OPTT - Earnings call transcript Q3 2024 | Ocean Power Technologies, Inc.

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Operator

Good morning, and welcome to the Ocean Power Technologies Third Quarter of Fiscal Year 2024 Earnings Conference Call. A webcast of this call is also available and can be accessed by 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 today's call are Dr. Philipp Stratmann, President and Chief Executive Officer; Bob Powers, Senior Vice President and Chief Financial Officer; and Joseph DiPietro, Controller, Treasurer and Principal Accounting Officer.

there a remarks, session. prepared the will question-and-answer be Following

DiPietro. to ahead, It's pleasure Joseph Please now my introduce go sir.

Joseph DiPietro

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

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

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

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

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

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

Now I am Stratmann. pleased to introduce Dr. Philipp

Philipp Stratmann

We're shareholder enhance Joe, greatly to valued is support to you, advance on morning, have our and everyone. plans and continued your this pleased as Thank good you call join us value. with we

at a General reelection of we were I our of pleased all our Board am of by of resolutions votes cast. we that majority the Before the February the members Meeting our including Annual XXXX to delve into Annual Meeting. by the General all passed on proposed strong conducted duly shareholders, numbers, announce XX the

demand, has of take clear. market vote team of advantage to past years the have X over The this management like thank you which right we the skills put for together confidence. is the I'd to

that assets essential protect enhanced roaming and data and resident security. autonomous, procuring national ocean collect marine are customers Our environments,

backlog prime building the vehicle and our customer from believe continue into like for into your seen converting order as our opportunities deliver and Latin the announced Domain revenues, turn We from a value American reward with pipeline well-positioned and wins confidence profitable We Awareness and we're shareholders. subcontract letter are momentum to Buoy's. this growth U.S.-based a Maritime contractor and multiple recently for

Let's about developments. some recent talk

commercial focused to research completed announcement make XXXX continue substantially to $X.X activities in headcount, on have has that basis annual reallocation phase enabled with We in and rate progress activities. to material on and resulting expenditures. path This our in our our profitability, on approximately we commercial are primarily go-forward run of reduction pivot development savings a line third-party and million a November in

delivery, marine to now manufacturing, and operations our customer which vehicle majority dedicated employees deployments. The are of includes

have built progress of commercial with basis suite the products year-over-year. for solutions meaningful our backlog profitability a driving future over believe $XX and be and Xx our increasing and We is of will and success million, pipeline that current revenue in we

surveillance, These USVs environmental data the ocean demand orders in wins, our and USVs the and we trust and applications from in the and underscore contract as Unmanned during profitability WAM-V to more a OPT's year growth their advanced fully from heightened and of monitoring the moment, clients Surface will across In commercial calendar WAM-V which wide-ranging the meaningful that of We known XXXX. in us reach capabilities in integrated multiple marine savings Vehicles, I globe. expense recent growing expect February Latin collection. WAM-V interest technology enable will highlighting applications the for XXXX, fully orders describe noted clients technologies our pipeline America, and maritime in received also

funding from integrating School system for received capacities we Monterey Maritime with in OPT's year-long Monterey, surveillance PowerBuoy along and of Domain in the XXXX, its demonstrate persistent technology environment. satellite a Bay. communication a a in and cutting-edge The maritime Also California, Naval PowerBuoy XG and AT&T will Awareness deployment Postgraduate February communication

a Maritime between is first XXXX, advancement testament This the Letter to with our Government subcontract Solutions prime This planned OPT AT&T. Awareness for contractor U.S.-based and a Multi-Buoy collaboration secured to we ongoing December In agencies. U.S. Contract. is a deliver Domain

currently conversion to of the firm are order. working the on contract We a letter

contracts, we from facilities WAM-Vs our these delivered In with addition deployments in and our additional several California. Jersey also vehicles to New completed and

commercial in we the of and demand. continue increased The national defense to In veterans. deliver see positioned activities, to our addition workforce over is to of security are and XX% the company levels well military to aforementioned customers our space

continues opportunity to pipeline Our grow.

to the I we addition continued the add also pipeline. orders to have just top the to In discussed, of

gross to increasing. continuing are our We are margins profit grow and revenues our

horizon. strategy Our and is see opportunities on working, Buoy's the vehicles for we additional multisystem and orders,

introduce we financial our QX CFO, Bob Bob to I'd with about in highlights, you information the our provide detailed Now into performance more before like dive will XXXX. financial Powers.

