The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Shawn Severson - Water Tower Research - Analyst
: Phil, can you talk a little bit about how the recurring revenue side and the as a service strategy is going? It seems like you're getting a lot more
deployments even outside of some defense applications. How is this -- how is the recuring revenue model fitting into the commercialization you're
seeing now of the business?
Question: Shawn Severson - Water Tower Research - Analyst
: So as I think about a model going out, every time you get these equipment, the equipment sales themselves, right? Should we start thinking about
or are you going to start guiding towards some type of a reoccurring revenue pattern that we should think of?
So as you get towards your cash flow breakeven that coming, I assume mostly from equipment sales, but then we can look at it and think of these
tails of cash flow that come out from the equipment sales. Is there any framework or reference around how we should model that or think about
that from equipment sales to recurring revenue.
Question: Shawn Severson - Water Tower Research - Analyst
: My last question is you talked a little bit about Latin America and South America. Are these projects that you're working on or getting deployments
in, are these -- you have the potential to go global, I guess? I mean, are you working with the customers, obviously, in this location.
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DECEMBER 17, 2024 / 2:00PM, OPTT.A - Q2 2025 Ocean Power Technologies Inc Earnings Call
But do you view this as a -- not really a test -- nothing to test anymore, but really like rollouts of seeing how this works and that you'd be able to
follow that customer around the world for other oil and gas development projects or ongoing ones?
Question: Jeffrey Grampp - Alliance Global Partners - Analyst
: I want to start on the Middle East. You guys highlighted a number of partnerships that you're kind of stacking together out there, and I know you've
highlight of that area in particular, as a big opportunity for you going forward. What do you really think is kind of the path forward there in terms
of kind of getting more orders and scaling that from a revenue standpoint, converting that pipeline.
Is that something that happens in kind of the nearest term, maybe calendar '25? Is that something that takes a little bit of a longer timeline to ripe
in? How should we think about the maturation of that market, in particular for you?
Question: Jeffrey Grampp - Alliance Global Partners - Analyst
: Great. That's really helpful. For my follow-up, what would you guys say this path to profitability over the next, let's call it, 12 months? what's the
biggest risk or hurdle to maintaining the trajectory that you guys are building on there? What are the, I guess, main factors that keep you guys up
at night that could derail that? And then what are you guys doing maybe preemptively to mitigate any of those risks and keep you guys on track?
Question: Brian Gordon - Water Tower Research. - Analyst
: Sorry about that. I was hoping we could get a bit of an update of where we are in terms of the backlog and the pipeline. And kind of my follow-up
question would be, how should we think about how those two revenue streams get converted into actual recognized revenue?
Question: Brian Gordon - Water Tower Research. - Analyst
: Definitely. That makes sense. Have you announced though, like what the actual backlog is given that the pipeline is roughly at that kind of $90
million plus number?
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DECEMBER 17, 2024 / 2:00PM, OPTT.A - Q2 2025 Ocean Power Technologies Inc Earnings Call
Question: Brian Gordon - Water Tower Research. - Analyst
: Great. And I guess if I could sneak in one last question. You guys have talked for the last couple of quarters at least about breakeven in the fourth
quarter of this fiscal year. Have you talked about what that OpEx number will be that you guys will reach that break even on?
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