Executive Summary
Ocean Power Technologies (OPTT) reported QQ1 2025 revenue of $1.301 million, essentially flat versus the prior-year quarter, while the company continued to advance its cost-reduction program and operational initiatives. Revenue stability came with a meaningful improvement in profitability momentum evidenced by a 39% year-over-year reduction in operating expenses to $4.92 million, a 71% year-over-year backlog increase to $5.3 million, and a record backlog-to-pipeline trajectory with approximately $92 million of pipeline, the largest in OPTT’s history. Net loss narrowed, yet the quarter remained cash-flow negative, with net cash used in operating activities of $6.12 million and free cash flow of -$6.50 million. Management maintains a path to profitability aimed for calendar Q4 2025, underscoring the transition from a pre-revenue and project-stage business toward recurring revenue through leasing arrangements, services, and select long-term sales. Backed by strategic partnerships (AT&T 5G integration, Teledyne Marine sensors, Naval Postgraduate School collaboration) and offshore testing progress on the Next Generation PowerBuoy, OPTT is positioning itself to convert a robust 92-month pipeline into sustained revenue while controlling burn and preserving a debt-free balance sheet. These dynamics are reinforced by the 71% YoY backlog increase driven by Latin America expansion and long-term leasing contracts, suggesting meaningful leverage as project wins convert to revenue over the coming quarters.
Key Performance Indicators
QoQ: -48.14% | YoY:-32.58%
Key Insights
Revenue: $1.301M in Q1 2025 vs $1.3M in Q1 2024 (YoY +2.28%; QoQ -17.24%).
Gross Profit: $0.447M; Gross Margin 34.36% (YoY -32.58%; QoQ -48.14%).
Operating Income: -$4.473M; Operating Margin -3.44% (YoY +39.37%; QoQ +33.43%).
Net Income: -$4.453M; Net Margin -3.42% (YoY +36.74%; QoQ +33.75%).
EPS: -$0.0543; Diluted EPS -$0.0543 (YoY +54.75%; QoQ +50.64%).
Backlog: $5.3M, up 71% YoY; generates visibility for near-term revenue.
Pipeline: ~$92.0M, the largest in company history, underpinning growth...
Financial Highlights
Revenue: $1.301M in Q1 2025 vs $1.3M in Q1 2024 (YoY +2.28%; QoQ -17.24%).
Gross Profit: $0.447M; Gross Margin 34.36% (YoY -32.58%; QoQ -48.14%).
Operating Income: -$4.473M; Operating Margin -3.44% (YoY +39.37%; QoQ +33.43%).
Net Income: -$4.453M; Net Margin -3.42% (YoY +36.74%; QoQ +33.75%).
EPS: -$0.0543; Diluted EPS -$0.0543 (YoY +54.75%; QoQ +50.64%).
Backlog: $5.3M, up 71% YoY; generates visibility for near-term revenue.
Pipeline: ~$92.0M, the largest in company history, underpinning growth optionality across defense/security and commercial segments.
Cash and equivalents: $3.336M; Total cash/short-term investments: $3.336M (debt-free balance sheet).
Net cash from operating activities: -$6.124M; Investing: -$0.374M; Financing: +$6.529M; Net change in cash: +$0.031M; Free cash flow: -$6.499M.
Balance sheet: Total assets $29.179M; Total liabilities $6.869M; Total stockholders’ equity $22.31M; Cash and cash equivalents $3.182M (excluding restricted cash); No bank debt.
Valuation and leverage: Price to sales 13.71x; Price to book 0.80x; Enterprise value multiple negative (~-3.87x) due to cash-rich balance sheet and minimal debt.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
1.30M |
2.28% |
-17.24% |
| Gross Profit |
447.00K |
-32.58% |
-48.14% |
| Operating Income |
-4.47M |
39.37% |
33.43% |
| Net Income |
-4.45M |
36.74% |
33.75% |
| EPS |
-0.05 |
54.75% |
50.64% |
Key Financial Ratios
operatingProfitMargin
-344%
operatingCashFlowPerShare
$-0.07
freeCashFlowPerShare
$-0.08
Management Commentary
Key strategic and operating takeaways from OPTT’s management call:
- Revenue and earnings trajectory: Management highlighted ongoing progress toward positive cash flow in 2025 and a plan to reach profitability in calendar Q4 2025, underpinned by cost reductions and a growing backlog/pipeline.
- Product and technical progress: More than four months of offshore testing of the Next Generation PowerBuoy in New Jersey, featuring solar and wind augmentation and Merrows AI capabilities, with 100% data uptime and battery SOC >90% during deployment; 15 MWh renewable energy production milestone noted earlier in 2024, illustrating commercial viability of non-grid marine energy solutions.
- Market and partnerships: Four new reseller agreements announced in Aug 2024 to support global critical services; ongoing AT&T 5G integration for PowerBuoys; collaboration with Naval Postgraduate School and Teledyne Marine sensors; expansion plans in Latin America and the Middle East indicates diversification of revenue streams beyond core U.S. government programs.
- Financial discipline: Management cited significant reductions in operating expenses and cash burn; backlog growth driven by long-term leasing and recurring revenue opportunities; cash balance and debt-free structure remain conservative, supporting a capital-light growth path.
- Guidance and outlook: CEO Philipp Stratmann stated the company remains on track to profitability in calendar 2025, reinforcing conviction on the trajectory despite a modest revenue base.
Quotes of note from the call include: "we remain on track to achieve our previously stated goal of attaining profitability during the fourth quarter of calendar 2025" (Philipp Stratmann) and CFO Bob Powers: "our pipeline stands at approximately $92 million and represents the largest pipeline in the history of the company."
we remain on track to achieve our previously stated goal of attaining profitability during the fourth quarter of calendar 2025.
— Philipp Stratmann
our pipeline stands at approximately $92 million and represents the largest pipeline in the history of the company.
— Robert Powers
Forward Guidance
Outlook and sustainability of profitability trajectory: OPTT continues to emphasize a path to profitability by calendar Q4 2025, anchored by a growing pipeline (~$92M) and a backlog ($5.3M, up 71% YoY). The company expects a portion of opportunities in backlog to realize in Q2 and Q3 FY25, signaling a stepped revenue realization in the near term. Key forward-looking indicators to monitor include: (i) conversion rate of backlog and pipeline into revenue, (ii) evolution of gross margins as the mix shifts toward higher-margin services and leasing, (iii) cadence of operating expense containment and any selective reinvestment that could impact near-term profitability, and (iv) progress on strategic collaborations (AT&T 5G, Teledyne sensors, and Latin America/Middle East expansion) that could broaden addressable markets and recurring revenue. Financial health remains watertight with a debt-free balance sheet and modest cash burn, but continued working capital investments (inventory for backlog) and potential financing needs will determine the speed of profitability realization. Key factors investors should monitor include quarterly backlog progression, pipeline conversion rates, lease vs. sale mix, and the impact of next-generation PowerBuoy deployments on revenue visibility.