buoy contract for the company, right?
That’s correct. It's several firsts. It's the first fully commercialized maritime domain awareness solution going out. But it is also our first commercial non-wave energy converter-focused buoy going out. And, as we’ve stated before, we've been working on integrating alternative renewable energy sources into our buoy - solar panels, small wind turbines - so that we can materially increase the parts of the oceans that we can service.
This is again being able to use the commercial maritime domain awareness solution. Putting it on a commercial non-wave energy buoy gives us the opportunity to start servicing areas such as the Middle East, such as other low-wave energy-rich environments. That's great news for us, it's great for our shareholders and it's great news for our customers.
Now just about the Middle East itself. You had mentioned in the past there is a lot of continued opportunity in the Middle East. Security is extremely important in the Middle East and there's a lot of money there as well. So, it sounds like there's a combination of the two things that you really need the most when you're trying to sell things.
We think it's a very exciting region. When you look at places like the United Arab Emirates and their neighbors, there's lots of interest in the defense and security side. But equally, there's lots of interest and activity in offshore energy production. The work we have done in the past, studies that we've done in the Gulf of Mexico or work we've done in the Mediterranean several years ago, we can now take those assets and move them and translate them into those offerings there.
So, as a region, we think it is very exciting. We're looking forward to additional news from there and looking at how we best approach the region through local partners. And it does hit three things. There's a rich offshore energy environment, there's a definite need and a demand for security and defense, and the capital is available to deploy these systems. Fourth, there is a definite acceptance for novel technologies that are commercially available to be deployed over there, and I think all of that makes it very exciting.
Lastly, are you happy with where the trajectory of the company is right now? Do you feel it's on the right path to continue this growth that you've seen?
Yes. We've spoken about our pipeline in the past. In addition to the pipeline, we continue to show that our commercial team and our engineering teams are able to take those opportunities, convert them into backlog, which we then convert into revenues. And we look forward to continuing to scale that up on vehicles, on buoys, on maritime domain awareness solutions, and on a combined offering across all of these. It's going to be an exciting year ahead for us.
Quotes have been edited for clarity and style