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    OPTT
    Earnings call· Apr 2026(Q4 FY26)

    Ocean Power Technologies, Inc. OPTT

    Jul 24, 2026 Source

    Executive summary

    Ocean Power Technologies Q4 FY26 — Record Backlog and Strategic Expansion

    Ocean Power Technologies concluded FY26 with record backlog and strategic advancements, including a significant Coast Guard contract and a subsea technology acquisition. The company is transitioning from individual products to integrated operational infrastructure, focusing on execution and recurring revenue in FY27. Despite increased losses and operating expenses due to strategic investments and project timing, management expressed confidence in its strengthened market position and long-term growth opportunities.

    Highlights

    5

    • Achieved record backlog of $19.8 million, representing a 58% increase over the prior fiscal year.

    • Secured the largest deployment and recurring revenue contract in company history, valued at approximately $6.5 million for the Coast Guard project.

    • Expanded sales pipeline to $142.3 million at year-end, up from $137.5 million a year ago.

    • Completed the acquisition of strategic subsea technology assets, broadening operational capabilities.

    • Successfully deployed 5 buoys under customer contracts, demonstrating operational execution.

    Concerns

    5

    • Reported a gross loss of $8.1 million for FY26, compared to a gross profit of $1.7 million in FY25, primarily due to project mix and strategic low-margin contracts.

    • Net loss for FY26 increased to $43.7 million, up from $21.5 million in FY25.

    • Operating expenses rose to $31.7 million in FY26 from $23.3 million in FY25, driven by increased stock-based compensation and headcount.

    • Net cash used in operating activities increased to $22.7 million in FY26 from $18.6 million in FY25.

    • Shareholders asked to authorize a reverse stock split to maintain NYSE American listing.

    Guidance & targets

    2
    CategoryTargetConfidence
    Fiscal 2027 Priorities
    Execute on growing backlog, convert pipeline into contract awards, expand recurring revenue, deepen customer relationships, advance AI-enabled maritime autonomy platform.
    high materiality
    High
    Gross Margin Profile
    35% to 55%
    medium materiality
    Medium

    Operational metrics

    7
    Sales pipeline
    $142.3Mvs $137.5M a year ago
    FY26

    Represents the total value of prospective opportunities at year-end.

    Noncash stock-based compensation
    $9.5M
    FY26

    Included within operating expenses for the fiscal year.

    Cash, cash equivalents and short-term investments
    $8.7Mvs $6.7M at beginning of FY
    Q4 FY26

    Total liquidity at the end of the fiscal year.

    Coast Guard project related pipeline
    $6.5M
    FY26

    Portion of the sales pipeline specifically related to the Coast Guard project.

    Buoys deployed under customer contracts
    5
    Q4 FY26

    Total number of buoys currently deployed with customers.

    Buoy useful operating life
    up to 15 years
    Long-term

    Expected operational lifespan of the buoys, enabling redeployment and long-term revenue generation.

    Buoy manufacturing capacity
    roughly a buoy a month
    Current

    Current production rate for buoys, with flexibility to increase based on demand.

    Industry KPIs

    2
    MetricValueDetails
    Orders bookings growth58%%
    Backlog by segment end market$19.8MUSD

    Orderbook & backlog

    1
    Total backlog$19.8MApril 30, 2026

    up 58% over prior year

    Reflects continued conversion of opportunities across defense, government security, offshore energy and commercial markets, providing increased visibility into future revenue.

    Deals & partnerships

    2
    UndisclosedAcquisition of strategic subsea technology assets

    Extends capabilities from the ocean surface towards the seabed, broadening operational infrastructure for customers. Expected to advance discussions with parts of the U.S. government.

    United States Coast GuardLargest deployment and recurring revenue contract for maritime security mission15-month period of performance

    Validates OPT's technologies for active maritime security alongside premier defense partners. Demonstrates the role of operational infrastructure in enabling persistent maritime awareness and long-duration operations. Discussions ongoing for potential extensions and broader applications.

    Risks & headwinds

    3
    Need for reverse stock split

    Authorization requested from shareholders

    Mitigation: Aimed at maintaining NYSE American listing and preserving long-term access to capital markets, supporting future growth.