Robert Powers

Philipp. Thanks,

In WAM-V our over the reached reported million attributed growth backlog in $X.X generated begin we compared an sales $X.X primarily of the same X.Xx This from our revenue generation QX 'XX, in prior Xx marking our excess revenue Year-to-date, last in our is where to DOE with strong can performance revenues the revenue. year. period were to million, Let's increase the from and of be in of contract. conversion year.

backlog at Our January and with $X.X XXXX. at XX, $X.X year-to-date orders are at growing million million standing

our the final We continue of and revenue order to activity meaningfully expect year. ramp to fiscal throughout quarter

am substantial area business, QX and we've showed a million. unmanned primarily vehicles which profit gross for This fiscal higher-margin WAM-V improvement our is made to throughout compared figure, profit attributed a this 'XX $X.X progress QX the of the XXXX. million, particularly to at the $X.X gross expansion leasing business. I the improvement made the in of enthused 'XX progress about Our stood

tactics year-to-date figure includes of to required million failed amounted million and and by million $X.X the litigation $X.X offensive 'XX expenses extraordinary applicable (sic) following defending legal company Inc. basis. [ Paragon QX on year-to-date ] million achieve for Technologies, OPT to control expenses operating related to and without The $X.X requirements. approximately Our a other $XX.X

the of reported net As we compared to million of extraordinary a in QX materially a $X.X expenses. loss 'XX million net This loss despite QX net result, higher $X.X for for the 'XX. is

support We targeted manage strategy and making structure plans costs continue growth. needed personnel to tightly, in our our investments for and the to

we expect operating plan result mentioned, decrease to forward as materially our expenses Philipp As achieve profitability. of going a our to

$X.X XX, cash, and balance combined maintain the sheet Notably, On structure. our cash as XXXX, short-term continue and debt-free to million. with we our financial no front, totaled unrestricted bank cash, sheet investments a equivalents of balance January debt

for In related of accrued cash to fiscal the of vehicles X terms year fiscal the employment of XXXX payment fiscal in amounted earnout to XXXX autonomous during operating accrued our first of the used net our million. cash outstanding activities months of performance and the bonuses business. loss, This the payout primarily $XX.X flow, the XXXX net reflects during

addition activities, of Paragon In to payment mentioned. expenses related just as to I

fiscal covers as you in update. That million. order million increased satisfy approximately as in for our $X.X will well growth planned was investment inventory our revenue by our note Finally, financial XXXX. to in inventory necessary This to backlog $X.X balance that

as outlook. fiscal of Before call today's the financial year our we Q&A as like of well results is I'd remind quarter to XXXX our enter to everyone purpose discuss that

As you topics. we questions Q&A, Thank your head limit to you. we the into ask that these

Operator

[Operator coming Instructions] Our is Partners. Alliance question first Global Grampp from Jeff from

Jeffrey Grampp

kind up to you'd the or prime to of that. potentially project? potential to I the contract what that recognize was at assessing $X.X of expect curious, of PowerBuoy curious, available million play main rough much And with that is a first, when to that U.S. you start guys? are how the on there in those I'm timing is variables revenue

Philipp Stratmann

thanks the Jeff, and being on, thanks for question. for

subcontract contracts. an and So agency what the specific prime definitizing be on U.S. U.S. essentially need way this unnamed they the its done and that letter for then government, as Government work refer case, work to and work the is the they to finalizing in what in would statements contractors Government of it's on and

