Coda Octopus Group (CODA) investor relations material

Executive summary

• Consolidated revenue increased 9.2% year-over-year to $7.7 million, driven by strong Defense Engineering Services and Acoustic Sensors and Materials performance, offsetting a 15.2% decline in Marine Technology revenue due to geopolitical instability in the Middle East and Asia.

• Net income for the quarter rose 8.3% to $1.4 million, with operating income up 11.1% and pre-tax income up 16%, despite a higher effective tax rate and increased income tax expense.

• Diversified business model and new product launches, such as the NANO Gen Series and DAVD systems, supported growth and offset regional challenges.

• Achieved a milestone by transitioning from an accumulated deficit to positive retained earnings for the first time.

• Cash position increased by $3.0 million since October 31, 2025, reaching $31.7 million at quarter-end.

Financial highlights

• Total revenue was $7.7 million, up from $7.1 million in Q3 2025, with gross profit at $5.1 million and a consolidated gross margin of 65.4% (down from 68.3% year-over-year).

• Operating income was $1.5 million (19.9% margin), net income after tax was $1.4 million ($0.12 per diluted share), and pre-tax income was $1.8 million.

• Cash and cash equivalents stood at $31.7 million, with no debt and working capital of $49.2 million.

• R&D expenditures increased 27.4% to $0.7 million; SG&A expenses were $2.8 million, representing 36.1% of revenue (down from 40.6% year-over-year).

• Quarterly EPS was $0.12 (basic and diluted), up from $0.11 in the prior year.

Outlook and guidance

• Management expects continued impact from geopolitical instability in the Middle East, global trade policy volatility, and foreign currency fluctuations on customer demand and project timing.

• Sufficient liquidity is anticipated for the next twelve months, but projections are subject to substantial uncertainty due to macroeconomic and geopolitical risks.

• Continued focus on expanding adoption of proprietary underwater technologies in defense and autonomous vehicle markets.