Coda Octopus Group, Inc. reported its unaudited financial results for the fiscal second quarter ended April 30, 2025, with consolidated net revenue increasing 31.8% to $7.02 million compared to $5.32 million in the prior-year quarter. All business units contributed to this revenue growth, with the newly acquired Precision Acoustics Limited (PAL) adding $1.30 million.
The core Marine Technology Business saw a 10.0% revenue increase to $3.88 million, driven by a 65.5% rise in hardware sales to $3.32 million. However, rental and associated services revenue decreased by 75.9% to $168,791, attributed to reduced offshore renewables activity in Europe due to changes in U.S. energy policy.
Consolidated gross margin decreased to 64.1% from 70.2% in SQ2024, primarily due to an unfavorable sales mix (higher hardware sales versus rentals) and a 195.2% increase in commission costs to $390,384 from a specific volume sale in Asia. Operating income decreased 19.5% to $1.09 million, and net income was $908,762, down 35.8%.
Despite the profitability pressures, the company's cash balance increased by $2.0 million to $24.46 million as of April 30, 2025, with no outstanding debt. Management anticipates that the exceptional factors impacting Marine Technology margins in Q2 2025 will normalize, leading to stronger margins in the future.
Operationally, CODA received $1.53 million in DAVD tethered system orders, expanding the user base to approximately 12 Navy Commands. The company expects to deliver 16 DAVD untethered systems (DUS) in Q3 2025 for integration into MK16 Underwater Breathing Apparatus for SPECWAR and EOD applications, following positive defense field trials confirming DAVD's effectiveness and the benefits of combining it with Echoscope in low visibility environments.
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