Executive Summary
Ocean Power Technologies delivered a transformative QQ2 2025 quarter, marked by a record quarterly revenue of $2.4 million, a 170% year-over-year increase and a 142% sequential rise, driven by stronger demand in national security, critical infrastructure, and expanding international markets. Management emphasized disciplined cost control, resulting in a 41% reduction in operating expenses to $4.7 million, and a material reduction in cash burn, positioning OPTT toward profitability by calendar year 2025. The company is layering in recurring revenue via as-a-service offerings and formal maintenance services, while expanding strategic partnerships in Latin America and the Middle East to diversify the revenue mix and elevate backlog visibility.
Looking ahead, OPTT highlights a viable path to profitability by the end of calendar 2025, supported by a growing pipeline and a disciplined operating model. However, near-term liquidity remains a consideration, with year-to-date operating cash flow of around -$4.77 million and a cash balance of roughly $2.3 million at quarter-end, underscoring the need to convert pipeline into backlog and revenue timely while managing costs. The firm remains focused on leveraging its WAM-V platforms, PowerBuoys, and AI-enabled autonomous systems to capture defense and offshore energy opportunities, particularly in LATAM and the Middle East, while piloting expanded service revenues that can extend the economic life of deployed assets.
Key Performance Indicators
QoQ: 85.86% | YoY:171.99%
Key Insights
Revenue: $2.418 million in Q2 2025, up 170% YoY and 142% QoQ; Gross margin: 32.9% ($0.795 million gross profit on $2.418 million revenue); EBITDA: -$3.915 million; Operating income: -$3.915 million; Net income: -$3.913 million; EPS: -$0.036; Operating expenses: $4.7 million, down from $8.0 million prior year (41% reduction); Net cash provided by operating activities (YTD): -$10.9 million; Cash and equivalents/short-term investments: ~$2.3 million; Backlog: ~$3.6 million at quarter end; Pipeline:...
Financial Highlights
Revenue: $2.418 million in Q2 2025, up 170% YoY and 142% QoQ; Gross margin: 32.9% ($0.795 million gross profit on $2.418 million revenue); EBITDA: -$3.915 million; Operating income: -$3.915 million; Net income: -$3.913 million; EPS: -$0.036; Operating expenses: $4.7 million, down from $8.0 million prior year (41% reduction); Net cash provided by operating activities (YTD): -$10.9 million; Cash and equivalents/short-term investments: ~$2.3 million; Backlog: ~$3.6 million at quarter end; Pipeline: ~>$90 million, with ongoing transitions to backlog and revenue; Leverage ratios: Current ratio 2.79, Quick ratio 1.38; Revenue mix emphasis: Latin America contributed about one-third of revenue in the quarter.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
2.42M |
171.99% |
85.86% |
| Gross Profit |
795.00K |
62.91% |
77.85% |
| Operating Income |
-3.92M |
47.69% |
12.47% |
| Net Income |
-3.91M |
45.75% |
12.13% |
| EPS |
-0.04 |
69.92% |
33.52% |
Key Financial Ratios
operatingProfitMargin
-161.9%
operatingCashFlowPerShare
$-0.04
freeCashFlowPerShare
$-0.04
Management Commentary
Key management themes and takeaways from the QQ2 2025 earnings call:
- Growth and profitability trajectory: Philipp Stratmann stated that the quarter was transformational with revenue reaching a record $2.4 million and that the business is on track to achieve profitability in calendar year 2025. Quote: “second quarter of fiscal 2025 was another transformational period for OPT… on track toward achieving positive cash flow by the end of calendar year 2025.”
- Cost discipline and efficiency: Bob Powers highlighted a 41% year-over-year reduction in operating expenses, aiding a substantial improvement in the loss profile. Quote: “we reduced year-over-year operating expenses by 41% and operating cash burn by 39%.”
- Recurring and service revenue: Management emphasized the increasing contribution of leases-as-a-service and the formal service offering, signaling a path to longer-term, stable cash flows beyond asset sales. Quote: “we are definitely seeing an increase in leases as-a-service type models… and we launched that service offering.”
- Geographical expansion and partnerships: The call underscored Latin America and the Middle East as growth engines, with a LATAM partnership entailing $3 million in purchase orders over 36 months and multiple Middle East partnerships to exhibit and deploy WAM-V technologies. Quote: “In Latin America, we announced a partnership that includes $3 million in purchase order commitments over 36 months.”
- Backlog and pipeline management: The company noted that pipeline remains robust while converting a portion into backlog and revenue, with a current backlog of approximately $3.6 million and a steady flow of opportunities. Quote: “our pipeline has remained at a very similar level to where it's been for a while… backlog and revenue are being driven by this pipeline.”
record quarterly revenue of $2.4 million, our highest ever
— Philipp Stratmann
we remain on track to profitability in the fourth quarter of calendar 2025
— Philipp Stratmann
Forward Guidance
Guidance assessment: OPTT reiterated its goal of profitability by the end of calendar year 2025, underpinned by cost discipline, expanding recurring revenue streams, and a growing project backlog. The company also signaled continued expansion through regional partnerships (LATAM and Middle East) and defense-adjacent programs (Project Overmatch). Our view is that achievability hinges on: (1) converting a meaningful portion of the ~$90 million-plus pipeline into backlog and then into revenue over the next several quarters, (2) sustaining OpEx at current cost-efficient levels to preserve margin expansion as revenue scales, and (3) expanding maintenance/service revenue to create durable cash-flow tailwinds. Risks include: slower-than-expected order intake, longer sales cycles in defense and offshore energy, working capital constraints given negative free cash flow, and potential externalities (regulatory, geopolitical, supply-chain). Key monitorables: quarterly revenue progression, backlog-to-revenue conversion rate, service-maintenance revenue growth, and free cash flow trends as profitability approaches calendar 2025 year-end.