    Lower gross margins on strategic contractsFY26

    Gross loss of $8.1M in FY26 vs. gross profit of $1.7M in FY25

    Mitigation: Accepted at lower margins to establish important customer relationships and position the company for larger, higher-margin opportunities in the future. Management expects margins to return to 35-55% range.

    Increased net loss and cash burnFY26

    Net loss of $43.7M in FY26 vs. $21.5M in FY25; Net cash used in operating activities of $22.7M in FY26 vs. $18.6M in FY25

    Mitigation: Reflects continued investment in capabilities, workforce, and strategic growth initiatives. Management is actively managing cash and balancing OpEx/CapEx to build out the fleet for future revenue acceleration.

    What to watch in Q1 FY27

    4

    Conversion of sales pipeline to contract awards

    next quarter
    Current$142.3M sales pipeline
    TargetIncreased contract awards and backlog

    Why it matters

    Indicates the company's ability to translate prospective opportunities into firm revenue-generating contracts, crucial for future growth.

    Our focus entering fiscal 2027 is straightforward: execute on growing backlog, continue converting our pipeline into contract awards, expand recurring revenue opportunities...

    Q&A highlights

    5

    What portion of the sales pipeline is related to Anduril/Coast Guard, and what is the historical conversion rate from pipeline to backlog?

    Approximately 50% of the pipeline is defense/national security-related, and 50% is commercial (energy infrastructure). The Coast Guard project, where OPT partners with Anduril, accounts for about $6.5 million of the pipeline. The company defines its qualified pipeline strictly as real projects with ongoing detailed discussions and bids, but a specific conversion rate metric was not provided.

    “Specifically on this contract, I think it's important -- I think your question was specific what of it is Anduril related, if I recall your question correctly. We are partnering with Anduril on the Coast Guard project, but we're not a subcontractor to Anduril on the Coast Guard project. ... We announced publicly, I think, about $6.5 million of our pipeline is related to the United States Coast Guard project.”

    asked by Sameer Joshi · answered by Philipp Stratmann

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Shift Towards Integrated Operational Capability

    Ocean Power Technologies is evolving beyond individual products to deliver integrated operational capability, driven by market demand for resilient operational infrastructure. This involves integrating autonomous systems, intelligent sensing, communications, AI-enabled software, and reliable offshore power. The company's strategy focuses on assembling these capabilities into a common operational infrastructure to support complex maritime missions across various domains.

    02

    Coast Guard Contract and Maritime Security

    The Coast Guard deployment represents the largest deployment and recurring revenue contract in the company's history, validating OPT's technology for active maritime security missions. This project demonstrates the role of operational infrastructure in enabling persistent maritime awareness and long-duration operations. The company is in ongoing discussions with the Coast Guard and other government entities for potential extensions and broader applications of this service.

    03

    Subsea Technology Acquisition and Market Expansion

    OPT completed a strategic acquisition of subsea technology assets, extending its capabilities from the ocean surface towards the seabed. This move broadens the operational infrastructure offered to customers, aligning with the increasing integration of surface and subsea maritime operations. The acquisition is expected to advance discussions with parts of the U.S. government regarding underwater opportunities.

    04

    Financial Performance and Strategic Investments

    Fiscal 2026 was characterized by strategic investments and operational execution, leading to a gross loss of $8.1 million and a net loss of $43.7 million. These results reflect the timing of📎 customer deployments, investments in long-term growth capabilities, and certain strategic contracts accepted at lower margins to establish key customer relationships. The company also increased operating expenses by $8.4 million, primarily due to stock-based compensation and headcount.

    05

    Backlog and Sales Pipeline Growth

    The company concluded FY26 with a record backlog of $19.8 million, a 58% increase from the prior year, providing increased visibility into future revenue. The sales pipeline also remained strong at $142.3 million. Management emphasized that the qualified pipeline consists of real projects with ongoing detailed discussions and negotiations, indicating potential for future contract conversions.

    06

    Capital Management and Fleet Expansion

    OPT actively manages its accounts receivable and balances OpEx with CapEx. The company plans to expand its fleet of maritime drones and buoys to accelerate revenue conversion and respond more quickly to customer demands. The goal is to build a larger fleet that can be readily deployed, enabling faster delivery and generating free cash flow over the long-term⏳ operating life of the buoys (up to 15 years).

    AI-generated summary of the company’s earnings call. Not investment advice.