Ocean Power (OPTT) 14 Dec 232024 Q2 Earnings call transcript

Good morning, and welcome to the Ocean Power Technologies Second Quarter Fiscal Year 2024 Earnings Conference Call. The webcast of this call is also available and can be accessed by a link on the company's website at www.oceanpowertechnologies.com. This conference call is being recorded and will be available for replay shortly after its completion.

On the call today are Dr. Philipp Stratmann, President and Chief Executive Officer; Bob Powers, Senior Vice President and Chief Financial Officer; and Joseph DiPietro, Controller, Treasurer and Principal Accounting Officer.

there a remarks, session. prepared the will question-and-answer be Following

DiPietro. to Now pleased Joseph I am introduce

Thank morning. filed and October our Form you, good for XX, earnings we closed XX-Q press issued XXXX. yesterday, release quarter and the our on After report ended the market

Investor Our filings the on of the website and the public section SEC OPT available within are Relations website.

make the within the of provisions of Private During Litigation are XXXX. this safe that call, forward-looking statements we Act Securities will Reform harbor

projections different or financial objectives, that include results circumstances Forward-looking expressed other These from statements and no are plans, may little forward-looking involve and statements or other implied the have assumptions future company's by may risks, the or management expectations results statements company of factors over which actual regarding such intentions. or uncertainties materially made any may based cause on statements. future control be to by

about XX-K on or in update uncertainties these any obligation forward-looking can intention Additional filings and The disclaims call. found SEC. made statements subsequent the and the be risks company information Form this to company's the with

it posted a our presentation an updated as IR overview our Please nice a strategy. we moment review company it on and take of to Finally, website. investor provides

to pleased Stratmann. introduce am I Now Philipp Dr.

We're Thank valued. us everyone. Joe, and you, and you support good is greatly pleased join your have to morning, on continued this call,

our quarterly clear. our the into is delve and numbers, I'd pleased like results we with that positive Before market highlight momentum. to continued demand The I'm

roaming Our national ocean protect and marine customers and environments, assets security. essential and data are autonomous collect enhance resident procuring

to wins multi-vessel positioned into months shareholders. translate We and value and and our into pipeline believe we're announced XX in multi-buoy momentum deliver XX our and opportunities building contracts. backlog continue recently revenues, this growth next with as seen the converting for the like profitable well to We are

meaningful primarily focused be believe In suite and and million our research some XXXX, XX, built We've development with pivot on about for are a recent operational developments. material backlog that October resulting million XDent contracted basis XXXX. the and $X.X headcount, to completed our our XX, a of commercial announced to of third-party expenditures. success, November will and on of we $X.X activities have phase the we backlog, in we in current and July substantially on activities. commercial reduction progress This increasing and enabled talk commercial XXXX, products Let's revenue that future the hence in solutions reallocation reduction in profitability, divestiture and from

majority delivery. now our the a to are result, employees dedicated customer of As

underscores revenue $X.X U.S. adviser deliver such will financing is We order, with already with to the networks first allow Board Maritime $X.X million the This Domain for U.S.-based were XXXX, as underway ability industry. special Rear from retained a pipeline secured and additional and by a capital to sources. In providing October expect provide protecting Multi-Buoy to to reach demand, that customers the order recent expenses of for meaningful recently in contract. to of we solutions prime contractor Letter to offshore subcontract ceiling state-of-the-art is providing multi-vessel this in contract a our securing December solutions U.S. a fulfill security for national Awareness our order that contribute and awarded solutions, innovative and maritime Vic's volume including Due the highly recognition Government our We to for crucial the arrays WAM-V sustainable player a technology exemplifies to expertise innovation We in commitment offshore bolstering our plan momentum government agencies. This to role at solutions confidential the our of defense and to and during maritime more production calendar a year multi-buoy to plays in Directors. a information. in describe current underscores Sulmara, XXXX as million, environment. In services. maritime security profitability sensitive year. contract will This not and our Paragon growth sectors on valued recognition we capital XXXX, the first commercial safer expectation The fiscal navigate would noted the does Victorino order build intelligent enable leverage wins, could and savings as resources. which from expense and that access OPT our those cause on I extraordinary company's us the a moment, we related the litigation Admiral, Mercado, to and challenges experience, account using to "Vic" seek fully carefully prominent

Finally, activity national our the the Officer. for Matt commercialization commercial created newly me, will growth vast operational and we Chief role our experience short, the and we products, drive Commercial phase levels appointed our the will organization. to recently directly throughout seeing next of of leverage of increased Matt I'm to security particularly the report Matt's Burdyny and and [ markets. In IV ] cutting-edge defense to

We we within the continue serve. company well position to industries the

grow. to continues pipeline opportunity Our

just year. during fiscal In top Pipeline XX, XXXX, October pipeline. to million of we've orders gain a of net approximately for is I continued approximately $XX the the addition discussed, also of the to the first of $XX million the add half to

and our We are increasing. gross profit to grow revenues, continuing are our margins

the we and orders is opportunities horizon. strategy working, see on multisystem additional for Our

before will like fiscal in 'XX. about performance we into more Now the information financial CFO, with to financial detailed introduce provide Bob you QX our Bob dive Powers. I'd our highlights,