Buoy's view, of once contract in case over work, the is we customers. of the contract engineering what then going to So the products. In a we -- when shipping sale, the others facility the will and I'm to case, we're the the And the Washington, are finalizing and discussions revenues revenues time start recognizing doing the in nonrecurring and case recognize this lease, leave exact of week we part and having is start time. speaking, signed products, recognized they're generally be the definitized a start line are this this when obviously, of point from then in would D.C. in once the actually heading and we ongoing of and the

are speaking, level Generally number. to getting these these you're that would total set generally a that look we speaking, very at get -- going at close to contracts

soon as the up As these details these. of be to fairly we shows terms more timings definitized, on and I term will kind short putting nature. an the But additional is expect release it end for in that

Jeffrey Grampp

in you follow-up, details. maybe near-term a customer market Okay. you out pretty grow I either or even replicate that And can Latin the guys. how the as trying you really something Great. potentially into America? there specific My I'm interesting America curious Latin for or I curious, base or appreciate suppose, dig elsewhere understand, further -- guys to growth those about called to I'm is geography? success accelerate have

Philipp Stratmann

Yes, actually, us specifically an one America for interesting we target it's that's market Jeff. is great question, haven't a It's for Latin previously. us.

a in surveys. utilize places for and grown offshore is or have vehicles solution particularly Mexico side, vehicle we offering, like appetite the infrastructure like huge autonomous on As there Brazil the to Colombia,

is Latin infrastructure on security a focused really work. also defensive offshore so survey is market and far of us for So national more less offshore energy, America

and need vehicles the to really from up the the cash solution help to via regions, they the way the great what oil-producing constrained the an interest the expanse are Given up do environment being where into there with you you're in rates and of autonomous Campeche do if you go in customers all kind end looking and Guyana coast is a Bayer, order line, high. vast of from Brazil

Jeffrey Grampp

That's really interesting.

how sense. months? New much as just over liquidity makes handicap continue the called be of kind a way can X, sneak program out to Jersey NOL I XX -- in. of to If you state source coming here. of That a liquidity source can the that a more there XX, Okay. one guys Is The

Robert Powers

Jeff. Sure. Yes. Bob. It's Thanks,

time, state receive Jersey. that So on I to million And the there an our by several state obviously, have amount course with can But the to the the basis continued next Currently, so of we what in place we about expect $X But Jersey. NOLs next obtain this from New course years. $X over would state. receive we we that several the is New the the have determined can amount add limits on over about of the are at from annual or of left million the years.

Operator

question today coming next from Shawn Your Tower is Research. from Water Severson

Shawn Severson

the Philipp, about I deploy was ability more curious WAM-V. to

you reoccurring a the I look what of So available be you that's important. to guess are can deployments you grow for perspective X-month there. going When at that they the then or in when what which to the that -- might how if type capacity, that. of these deployed they question contracts, today contracts get multiyear in they length questions longer-term tied it call you off Are and and on being want contracts, much kind of I vehicles look X is are have future? you so longer longer be runs And the these to at revenue, business to think

Philipp Stratmann

on thanks and Shawn, for Yes, and both good questions. being very

to -- think the you to to I possible think numbers this demand market seeing see terms orders fit is we're We up, in across point, of just think first USVs. applications. I that magnitude which into. back come several demand when of scratch range that market there the can of it of to with still And to of USVs, only the comes what I WAM-Vs go starting think surface the that your back we're is and

Ukraine. looking of seeing, You're recently opportunities our which at outside strategic continues partners, other one announced is region, at Sulmara, the one rapid actively pace. Latin the of scale a We're in American obviously, We've the to looking deals. of thousands places in USV vehicles of at that the are if the and moment, directly market being you're built supplied at are look that at we work the in like general, supplying

term, we as look United at of left see efforts automation over the longer that Navy you States several of in think the and of orders into war-fighting capabilities. I the demand. through is artificial going If terms that increasing I introduction are in intelligence the said, And of there growth magnitude

