Ocean Power (OPTT) 17 Dec 242025 Q2 Earnings call transcript

Good morning, and welcome to the Ocean Power Technologies Second Quarter of Fiscal Year 2025 Earnings Conference Call. A webcast of this call is also available and can be accessed via 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; and Bob Powers, Senior Vice President and Chief Financial Officer. to Powers. pleased now Instructions] I'm introduce Bob [Operator

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

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

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

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

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

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

to Dr. pleased am I Now Philipp Stratmann. introduce

you OPT. Good quarter share that of today. morning, the and for for I'm thank second transformational another fiscal us joining thrilled period to XXXX was

and opportunities strategic positive rapidly I flow metrics. maritime quarter, continued and as current the revenue by the we the operational partnerships milestones our most will leadership notable they cash achieving the share and the compared to to of ever. record revenue I'm trajectory pursue renewable significantly and year, fiscal increase strategic remarkable To end testament last year in toward quarterly our and to position our for financial reinforce This track security, outstanding delivered operating we this just sectors. Today, but exciting market period These growth, results. solutions.p Our and us create reflects XXXX. on our results technological momentum XXXX. international achievements, our national achieved for ahead goals broader that expenses penetrate demand the strategic execute of quarter's calendar highlight strategy emphasis and energy for our evolving infrastructure to remains And the innovations. we continues business deliver macroeconomic across advanced Our We critical $X.X reduced and of key diverse same start, not effectiveness excited expansion focused to growing XXX% our new ability markets and highest represents for the a million, achieved customers. This trends, on

successfully converting are our domestic driven We revenue, into and increasing expanding international demand. by pipeline

we're to on this deliver build capitalize momentum. scale contracts in sustained our for to positions confident Our and growth, on us ability large and and ability

Through a we're results headcount year-over-year expenses rigorous to side, and optimization business effectively disciplined for long-term These the maintaining our by XX%. On scaling manage resources operational we reduced of ability and while management cost strategic operating operating efficiency. growth. to burn the proven approach by cash third-party underscore XX% spending,

the in profitability to quarter strategy. growth approach a resolve our milestone we Strategic achieve to pivotal fourth confidence. that track central on firm remain calendar remain we and result, partnerships of a As XXXX, with

to announced the commitments over made our growing order months. presence. In purchase in $X we market Latin that to provide the highlights we progress OPT quarter, our This In demand services Unique significant includes in reinforces our for maritime and leadership our WAMV partnered expanding at customers. cutting-edge America, ADIPEC to partnership exhibit in million Middle and XX USVs a with commercial This technology. Group WAM-V East,

on in the Remo defense agreement to applications. UAE with distributor security We also signed and Group focus a International

maritime projects XB to explore Finally, offshore with Contracting and Kuwait. Trading partnership entered and General we into energy Co a in

WAMVUSBs AI-powered and with remain and to Our equipped industries. in offshore defense innovative across the efficient steadfast systems Domestically, need as are commitment MES energy sustainable, meet our commercial for positioned uniquely support defense. such national we region's PowerBuoys solutions to

we under exercises These showcase Episai its applications, solidifying Project as defense follow-on operational sector. with exercises set our This of military quarter, in part WAMV of completed of contract second reliability position validating and the successfully our in a Overmatch. power the our technology further

are delivering solutions OPT. in by military defense are the This and for providers our dual-use commercial like shift We shifting in towards encouraged aligns broader increasingly technology innovative, trends adaptable procurement, and nontraditional with applications. which strengths

these significant strategies. as upside prioritize procurement innovation their believe represent we changes Importantly, in governments agility and

space. the made positioned leadership to maritime, and this in conclusion, innovation vehicle partnerships incredibly progress such of intelligence we marine make our quarter. opportunities poised advancements of for as the offshore energy growth, well autonomous AI most sectors drive the and forward. In and we've and demonstrate these With are am proud I Our continuing significant security, national

have the will we execution, future. Thank momentum a strategic review gives calendar in us of provide end continued it of hand even and innovative by brighter Our now confidence cost The are discipline goal to detailed promising XXXX. and your will for I an financial support. who profitability partnerships over performance. toward our us built of you our driving Bob,

Philip. Thanks,

Let's with begin revenue.

This a the sequentially. XXX% earlier, illustrating our fundamental Ocean for we of for Philip this a XXX% achieved of our As demand increase the growing the achievement increase team and disciplined strategy, noted record a $X.X quarter, of year-over-year represents marking strength solutions. Technologies significant revenue Power execution million, and our

validates high-growth markets. sales to This Latin and region proved of opportunities on streams our Our for in take X/X strategic a in our revenue approximately the from America advantage contributing focus with quarter, instrumental of diversify us. revenue, this efforts high total expanding performance new

build forward shareholders. record that foundation ahead, end, our in growth. our remain and on value sustained revenue results consistent to long-term To for is executing for important Looking achieving our an step we deliver focused strategy

Turning to expenses.

last operating year. spending third-party costs reduction optimize deliberate period XXXX significantly same This $X.X tightly totaled and compared quarter the reflects fiscal to to a headcount, in million controlled the for second million across $X decrease $X.X organization. expenses reduce Our the million, the of efforts XX%

