This article first appeared on GuruFocus .
-
Total Revenue:$6.7 million, up 28.8% from $5.2 million in Q1 2025.
-
Marine Technology Business Revenue:$3.4 million, a 47.4% increase from $2.3 million in Q1 2025.
-
Acoustics Sensors and Materials Business Revenue:$1.6 million, up 20.7% from $1.3 million in Q1 2025.
-
Defense Engineering Services Business Revenue:$1.8 million, a 9.2% increase from $1.6 million in Q1 2025.
-
Gross Profit:$4.4 million, compared to $3.4 million in Q1 2025.
-
Consolidated Gross Margin:65.1%, slightly down from 65.8% in Q1 2025.
-
Marine Technology Business Gross Margin:75.3%, up from 73.1% in Q1 2025.
-
Acoustics Sensors and Materials Business Gross Margin:66.8%, up from 61.7% in Q1 2025.
-
Defense Engineering Services Business Gross Margin:44.1%, down from 58.9% in Q1 2025.
-
Operating Income:$1.0 million, a 52.6% increase from $0.6 million in Q1 2025.
-
Operating Margin:15.1%, up from 12.7% in Q1 2025.
-
Net Income:$0.93 million or $0.08 per diluted share, compared to $0.91 million or $0.08 per diluted share in Q1 2025.
-
Cash and Cash Equivalents:$30.5 million as of January 31, 2026, up from $28.7 million on October 31, 2025.
Release Date: March 17, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
-
Coda Octopus Group Inc ( NASDAQ:CODA ) reported a 28.8% increase in revenue for the first quarter of 2026 compared to the same period in 2025.
-
The Marine Technology Business, a core segment, saw a 47.4% increase in revenue, driven by strong Echoscope sales, particularly in the Asia region.
-
The company launched the NANO Gen Series, an ultra-small form 3D sonar, expanding its market reach in both large and small payloads.
-
The Acoustics Sensors and Materials Business achieved a 20.7% increase in revenue with a higher gross profit margin of 66.8%.
-
Coda Octopus Group Inc ( NASDAQ:CODA ) maintains a strong balance sheet with $30.5 million in cash and no debt as of January 31, 2026.
Negative Points
-
The Defense Engineering Services Business experienced delays in receiving contract awards due to funding issues, impacting revenue growth.
-
Gross margin for the Defense Engineering Services Business decreased to 44.1% from 58.9% due to changes in the mix of engineering projects.
-
Operating expenses increased by 21.3%, primarily due to currency exchange rate fluctuations impacting costs.
-
The company faces challenges in scaling its Echoscope sales to previous peak levels, with long gestation periods for defense programs being a significant barrier.
-
The total addressable market for the DAVD technology in the U.S. remains uncertain due to ongoing price negotiations with the Navy.
Q & A Highlights
Q: Can you size the total addressable market in dollar terms in the U.S. for the DAVD? A: Annmarie Gayle, CEO: It's difficult to provide a precise number as it depends on the sale price accepted by the Navy. Historically, the military diving system has been priced at USD 50,000 per unit, but this is still under negotiation.
Q: What is the timing for the unmanned underwater vehicle market to become a revenue opportunity for Coda? Are there any design wins? A: Annmarie Gayle, CEO: We expect to see small batches of the NANO Gen Series acquired in the third and fourth quarters under product improvement programs. These are not replacements but enhancements for existing vehicles.
Q: Do you need to be part of a design win for new generation vehicles? When is the targeted date for these vehicles? A: Blair Cunningham, President of Technology: We are increasingly involved in early discussions for new platforms. Some platforms are in the design phase, and we expect initial sales beyond the fourth quarter as defense communities pivot to shorter design cycles.
Q: How do rising oil prices impact demand for your products? A: Annmarie Gayle, CEO: Rising oil prices do not immediately impact demand for our products as development cycles are not that responsive to oil price changes.
Q: Why hasn't the Marine Technology revenue returned to its peak levels from fiscal 2021? A: Annmarie Gayle, CEO: The commercial marine market remains strong, but growth requires integration into defense programs, which have long gestation periods. We are focusing on near-term opportunities through product improvement programs.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
