Coda Octopus Group, Inc.

Third-quarter fiscal 2026 revenue was $7.7 million, up 9.2% from $7.1 million in the prior-year period. Gross profit was $5.1 million versus $4.8 million, and consolidated gross margin was 65.4% versus 68.3% last year. Operating income was $1.5 million versus $1.4 million; pretax income was $1.8 million versus $1.5 million; and net income was $1.4 million, or $0.12 per diluted share, versus $1.3 million, or $0.11 per diluted share. By segment, marine technology revenue was $3.4 million, down 15.2%; acoustic sensors and materials revenue was $1.6 million, up 10.4%; and defense engineering services revenue was $2.7 million, up 68.3%. Management did not provide formal next-quarter or full-year financial guidance on the call, but said marine weakness was mainly timing-related due to geopolitical disruption, while defense and acoustic businesses remain growth drivers.

CEO Annmarie Gayle said the quarter showed the resilience of Coda’s diversified model, with growth in revenue and pretax income despite customer disruption in some international marine markets. She highlighted strategic progress around adoption of proprietary technologies, especially DAVID, Echoscope, Nano, and VoiceHub 4, and framed defense-related programs as a major long-term opportunity. Her tone was optimistic but measured, repeatedly noting that defense programs are longer-cycle opportunities and that marine weakness is being deferred rather than structurally lost.

CFO Mark Kelly, in his first earnings call with the company, emphasized the hard numbers: revenue of $7.7 million, gross profit of $5.1 million, operating income of $1.5 million, pretax income of $1.8 million, and net income of $1.4 million. He noted consolidated gross margin of 65.4%, SG&A of $2.8 million, and operating expenses of $3.5 million, with SG&A helped by lower payroll costs and favorable FX but partly offset by higher contingent consideration expense tied to the PAL earn-out. He also highlighted a strong balance sheet with $31.7 million in cash and cash equivalents, no debt, and total assets of $68.9 million, saying the company has liquidity for organic growth and potential strategic opportunities.

Analysts focused on NanoGen testing timelines, the significance of DAVID’s Navy use-assessment authorization, and whether marine revenue volatility would persist given Middle East instability. Management said the ROV OEM program is moving into SAT trials soon, with the vehicle already in the water and early feedback described as very good; they suggested a design win and broader procurement could follow if trials succeed. On DAVID, management said the Navy approval removes an important hurdle and should help move the technology from deployment into user acceptance and broader procurement, while also noting strong interest from training institutions and a European Navy that could influence other navies. On marine and defense outlook, management said marine weakness is largely timing-related, while defense demand is supported by sustainment work and new-generation programs with multiple prime contractors.