Coda Octopus Group reported higher fiscal third-quarter revenue and earnings as strong growth in defense engineering offset weaker activity in its core marine technology business.
The subsea imaging sonar and defense technology company generated approximately $7.7 million of revenue, up 9.2% from $7.1 million a year earlier.
Defense Engineering Services revenue increased 68.3% to $2.7 million, while Acoustics Sensors and Materials revenue increased 10.4% to $1.6 million. Marine Technology revenue declined 15.2% to $3.4 million as geopolitical instability affected procurement activity in the Middle East and parts of Asia.
Operating income rose 11.1% to $1.5 million, pre-tax income increased 16% to $1.8 million and net income increased 8.3% to approximately $1.4 million. Diluted EPS rose to $0.12 from $0.11. Coda ended the quarter with $31.7 million in cash, up approximately $3 million from the beginning of its fiscal year.
Defense demand was supported by repair, sustainment and spare-parts work tied to long-running U.S. government programs. Year-to-date demand for spare parts supporting these programs exceeded $2.4 million.
Coda is also supporting prime contractors developing rugged radio-frequency electronic warfare systems for unmanned systems, helicopters, airborne pods and ground vehicles.
In Marine Technology, Coda received approximately $1.4 million of orders for its DAVD tethered diving systems and peripherals. Its untethered DAVD system has received Approved Navy Use authorization, and customer training has started.
The company’s newly launched Echoscope PIPE NANO Gen Series is also being integrated by at least five customers into underwater vehicle platforms, potentially expanding Coda’s reach into defense, robotics and autonomous subsea systems.
KEY QUOTES:
“While geopolitical instability continues to affect customer activity in certain regions, particularly the Middle East and parts of Asia, we were encouraged by the overall performance of the business during the quarter and by the increasing diversification of our revenue base.”
“We believe the long-term market drivers underlying our business remain compelling. Global defence priorities continue to focus on autonomous and unmanned maritime capabilities, creating significant opportunities for advanced underwater sensing, imaging and situational awareness technologies.”
Annmarie Gayle, Chairman and CEO of Coda Octopus Group