There deployment, into some say, which it a long-term were customers. of take-or-pay with typically X a length place I a vehicles And it of that supply lease-to-own on stretch would to put or or the X. have terms buckets. of they either year varies, and customers of In for, structure, in we like I our is --

the jobs for into, take have and of or the want time is then vehicle. next vehicles there's want referred X or I that to have great, contingent well, I that X I'm sizable I years contract from a tend take taking really still they took bit, take so, converted a larger they're out that like or at market, customers when think what X but you months vehicle I a earlier one the particularly And X to lot actually, we of a a as of fairly and a is got. job that year, X to just who they've then the to, X. to or are then going showing stretched X maybe months But X stages originate vehicle on or trying X that X for over

And length the magnitude as really profit and increasing financials. grow I a see that And order and deployment can in -- helping us see QX the demand is the I the think increase us. of that's you what there as you excites think our is of margin, in --

Shawn Severson

great those good more the margin. coming X expect on, overall much together this to to as you So bigger reoccurring right, that's demand, But And revenue. unit. much factors a link goes -- increase, business time of contracts really stream creating to and it's obviously,

these So and right? the of at contracts, length should of both be same happening time, units

Philipp Stratmann

Yes.

I Shawn. think right, you're

materially industry. untapped is a of the go Let's hand-in-hand still there part

team to vehicles it, R&D. I aren't the saw material us And having require where demonstrations our platforms. what's deployment to market the on used, requires It different that's industry And did they and of done in being do weeks ocean for in time. on a drone that can -- doesn't an Let's this to or those call with deployed couple sonars week type that different and have aerial deployed platform medical Oceanology might that a us into in have be that that general, exciting. different at customer of that the beforehand -- London tap our a integrate with that just you equipment radio any same sensing at tools think work might a

Shawn Severson

at I margin too the contracts, or these is trying more is, we question you military, have And don't versus military margins? another separately. the differences in we're I'm to think it. businesses about commercial And right, longer-term want likely modeling out understand to commercial more contracts? just dynamics growth in Okay. of about growth know to as rates grow or X much different say if should But

Philipp Stratmann

on pretty are margins similar the both think I sides.

we're that see security are the commercial the to terms sign We our an increase I primarily seen something think did defense to we've up and customers duration in of starting in the past, for. customers. -- wanting from national and

in I to the is are deployments. other think is in longer all the gain is business, national starting And that of -- side that the sitting the the longer-term those space. of the really bit and is almost traction security Buoy definitely which interest defense

Shawn Severson

solution that the talked these is, on new America you're about question then are projects? with on of on it Are wherever going it And being new or displacing that conventional are are might projects and or on. deployed you you most or my are going are that Latin Or conventional -- working and you seeing on things solutions new you last commercial be. your more side, practices in coming projects

Philipp Stratmann

but open a is is larger where existing or a looking new fully of project displacing, that -- of emitting but alternative and emissions. that the has in new terms vessel, a have an a tool the we're provide in envisaged doing It Both. ways let's obviously tools they're all carbon points which different certain traditional lower much using work originally it may is we work. crude doing now it the cases, lower using for it's say, would therefore, customer of project, benefits of is to project cost a And then

definitely it's So a of mix both.

Shawn Severson

Great. Congratulations progress. on the

Philipp Stratmann

Shawn. Thanks, Yes.

Operator

We reached turn the end for over to the further to of our question-and-answer closing session. I'd comments. floor like or back management any

Philipp Stratmann

shareholder. OPT an being for you Thank

developer trust. you look from materially further provider enhancing Technology sector. a R&D product your We and for provider have solutions value, thank an of transitioned to We company in the ever-growing and forward shareholder the to Ocean

Operator

Thank does teleconference. you. That conclude today's

your time, day. for wonderful a We today. participation thank have disconnect may and this You your line at you

Ocean Power (OPTT) 14 Mar 242024 Q3 Earnings call transcript