Overview

• Imaging sonar tech firm's Q2 revenue fell 1.6% yr/yr

• Diluted EPS rose to $0.15 from $0.08 yr/yr

• Company's core Marine Technology Business revenue declined due to Middle East and Asia instability

Outlook

• Company expects DAVD procurement activity to be weighted toward second half of fiscal 2026

• Coda Octopus focusing on expanding DAVD adoption in Europe following U.S. Navy approval

• Company sees growth opportunities in defense and underwater robotics markets with NANO GEN Series

Result Drivers

• MIDDLE EAST AND ASIA INSTABILITY - Co said conflict involving Iran and resulting instability in key markets led to reduced demand in its core Marine Technology Business

• DEFENSE ENGINEERING GROWTH - Revenue from Defense Engineering Services Business rose 37.9% yr/yr, offsetting some weakness in core markets

• LOWER SG&A EXPENSES - 21.4% decrease in selling, general & administrative expenses supported higher operating margin

Company press release: ID:nGNXcxYR1

Key Details

Metric	Beat/Miss	Actual	Consensus Estimate
Q2 Revenue	Miss	$6.9 mln	$7.31 mln (2 Analysts)
Q2 EPS		$0.15
Q2 Net Income		$1.7 mln
Q2 Gross Profit		$4.6 mln
Q2 Operating Margin		26.00%
Q2 Pretax Profit		$2.1 mln

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 1 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the electronic equipment & parts peer group is "buy"

• Wall Street's median 12-month price target for Coda Octopus Group Inc is $13.65, about 25% above its June 12 closing price of $10.92

• The stock recently traded at 18 times the next 12-month earnings vs. a P/E of 24 three months ago

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