Focus on Commercialization Bolsters Profitability Achievement Expectations in Calendar Year 2025
Ocean Power Technologies, Inc. (OPT) substantially completed its research and development (R&D) phase and has witnessed meaningful progress in orders, pipeline, and backlog across its business. Additionally, the company has reallocated headcount toward execution and commercialization to bolster its next phase of evolution. OPT’s cutting-edge suite of products provides comfort against macro headwinds and also positions the company for commercial success and profitability in 2025. The company’s focus on utilizing its resources and efforts on commercialization led to the divestment of its strategic consulting team. Additionally, recent R&D achievements, including the WAM-V charging demonstration and the Mass-On-Spring-Wave-Energy-Converter (MOSWEC) developments, have resulted in headcount reallocation and a material reduction in third-party expenditure. Riding on the back of recent contract wins, expansion in commercial pipelines, and prudent cost-saving measures, OPT expects to achieve profitability during calendar year 2025. The total product pipeline remains robust: Power Buoy ($40 million), Power Buoy & WAM-V ($31 million), and WAM-V ($22 million). Data-as-a-Service (DAAS) presents an attractive market opportunity for OPT with a target market estimated at $80 million. The market is expected to be driven by opportunities in the defense, security, and hydrographic sectors. Additionally, the deployment of WAM-V and MDAS in multiple applications is expected to drive growth and profitability in these lucrative sectors. A strategic shift to a “as-a-Service” model with a focus on delivery is expected to complement gross profit margin performance. Additionally, optimized headcount reduces quarterly spending by more than $1.1 million versus budget. All these strategic initiatives are expected to drive EBITDA break-even in FY26, with sufficient cash leeway to run operations until that period. The balance sheet remained healthy, with combined cash and marketable securities at $18.9 million and no bank debt as of October 31, 2023.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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