Coda Octopus Group Reports 31.8% Revenue Increase to $7.02 Million in Q2 FY 2025

Coda Octopus Group, Inc. reported a significant increase in its financial performance for the second quarter of fiscal year 2025, with net revenues reaching $7.02 million, a 31.8% increase from $5.32 million in the same period last year. The company’s gross profit also rose to $4.50 million, up from $3.74 million, although the gross profit margin decreased to 64.1% from 70.2% due to higher commission costs and a shift in sales mix. Net income for the quarter was $908,762, down 35.8% from $1.42 million in the previous year, primarily due to increased operating expenses and a higher tax provision.

The company’s total operating expenses increased by 42.8% to $3.41 million, driven by higher selling, general, and administrative costs, which rose to $2.72 million from $1.85 million. This increase was partly attributed to the acquisition of Precision Acoustics Limited (PAL) in October 2024, which contributed $1.30 million in revenue during the quarter. The acquisition has allowed Coda to expand its offerings in the acoustic sensors and materials market, enhancing its competitive position in the defense sector.

Coda Octopus's operational metrics showed a notable increase in customer engagement, particularly in defense projects, which is expected to drive future growth. The company reported that 59.1% of its consolidated net revenue was derived from international sales, highlighting its global reach. The Marine Technology Business, which remains the core segment, generated $3.88 million in revenue, a 10% increase from the previous quarter, while the Marine Engineering Business contributed $1.84 million, reflecting a slight increase of 2.3%.

Looking ahead, Coda Octopus anticipates continued growth driven by increased defense spending, particularly in Europe, and the ongoing demand for its innovative underwater technologies. The company is optimistic about its strategic positioning in the market, despite facing challenges such as fluctuating foreign exchange rates and changes in global trade policies. Management believes that the recent U.S. policy shifts favoring domestic energy production will also benefit its product offerings in the oil and gas sector. The company maintains a strong liquidity position with cash and cash equivalents of $24.46 million, which it expects will support its operational needs over the next twelve months.