Thanks, Phil.

backlog generated where revenue. primarily to year. be our year. in attributed prior reported sales with begin same the the revenue Xx, of we growth $XXX,XXX, the our 'XX, and last Let's in conversion period from our can generation to performance WAM-V increase compared is $XXX,XXX were Year-to-date, revenues from of contract. in reached significant DOE strong for This excess QX In our marking the revenue a

October Our XXXX. and with growing XX, $X.X orders are $X.X million at million standing year-to-date backlog at

ramp throughout to meaningfully year. revenue and the second activity the of order expect to continue half We

substantial at particularly am business, a Our the gross expansion showed the this QX 'XX made This fiscal in we 'XX $XXX,XXX, area a to progress improvement higher-margin XXXX. attributed to WAM-V in the our compared made which primarily progress and under figure, profit business. of enthused have leasing I is profit vehicles for unmanned $XXX,XXX. QX of gross about improvement the stood

expenses for and amounted 'XX operating support I Our investments personnel and discussed the Philipp $X to our to QX systems both million, previously. reflecting growth in

million of net 'XX. As net we of a for $X.X a to QX the net compared QX 'XX reported million result, loss for $X.X loss for

tightly, needed plans and to cost continue structure making We targeted support manage for our in to strategy personnel and our the investments growth.

a decrease achieve to forward our our as operating plan materially going result to of As Philipp mentioned, expect we profitability. expenses

we sheet and combined to totaled as of debt-free short-term the October balance no cash, bank On balance our front, XXXX, with million. cash Notably, XX, financial $XX.X maintain a continue sheet debt equivalents in structure. investments our

net autonomous operating the half cash activities of first XXXX for cash the performance amounted of outstanding fiscal the fiscal during payout and primarily bonuses earnout business. our used vehicles the terms accrued of the This payment flow, in to to the XXXX net fiscal XXXX of during related million. our employment loss, year $XX.X our In reflects accrued of

necessary to our in financial revenue note our planned That inventory the approximately backlog satisfy well $X.X fiscal covers will in growing as was balance that for XXXX. order in million inventory growth update. you million. $X.X to by as This investment Finally, increased our

like results the everyone to of the to of we XXXX financial fiscal Q&A, remind Before enter our that discuss today's as well is second I'd our purpose quarter call year as outlook.

topics. to head ask you these the Thank you. questions limit your that Q&A, As we into we

[Operator Instructions] Our from Water first Shawn is Severson with question Research. Tower

can figure how in I'm something the mix And the curious, what look understand that about on that and like guess it reoccurring should this pipeline, revenue $XX go Philipp, there I'm sales? million, when that Is mix pipeline. heavy way recurring would into really great towards to is convert I drive. you like it at pipeline, move much trying that of of backlog and look the revenue? it and talk look any to at out

which ongoing mix sort there primarily sales place, lease company stepped the are as some from more look you Shawn, even if contain X kind pipeline back the data And One when recurring noticing materially also really are leases day shift they thanks to guarantees. for side. shifting it that then the was service revenue whilst the the what some to first orders of in as we at larger opportunities, examples, question. well years in now minimum the team was got management current the a is multi-volume and obviously might -- be towards contain the thing of the product robotics an in of operating as of we definitely ago of

And into customers. to forecast start stack enables of kind moving what becomes to which each ultimately we to under it assets top a the do So provide provide guidance our can as contract providing forward. of us take-or-pay and we move on other, and is that

a this for convert Just what mean, approval project, pipeline just programs? going pipeline? on understand you that. I conversion what triggers project triggers that that course, I question in a pilot budgetary in And by to of it's generalization? vary the know are second trying key are waiting but for to

are oftentimes the just the speed defense aligning anything contracting looking being you government And that have larger within with commercialized -- terms is for -- related. a gets customer customer can seen fact kind said productized that conversion is pipelines requirements In identification security. is our demonstration opportunity perspective, we're that We now It offerings. now order seeing largely these the and overall, it is and we're we in stepping before customers. these from is And government thank project assets the into assets until just and other of bulk the are being those project shortening national into opportunities on of it be project buoys because and the it and purchase But discussions cases, pipeline, we're into instances, that it of the on vehicles really as not also it's if on the Yes, that financing. Shawn. lot definitizing anymore question, are of provided. -- seeing the deployed it primarily to being depends as due base of a in and partially And a a that sector, the from a order.

back for to the will I management time, floor any this remarks. closing turn At

you. Thank

towards your a for progressing and valued continue of thank we We support never shareholder. take and we for profitability, granted, you being any

you Thank teleconference concludes today. today's your webcast. This participation and for

lines your disconnect this now may time. You at