Executive Summary
Ocean Power Technologies (OPTT) reported a modest Q4 2024 revenue of $1.57 million, with full-year revenue of $5.5 million, up 102% year over year. The quarter delivered a 54.8% gross margin on $0.86 million gross profit, marking continued improvement in profitability from the company’s unmanned vehicle and WAM-V leasing businesses, even as the company remains net loss-making due to non-recurring litigation-related costs and ongoing operating investments. Management signaled a deliberate path toward profitability in calendar year 2025, aided by a concentration of high-margin, recurring revenue from WAM-V and the Merrows platform, a sizable backlog-to-revenue conversion opportunity, and an industry shift toward autonomous ocean systems.
Key Performance Indicators
QoQ: -12.28% | YoY:60.41%
Key Insights
Revenue: Q4 2024 revenue of $1.57M; YoY growth 60.4%, QoQ -12.3%. Full-year revenue: $5.50M; YoY growth 102%. Gross Profit: Q4 2024 gross profit $0.862M; gross margin 54.8%; full-year gross profit $2.80M. Operating Expenses: Q4 2024 operating expenses $7.50M; full-year $32.20M, including approximately $3.9M of extraordinary costs related to litigation and other shareholder actions. Operating Income: Q4 2024 operating loss of $6.72M; full-year operating loss aligns with the net loss of the period...
Financial Highlights
Revenue: Q4 2024 revenue of $1.57M; YoY growth 60.4%, QoQ -12.3%. Full-year revenue: $5.50M; YoY growth 102%. Gross Profit: Q4 2024 gross profit $0.862M; gross margin 54.8%; full-year gross profit $2.80M. Operating Expenses: Q4 2024 operating expenses $7.50M; full-year $32.20M, including approximately $3.9M of extraordinary costs related to litigation and other shareholder actions. Operating Income: Q4 2024 operating loss of $6.72M; full-year operating loss aligns with the net loss of the period due to the same drivers. Net Income: Q4 2024 net loss of $6.72M; full-year net loss $27.5M. EPS: Q4 2024 diluted EPS -$0.11; full-year EPS -$0.11. Backlog: $4.9M as of April 30, 2024 (vs $4.0M prior year). Pipeline: current pipeline cited at $85M (opportunities under negotiation/NDAs). Cash & liquidity: cash and equivalents + short-term investments total $3.15M; net debt remained negative (net cash) at approximately -$0.58M. Backdrop: as of Q4, management projected contracted orders for fiscal 2025 of $12.5M with revenues near that level, supported by ongoing expansion into Latin America and the Middle East. Backstop: management highlighted a step-down in OpEx through headcount reductions and tighter cost controls, with an emphasis on scalable, high-margin service and solution delivery partnerships.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
1.57M |
60.41% |
-12.28% |
| Gross Profit |
862.00K |
743.28% |
6.03% |
| Operating Income |
-6.72M |
32.04% |
13.17% |
| Net Income |
-6.72M |
29.54% |
-3.27% |
| EPS |
-0.11 |
35.29% |
0.00% |
Key Financial Ratios
operatingProfitMargin
-427%
operatingCashFlowPerShare
$-0.08
freeCashFlowPerShare
$-0.11
Management Commentary
Key management themes from the earnings call: 1) Commercial inflection anchored in a targeted go-to-market with a dedicated sales team and strategic partners (e.g., Teledyne, SES, Unique Group, Red Cat). Stratmann attributed the revenue acceleration to targeted market segments, faster conversion from conversations to POs, and a shift to commercially viable, readily deployable solutions rather than broad R&D-only offerings. 2) Backlog and pipeline dynamics underscored by a 4Q24 backlog of under $5M and an $85M pipeline, with a first-quarter emphasis on converting opportunities into backlog and revenue, and a guided FY25 contracted orders of $12.5M. Stratmann cited geographic expansion (Latin America, Middle East) and flow-through from existing customers as drivers of shortening sales cycles. 3) Margin progression driven by WAM-V leasing and higher-margin unmanned vehicle work, contributing to stabilizing gross margins in the 50%–55% range. 4) Cost discipline and governance response following a dissident shareholder episode, including headcount optimization and reductions in third-party spend to support a path to profitability. 5) Merrows and strategic alliances (Red Cat, Teledyne, Unique Group, SES, AltaSea) highlighted as catalysts for expanding surveillance capabilities, autonomous vessel deployments, and integrated ocean-data solutions.
"contracted orders for fiscal '25 are going to be $12.5 million... and revenues will be very similar to that."
— Philipp Stratmann
"We've further controlled and contained third-party expenditures. We've gone through a further head count optimization and really focusing on what is needed to be delivered. And what's needed to be delivered is converting our systems into backlog into revenues..."
— Philipp Stratmann
Forward Guidance
Management states FY2025 contracted orders guidance of $12.5 million with revenues expected to be similar, implying a revenue ramp from the FY2024 base as backlog converts to revenue. The commentary emphasizes ongoing cost containment, capital-efficient expansion, and partnerships to accelerate growth. Key risk factors include execution of backlog-to-revenue conversion, potential delays in international shipments, and macro/defense procurement cycles. The company targets profitability in the second half of calendar 2025, supported by a combination of higher-margin WAM-V activities, continued backlog conversion, and a leaner cost structure. Investors should monitor: progress toward the $12.5M contracted orders target, backlog progression, annualized gross margin stability, and the rate of operating expense reduction toward profitability thresholds; also watch for updates on liquidity and any required equity financing given the current cash burn and working capital needs.