Coda Octopus' Q2 2025 Earnings Call: Navigating Contradictions in Marine Technology and DAVD Market Dynamics

Impact of commission costs on Marine Technology business, Marine Engineering Business and Relationship with DoD, Funding Challenges and DAVD Programs, DAVD Adoption and Market Positioning are the key contradictions discussed in Coda Octopus' latest 2025Q2 earnings call.



Revenue Growth and Geographical Sales Distribution:
- Coda Octopus Group reported a 31% increase in revenue for the second quarter of fiscal 2025.
- This growth was attributed to increased sales in Asia, particularly in the Marine Technology business, although it led to higher commission costs.

Impact of Currency Fluctuations:
- The weakening of the U.S. dollar against the British pound and Danish kroner resulted in increased operating costs for Coda Octopus.
- This currency fluctuation impacted the gross profit margins, contributing to a decrease in operating income.

Marine Technology Business Performance:
- The Marine Technology business generated 55.3% of the total consolidated revenue in the second quarter, with a 10% increase in revenue.
- Key drivers for this growth included hardware sales, particularly in Asia, which increased by 65%, although rental assets were significantly underutilized due to changes in U.S. policy on funding for offshore renewables.

Marine Engineering Business Momentum:
- The Marine Engineering business saw a 2.3% increase in revenue, along with an improvement in gross profit margin from 50.7% to 55.5%.
- The momentum was driven by increased inquiries on defense programs and opportunities for direct contracts with the Department of Defense, which positions the segment for more work packages directly with DoD.

Upcoming Product Launches and Market Expansion:
- Coda Octopus plans to launch its next generation of 3D sonars, the NanoGen series, which are smaller and designed for smaller underwater vehicles and defense space applications.
- This launch is expected to address a wider range of opportunities in the imaging sonar space and expand market reach, particularly in the defense sector.