We're As to profitability ability scale in grow. to a we reinforces with operations our model the as to continue operating reduction proven support Philip expenses, confident path efficiently. XXX% will noted, this our increase, coupled revenue

of net of our by in measures, loss the year from commitment to to result $X.X financial continued last shows while decreased $X.X our a million this As improvement growth. these XX% for discipline dramatic QX quarter million driving supporting our year. This

totaled our million as prior combined restricted balance to cash million quarter. at equivalents short-term of $X.X On October cash, and XX, the of investments XXXX, the $X.X compared sheet close front, the cash,

employment million, cash and year. This our operating the during a payouts reduction flow, the million initiatives, compared prior cash our of in net bonuses improvement used update quarter. the in positive management XXXX. That cost fiscal terms to impact accrued related In financial for year-to-date, reflects $XX.X XX% totaled by concludes earnouts activities $XX.X the offset to of

the our have are strong we quarter, compelling in we promising by demand and ahead, encouraged signals our opportunities several pipeline. underlying Looking

Additionally, as With floor emerging the position attention the expand address customer for and new and footprint that, initiatives such to questions. you Ocean your partnerships globally. Thank your us we'll continued needs Philip our Power Technologies. discussed, open your of to support

with from [Operator Instructions] Water question comes the Our Research. of Tower Severson Shawn line first

how of -- strategy how model some going? Phil, is the revenue the of now can lot you service revenue seems applications. the this is recurring It you're fitting the you're as the even defense How little like about business? a is more a a bit outside side seeing recuring and into getting talk deployments commercialization

Shawn, thanks for the question.

base. we where the seeing of that an is X exercises, civilian/commercial around revenues recurring for in sides are the of security will to certainly we've of a seeing offshore some seeing and revenue previously, that terms are sales, And maintaining seeing our this it the and project-based are from that we for further few type customers sense we various which in -- exercises. I definitely we're as-a-service on we're last sell being being then step and changes doing We this course offering, comes leases that helps interest would X kind from first increase range overall addition And ability of both and leases, of a side. defense steady the are come our and a service in in our as of formal the energy said provide service applications. And project certainly and seeing still in forward, models, that probably larger deployments to us launched to under the got revenues drumbeat installed contract. couple of into add other we the larger-term being we've that you over that months, and enable side saw customers additional

of levels any sold you're where the from So to would kind we we're utilizing? asset or services they of at it kind expect is leased way are different provide maintenance then for you or where equally tier leased, sold applied this [indiscernible], and that other vehicles

out, we start a revenue the think towards these So going every get Should as going you cash type time thinking or pattern some the mostly are towards equipment about assume you or that to revenue. should equipment out So about that think you start reference sales, recurring as any but guiding we about equipment of that cash I a around get of? of think Is equipment that I we at look reoccurring coming, right? flow can should we sales from of to from model it themselves, think equipment your from that breakeven come tails model framework these or then and sales. how there sales flow

Yes.

If and -- reasonably There deployed a some whilst that tell asset into I in will these fairly particularly large the customer. exist the exist oilfield that. a useful you around kind revenues look it put once think and services the space, in sold come of life use the additional ocean how the is And -- of economic to technology is maritime at businesses tell guidelines with and system established there's extent. is over by what revenues

seeing definitely that. start launched we're So think going to offering. We that recently I just service of more

to the terms and over how I of quarters out able of as So developed, developing next series is that where provide that trend we're of more a years. how shapes in kind of the on think

stable that definitely company. a As I for long-term said, maintain are footing these the and base revenues

with this is last to anymore, development -- test obviously, -- but Are these or how seeing oil for location. working rollouts this or talked in, do other -- you a America are deployments be little My and a like world you'd customers, customer in and are gas that and question ongoing able works as have ones? follow the of I not that really South that this potential really -- America. Latin about a around But projects you go getting mean, these to you projects guess? view test the nothing the working to you I you're bit global, on these

it a is both Shawn. think I of mix

offshore energy the in I especially there space. think is --

But become you the region-specific. of in chain. demonstrate the Tier with one that X of kind it X, X, work that replicate their in customer Some way past, value is Other at very customers once we've as in Tier go parts. Tier to and sits willing more seen that

think Latin the same Middle approach and is is regions specific are that a deliberately targeting security overlap approach regions there America. Oftentimes, offshore I taken energy in where we and the South East. between there the are very we've taking in and direct we're

we think I are I regions. in we out to projects think as and these proving scale, those continue areas once

way stay next look What to for capitalize opportunities. are those that that to We on we're lean efforts us in of approach. set regions approach specific but us the where geographic allows replicating regional on will do the now then structured start still at is that to logical

next the Alliance with Gramp from Global Our Jeff comes of line question Partners.

want East. the start Middle I on to

forward pipeline. to terms maturation nearest I that that that you're forward. -- of of highlighted and you that standpoint, really you've the do that kind getting from You of of partnerships as guys kind term, that of there, of maybe opportunity kind should a something the that Is that of area highlight kind in think market, know the calendar you? a timeline a you of that and ripe path in going revenue together 'XX? big number is think about in stacking orders in a in? bit scaling for takes for more particular, What is out we How converting of a Is little something particular happens longer that there

