3QFY24 Results: OPT on Track for Profitability with Funding and New Orders
Ocean Power Technologies reported 3QFY24 revenue of $1.8 million, up 144% Y/Y from $0.7 million in 3QFY23, driven by sales of WAM-V autonomous vehicles and the contract with the Department of Energy. The company has an order book of $3.4 million YTD and growing, with backlogs standing at $3.3 million as of January 31, 2024. The company reported 3QFY24 gross profit of $0.8 million, compared with a profit of $0.1 million in 3QFY23. Gross margin continued its improving trend, driven by the unmanned business and an increase in the higher-margin WAM-V leasing business. Operating expenses increased by 25.4% Y/Y to $8.6 million from $8.0 million in the previous quarter. YTD operating expenses include a one-time expense of $3.2 million toward Paragon Technologies, Inc. litigation. Going forward, operating expenses are expected to be lower, driven by the recent pivot to commercial activities. The pivot to commercial activities has led to a reallocation of headcount, resulting in ~$4.5 million in annual savings and a material reduction in third-party expenditure. 3QFY24 net loss increased marginally to $6.5 million, compared with a net loss of $6.1 million in 3QFY23. Basic and diluted EPS remained flat at ($0.11). At the end of 3QFY24, cash stood at $4.7 million, while debt continued to be zero. Combined cash, including unrestricted cash, cash equivalents, and short-terms investments, stood at $9.3 million. 3QFY24 net cash used in operating activities was ($9.2) million, compared with ($5.1) million in 3QFY23, driven by operating losses, including a one-time Paragon-related expense, the payment of the earnout related to the autonomous vehicles business, investment in inventory, and payment of deferred employment bonuses. As of the end of January, the company’s pipeline was $77 million, up from $14 million last year. About 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.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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