2QFY24 Results: Revenue Increases 193%; Pipeline Doubles to $93 Million from Last Year
Ocean Power Technologies reported 2QFY24 revenue of $0.9 million, up 193% Y/Y from $0.3 million in 2QFY23, driven by sales of WAM-V autonomous vehicles, the contract with the Department of Energy (DOE), and an increase in strategic consulting services. The previous quarter had revenue of $0.2 million from leased boats. The company reported 2QFY24 gross profit of $0.5 million, compared with a profit of $39,000 in 2QFY23. Improvements in gross margin were driven by the autonomous vehicle business, primarily through an increase in the higher-margin WAM-V leasing business and strategic consulting services. Operating expenses increased by 24.7% Y/Y to $8.0 million, driven by an increase in incremental investments in people and systems to support growth. Going forward, operating expenses are expected to be lower, driven by the recent pivot to commercial activities that should drive a reduction in headcount and third-party expenditure. 2QFY24 net loss increased to $7.2 million, compared with a net loss of $4.8 million in 2QFY23. Basic and diluted EPS decreased to ($0.12) from ($0.09) in 2QFY23. At the end of 2QFY24, cash stood at $3.3 million, while debt continued to be zero. Combined cash, including unrestricted cash, cash equivalents, and short-terms investments, stood at $18.9 million. 2QFY24 net cash used in operating activities was ($7.5) million, compared with ($5.9) million in 2QFY23, driven by operating losses, payment of the earnout related to the autonomous vehicles business, investment in inventory, and payment of deferred employment bonuses. Sulmara, a prominent participant in offshore services, granted OPT a substantial order in October 2023 valued at $1.6 million. As of October 31, 2023, the company’s pipeline was $93 million, up 221% Y/Y from $42 million. Typically, 60-70% of order activity is with government agencies, while 20-25% is with energy companies. The pipeline consists of 30-40% WAM-Vs, while 50% of the pipeline is PowerBuoys. The company’s pipeline reflects a significant increase in defense and security activity, along with the expansion of commercial opportunities, driven by growing interest from offshore wind companies for autonomous monitoring, surveillance, and survey-related services during various stages of the project development cycle. The company expects contracted orders for FY24 to be $15 million, which is more than double the amount for FY23, driven by the ramp in its DaaS line, WAM-V sales and leases, coupled with consulting business inflows. The company is building out WAM-V inventory to enable the rental or lease of fleet vehicles for short-term client requirements.Ocean Power Technologies is developing and commercializing its proprietary systems that generate electricity by harnessing the renewable energy of ocean waves. The company uses proprietary technologies that convert the mechanical energy created by the heaving motion of ocean waves into electricity. The company's principal product is its PB3 PowerBuoy?, which is designed to generate power for use independent of the power grid in remote offshore locations. It consists of a main hull structure loosely moored to the seabed and surrounded by a floating buoy-like device that can freely move up and down in response to the passage of the waves.
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