Thanks question, Jeff. the for

that activity. small account very demonstrating of those it's our to a vehicle developments lessons, that also, we and will enabled partners, carry specifically. Bahrain. XX activity us we that out hot that years, lot there's us Navy revenues with And systems confident been us close say wave little the group able X the strong start but of over XX-foot hot feel top recently, to U.S. the bookings into we on marketing the chosen I certainly we And and calendar Adipecin to we is The a unique I weatherization the for had for main And taking that with to think at or have to think [indiscernible] fact wind also add enabled and want more solar exhibited we vehicle equally, One That in extent, we in will turbines that made Again, vehicles. Talos XXXX by confidence see X Dhabi. for we of I fact more factors. have that and XXXX. over with terms that calendar to some region in enabled see region. weather [indiscernible] together Abu that gives

winter, funding. can some I to to in then demonstrations PO rapidly the customers a commercially and have that on that solutions we demonstrating problem that try of working pretty region early they much find that try defense what front in help R&D we're late We're them is spring And will actually solve we currently not are follow-on somebody that away think of region our lead are are today. in take benefiting calendar proven right because from in straight XXXX. place We to and to place opportunities. then that

Great. really That's helpful.

the what's that follow-up, you what over What biggest hurdle any let's the or you are the, keep are path And that those trajectory risks guys and For call that? at mitigate XX I it, to to risk main of you maintaining could you derail what there? are you guess, up night doing building months? my guys guys on guys profitability factors next, this preemptively on that say would keep track? then maybe guys to the

great a question. Thanks, it's No, Yes. Jeff.

pipeline growth at ability and in revenues company. maintains scaling manner the always to the that in something and we to obviously take effectiveness is at I maintaining very continue to that we've what look obviously, introduced a have set think, a the cost we converting the we've the close pattern that how out, we that do that backlog

have terms not aware meet is to but and from limit of very the the at looking very we're time up what to So the point we the increased scale what and pushing is team that right effectiveness of ourselves come demand revenues then backlog so from we of that that cost the delivering that the we're and the would seeing, ahead getting maintain efficiency in pipeline. to

Water comes Our with next from Tower question Brian the Research. of line Gordon

my get hoping about Sorry of X I are streams question actual we how terms kind in get could the of we backlog an pipeline. that. a should and be, those about bit of think recognized revenue where was the follow-up how converted would And into revenue? of we update

absolutely. Yes,

a longer-term the it. but a convert larger a pipeline, a come opportunity quicker But we're where shows similar And side. horizon sales converting add of traction. We're a said, that then last into but Shawn's at the out while. we question lower said, to the into level for the start only recurring What maintenance at the quarter. at pipeline, has then into they're then revenues very revenue I we remained converting recurring the going to that obviously, all a at are so the pace. leases revenues everything time, more revenues, the As backlog is we becomes been it's for top same of And that they'll our seeing similar which into pipeline at we're record for we into converted we part behind is revenues maintaining things earlier, and a that of pace to pull that backlog, from hopper announced seeing

a over Merit that on our backlog campaign to Now we to customers. timely our to out that depend in concentrate for that faced converting we've the us are put the list month, to systems delivering able past activism and fashion backlog behind the fully carry then company customers XX-plus jobs their had who their on pipeline

that like what is pipeline $XX number? That backlog makes is kind sense. of million given though, actual the at roughly plus that announced you Have Definitely. the

end, million. for quarter -- We're we're Yes. the about $X.X at

sequentially down the shortly. that Philip mentioned where opportunities a up from some were. tick anticipation the bit But of that's little we will So is with earlier, that

guess I I question. And in if Great. could X sneak last

be talked You guys least have talked will of about OpEx the number at about guys that fiscal fourth break for the you even last on? Have couple that of you breakeven will quarters year. reach that in quarter this what

not of fiscal it's year, I end breakeven the our calendar the obviously, mentioned think April. fiscal [indiscernible] we've year, the in

So fourth calendar we've been XXXX. of breakeven in talking about quarter

question, it for -- reason space levels very And horizon. of next would the very Jeff, reflected anything from the of hard make related it get in the are OpEx XX-month any efficient that maintain revenues. now see to be cost-effective, we that ahead working where as that And we I very think, about use directly for in mentioned, I was is at. So OpEx earlier We cost-efficient to just in material that have. couldn't don't expansions we kind of

So add be extraordinary any this don't obviously, need revenues. delivery business notwithstanding. foresee of -- there isn't expenses, to directly in that to costs don't related we to any into We foresee

to question-and-answer this and Ladies gentlemen, session. I'll for comments. back concludes Mr. any the final our turn Stratmann floor

execution supporting our our for for you. of for you ongoing and look of growth strategy. Thank our all deliver to to shareholder forward you, and Thank We stakeholders. our being a continuing customers

Thank you. This concludes today's conference call.

Thank this your for participation. your lines time. may you disconnect You at