Ocean Power Technologies Reports Revenue Decline and Operational Losses for Third Quarter

Ocean Power Technologies, Inc. (OPT) reported its financial results for the three and nine months ended January 31, 2025, revealing a decline in revenue and continued operational losses. For the third quarter, the company generated revenues of $825,000, a decrease of 54% from $1.8 million in the same period last year. For the nine-month period, revenues increased to $4.5 million from $4.0 million year-over-year, primarily driven by higher sales and leases of its Wave Adaptive Modular Vessels (WAM-Vs). Despite this increase, the company reported a net loss of $6.7 million for the quarter, compared to a loss of $6.5 million in the prior year, and a net loss of $15.1 million for the nine months, down from $20.8 million.

The company's operational performance showed significant changes, particularly in its cost structure. Operating expenses for the third quarter decreased to $6.1 million from $8.6 million, reflecting cost reduction measures implemented in the previous fiscal year, including headcount optimization and reduced third-party spending. The cost of revenues also decreased to $628,000 from $979,000, attributed to a shift in product mix that included a larger proportion of lower-margin third-party equipment. As a result, the gross margin for the quarter was $197,000, compared to $813,000 in the prior year.

Strategically, OPT has made notable advancements in its product offerings and market presence. The company has expanded its backlog to $7.5 million as of January 31, 2025, up from $3.3 million a year earlier, indicating a growing demand for its solutions. The company has also entered into several strategic partnerships, including a collaboration with Remah International Group in the UAE to enhance its defense and security solutions. Additionally, OPT has been actively involved in demonstrations of its technologies, including the AI-capable Merrows™ system, which integrates various maritime domain awareness capabilities.

In terms of financial health, OPT's cash and cash equivalents increased to $10.2 million as of January 31, 2025, compared to $3.3 million at the end of the previous fiscal year. The company has been utilizing proceeds from its At-the-Market Offering and other financing activities to support its operations. However, management has expressed concerns regarding the company's ability to continue as a going concern, citing the need for additional funding to meet its operational obligations through March 2026. The outlook remains cautious, with expectations of continued cash outflows until the company can achieve positive cash flow from its product commercialization efforts.