Ocean Power Technologies Inc Q4 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Jeff Grampp - Alliance Global Partners - Analyst : Good morning, guys, and thank you for the time. I was curious, first off, maybe we can start on the backlog side of things. You guys had some nice growth sequentially and even over the last few months since that number, you guys have continued to announce some nice ones publicly. So just wondering if there's maybe a more recent backlog number that you guys can share, or maybe we need to wait another month or so for the next earnings release.

Question: Jeff Grampp - Alliance Global Partners - Analyst : Fair enough. I appreciate that. And with respect to that, contracted order KPI that you guys put out there, what do you guys view as kind of the biggest risks to achieving that, whether those are external things that are perhaps out of your control related to customer decision timelines, things of that nature versus things that you guys are focused on internally? Like, what keeps you guys up at night with respect to meeting that KPI that's not out there?

Question: Jeff Grampp - Alliance Global Partners - Analyst : Great. That's helpful. And if I could just sneak one more in. OpEx trended down nicely for -- to wrap up the fiscal year. You guys mentioned in the prepared remarks continuing to evaluate some ways to perhaps improve that. So is it fair to think that relative to that Q4 run rate that there's still some potential for OpEx improvement as we look into fiscal '25? Or how should we think about the overall expense profile of the business moving forward?

Question: Shawn Severson - Water Tower Research LLC - Analyst : Great. Thanks. Good morning, gentlemen. Philipp, you've talked a little bit about the commercial inflection point having hit, and we've seen a lot of that showing up in the results and the items you discussed. But what I'm trying to get at is understanding, was this just related to the time in the market and the commercialization of the product? Or was it related to greater sales effort? Or are there certain things you can point to that really seem to have pushed the commercialization inflection point through quickly here? And I'd say, like the last six months, it's really been noticeable.

Question: Shawn Severson - Water Tower Research LLC - Analyst : And kind of a follow on to that. You've mentioned shorter sales cycle with existing customers, which makes sense, right? They're familiar with it, and we would expect that. Are you seeing a shortening of the sales cycle with new customers as well? So I guess, always the concern is anything government-related or project-related like this, the sales cycles are very long and tenuous in some cases. But what are you seeing with nonrecurring customers but new customers as it relates to that?

Question: Shawn Severson - Water Tower Research LLC - Analyst : Thanks for that. My last question is related to any political risk. I know it's such an emerging market, there probably isn't a lot, but we do have questions sometimes. Is there any difference to you what happens in November as far as rollouts for commercialization?

Question: Peter Ruggiere - Dawson James Securities - Analyst : You guys have growth; it sounds very great. I have a lot of questions, actually. Just a question on the oil and gas part of it. It was a contract where some of you're working on several years back in the Gulf of Mexico with oil and gas decommissioning, are you guys still working towards that?

Question: Peter Ruggiere - Dawson James Securities - Analyst : Okay. Because we're working with Premier Oil for a long time in the Adriatic Sea, that was for a while. Are you still -- is that buoy still empowering that research facility in Chile?

Question: Peter Ruggiere - Dawson James Securities - Analyst : Okay. I heard you say that your -- the buoy has more power now than it did before, or producing more power. Is that correct? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 26, 2024 / 1:00PM, OPTT.A - Q4 2024 Ocean Power Technologies Inc Earnings Call

Question: Peter Ruggiere - Dawson James Securities - Analyst : Okay. How many buoys do you have in the water right now, by any chance?

Question: Peter Ruggiere - Dawson James Securities - Analyst : Okay. What do you see the biggest market because the WAM is sort of really interesting with the drones and stuff like that. Is that going to be the biggest market? Or is it the oil and gas possibly or the illegal fishing -- I know you did a big study in Japan, and your stuff going in, I guess, in the Philippines a couple of years back. And then the COVID thing happened and everything kind of got delayed, I believe, that's correct.

Question: Peter Ruggiere - Dawson James Securities - Analyst : Okay. On your -- like a couple of questions on the backlog, I understand, but the pipeline you have on April 30, is it $71 million. And in the quarter before, it was $77 million, at the end of the third. Are you -- the size has went down a little bit. Is that because you're converting it into actually revenue at this point? And what does that pipeline consist of? My question on that.

Question: Peter Ruggiere - Dawson James Securities - Analyst : Okay. And your margins are about -- gross margin of 50%, correct? Around there?

Question: Peter Ruggiere - Dawson James Securities - Analyst : It used to be a lot lower, I believe.

Question: Peter Ruggiere - Dawson James Securities - Analyst : Right. And it might be the last question, but the contract orders that you put on the '25 guidance, $12.5 million. Does that include everything? Or you -- is that just a low number of certain -- could you do $50 million, $100 million in revenues. $12.5 million, that's not the number for the entire year. Is it for total revenue?

Question: Peter Ruggiere - Dawson James Securities - Analyst : Okay. All right. Well, thank you very much.