How did Ocean Power's revenue trends shift in Q3 2025 compared to previous quarters?

Ocean Power Technologies Inc. (OPTT) experienced a significant decline in revenue for Q3 2025 compared to the previous quarters, Q2 2025 and Q1 2025.

1. Q3 2025 Revenue Decline:
   • In Q3 2025, OPTT reported revenue of $0.8 million.
   • This represents a substantial decrease from the revenue of $1.8 million recorded in the same quarter of the previous year, Q3 2024.
   • The decline in revenue is particularly notable when compared to the nine-month revenue of $4.5 million for Q3 FY2025, which indicates a drop in sales momentum over the period.

2. Backlog Increase Amid Revenue Decline:
   • Despite the revenue decline, OPTT achieved a record backlog of $7.5 million, up from $3.3 million in the same period last year.
   • The growth in backlog was primarily driven by new partnerships in Latin America, which contributed $5 million in purchase orders.
   • The increase in backlog suggests potential for future revenue growth, although it does not immediately translate to revenue in the current quarter.
3. Strategic Focus and Financial Improvements:
   • OPTT has been focusing on strategic developments, including expanding its global footprint and strengthening partnerships.
   • The company has also made significant strides in cost management, reducing operating expenses by 29% to $6.1 million.
   • Cash used in operating activities was reduced by 59%, from $9.2 million to $3.7 million, indicating improved cash flow management.
4. Challenges and Uncertainties:
   • The company continues to face financial challenges, posting a net loss of $6.7 million for Q3 2025, an increase from the previous year's $6.5 million.
   • The net loss per share improved from 11 cents to 4 cents, largely due to an increase in average shares outstanding.
   • Operational efficiency improvements and a narrower loss before income taxes, at $6.7 million, compared to $7.8 million in the prior year, are positive indicators.

In conclusion, while OPTT has seen a decline in revenue for Q3 2025 compared to the previous quarters, the company has made strides in backlog growth, cost management, and strategic positioning for future revenue potential. The challenges faced, however, particularly the wider net loss, underscore the need for continued focus on revenue conversion and market demand.