Ocean Power Technologies (OPTT -14.83%), a provider of renewable energy and autonomous maritime systems, reported earnings for fiscal 2025 on July 24, 2025. The company delivered GAAP revenue of $5.9 million, an increase of 6% over the prior year. Gross profit (GAAP) declined sharply to $1.7 million compared to $2.8 million in FY2024. Operating expenses were cut by 28%, leading to a reduced net loss of $21.5 million, down from $27.5 million for FY2024. There were no consensus analyst estimates to compare against, so performance is measured against prior-year results. Overall, this period showed progress in backlog and cost reduction, but ongoing challenges in profitability and margin.
| Metric | FY25(Year ended Apr 30, 2025) | FY24(Year ended Apr 30, 2024) | Y/Y Change |
|---|---|---|---|
| EPS (GAAP) | $(0.17) | $(0.47) | Improved |
| Revenue | $5.9 million | $5.5 million | 7.3 % |
| Gross Profit | $1.7 million | $2.8 million | (39.3%) |
| Operating Expenses | $23.3 million | $32.2 million | (27.6 %) |
| Net Cash Used in Operating Activities | $18.6 million | $29.8 million | (37.6 %) |
Company Overview and Key Drivers
Ocean Power Technologies designs and builds renewable energy systems and autonomous marine robots for offshore monitoring, defense, and energy markets. Its core product lineup includes the PowerBuoy®, a platform that converts wave, solar, and wind energy into electrical power; WAM-V® autonomous surface vehicles (modular, AI-enabled boats for research and surveillance); and the Merrows™ command and control system, which integrates sensor feeds for maritime domain awareness.
The company's main focus has been expanding market reach and building recurring revenue streams. Key elements of growth include product innovation, entering new geographies, forming strategic partnerships, and transitioning to models like Data as a Service and Robotics as a Service. These efforts are supported by a growing pipeline and backlog, now at record levels, but financial returns are yet to match the expectations set by these strategic moves.
Quarter in Detail: Financials, Products, and Strategic Shifts
The company posted a 6% year-over-year rise in GAAP revenue. However, this modest uptick came with a marked contraction in gross profit and margin. Gross profit fell from $2.8 million in FY2024 to $1.7 million. The cost of revenue (GAAP) increased by $1.5 million year over year, impacting overall profitability despite higher sales. The company did not specifically explain the margin drop, though possible factors include a change in product mix or higher production costs.
The company managed to lower operating expenses significantly, from $32.2 million to $23.3 million (GAAP). As a result, the company reduced its net loss (GAAP) to $21.5 million from $27.5 million for FY2024. Net cash used in operating activities (GAAP) was $18.6 million, compared to $29.8 million in FY2024, showing that the company continues to rely on new external capital such as its $17.7 million At The Market equity offering.
The fourth quarter saw key operational milestones. The company shipped its first AI-enabled Merrows™ PowerBuoy®—a renewable-powered platform with artificial intelligence that provides persistent offshore power and data—to a Middle Eastern customer. It also deployed a PowerBuoy® integrated with 5G technology and advanced subsea sensors for maritime surveillance. The WAM-V® autonomous vessels, specifically designed for unmanned research and defense operations, were demonstrated for an international defense agency. These deployments highlight a move toward a global defense and security customer base, but material increases in recurring revenue from such solutions remain underway rather than realized.
Strategic partnerships expanded significantly. Notable contracts included a $3 million reseller deal in Mexico and distribution alliances in Colombia, the United Arab Emirates, and Brazil. A multi-million-dollar purchase was committed by Elektron SAS, a Colombian engineering firm, underscoring growing international interest. Additional ecosystem partnerships, such as with Teledyne Marine for AI and sensor payload integration and Red Cat Holdings for military drone collaboration, have further positioned the company’s technology as part of a broader network of maritime robotics and data solutions.
Regulatory milestones included receipt of Department of Defense Facility Security Clearance, which enhances eligibility for sensitive U.S. government contracts. ISO 9001 certification was also attained, supporting future business opportunities requiring strict quality standards. The order backlog surged to $12.5 million (up from $4.9 million) as of April 30, 2025 (Q4 FY2025), marking record levels and suggesting increased visibility for next year’s revenue. However, revenue realization from backlog is not guaranteed, as customer timelines and execution risks remain factors.
One-time events included a payment related to the company's autonomous vehicle business acquisition, which reflected that business exceeding agreed performance targets.
Looking Ahead: Guidance and Risks
Management did not provide explicit financial guidance for fiscal 2026. Instead, it highlighted qualitative factors such as record backlog, expanded pipeline (up 88 % to $137.5 million), and increased international interest as reasons for optimism. The company emphasized it expects continued progress in recurring revenue and platform adoption, but did not issue concrete targets for revenue, margin, or operating profit.
For the upcoming quarters, investors may focus on several key areas: how further international and defense deals contribute to recurring revenue. The company finished fiscal 2025 with $6.9 million in cash on hand, up from $3.3 million. Ocean Power Technologies does not currently pay a dividend.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
