Coda Octopus Group 2025 Q2 Earnings Revenue Jumps 31.8% as Net Income Falls 35.8%

Coda Octopus Group (CODA) reported its fiscal 2025 Q2 earnings on Jun 16th, 2025. Revenue increased by 31.8% to $7.02 million, surpassing analyst expectations, with significant contributions from the Marine Technology segment. However, the company missed earnings expectations, with net income declining by 35.8% to $908,762. Despite the revenue growth, guidance remains in line as the company anticipates continued expansion in its Marine Technology and Engineering segments, focusing on defense-related underwater imaging.

Revenue
In the second quarter of 2025, Coda Octopus Group witnessed a notable increase in total revenue, reaching $7.02 million, up from $5.32 million in the same period of the previous year. The Marine Technology Business significantly contributed with $3.88 million, followed by the Marine Engineering Business at $1.84 million. Additionally, the Acoustics Sensors and Materials Business added $1.30 million to the overall revenue, resulting in a cohesive total of $7.02 million for the quarter.

Earnings/Net Income
Coda Octopus Group experienced a decline in EPS, dropping by 38.5% to $0.08 from $0.13 in the previous year. Net income similarly decreased by 35.8%, falling to $908,762 from the prior year's $1.42 million. The reduction in net income and EPS indicates challenging profitability conditions.

Price Action
The stock price of Coda Octopus Group has dropped 6.51% during the latest trading day, surged 21.91% during the most recent full trading week, and has surged 20.98% month-to-date.

Post-Earnings Price Action Review
The strategy of purchasing CODA shares when its revenues exceed expectations has generally underperformed compared to the benchmark. Holding these shares for 30 days yielded a 33.98% return, significantly lower than the benchmark return of 90.20%. This approach experienced a maximum drawdown of -56.22%, a Sharpe ratio of 0.12, and volatility of 50.33%, highlighting its heightened risk compared to the benchmark while delivering only modest returns. These metrics suggest that while the strategy can generate positive returns, it does so with considerable risk, indicating the need for careful consideration by investors.

CEO Commentary
Annmarie Gayle, CEO, reported a 31% revenue increase for Q2 2025, driven primarily by the Marine Technology business, which generated 55.3% of total revenue. Despite growth, operating income decreased due to lower gross profit margins from increased hardware sales in Asia, which incurred higher commission costs. The CEO emphasized the significance of their disruptive technologies, particularly the Echoscope and the new NanoGen series, targeting the defense sector. Gayle expressed optimism about future growth, citing an uptick in rental asset utilization and increased inquiries in the Marine Engineering business, positioning the company for future success.

Guidance
The company anticipates continued revenue growth driven by the Marine Technology and Engineering segments, with a focus on increasing market share in defense-related underwater imaging. Annmarie Gayle indicated that while gross profit margins may fluctuate due to external factors, ongoing projects and longer rental periods are expected to enhance performance. Coda Octopus reported a revenue of $7,017,459 and an EPS of $0.08 for Q2 2025, with a net income of $908,762, reflecting a solid financial foundation for the upcoming quarters.

Additional News
In recent developments, Coda Octopus Group has reported securing a $1.5 million order for its Diver Augment Vision Display System (DAVD) Tethered Variant, aimed at expanding its user community. Additionally, the company has announced a $1.4 million engineering services order, highlighting its ongoing commitment to service expansion. Furthermore, Coda Octopus has recently acquired Precision Acoustics Limited, enhancing its portfolio in acoustics sensor and materials, with a focus on medical imaging and Non-Destructive Testing (NDT). These strategic moves underscore the company's initiatives in diversifying its offerings and strengthening its market position.