Coda Octopus reports slightly lower revenue, but stronger margins and lower expenses lift net income.
Stock Earnings Results
June 15, 2026
Table of Contents
June 15, 2026
Coda Octopus Group, Inc. (NASDAQ: CODA) reported fiscal second-quarter 2026 results with slightly lower revenue, but stronger margins, lower expenses, and sharply higher net income.
Coda Octopus is a marine technology and defense company focused on real-time 4D, 5D, and 6D imaging sonar, subsea intelligence systems, diving augmented reality technology, and defense engineering services.
Total revenue declined 1.6% to $6.9 million from $7.0 million in the prior-year quarter.
The decline was mainly tied to Coda’s core Marine Technology Business, where revenue fell 26.8% to $2.8 million. Management said this segment remains affected by instability across key Middle East and Asia markets due to the ongoing conflict involving Iran, which has delayed offshore projects.
Other segments helped offset that weakness. Defense Engineering Services revenue increased 37.9% to $2.5 million, while Acoustics Sensors and Material revenue rose 17.5% to $1.5 million.
Gross profit increased to $4.6 million from $4.5 million, while gross margin improved to 66.3% from 64.1%.
Operating income increased 64.8% to $1.8 million, and operating margin expanded to 26.0% from 15.5%. Net income rose 86.8% to $1.7 million, while diluted EPS increased to $0.15 from $0.08.
SG&A declined 21.4% to $2.1 million, helping drive the improvement in profitability.
Coda highlighted a major milestone for its Diver Augmented Vision Display technology. The company said its untethered DAVD system has now been formally approved by the U.S. Navy following completion of the Approved Navy Use assessment.
That approval means the system is available for acquisition by any command, and the 20 previously delivered untethered DAVD units can now be deployed in ongoing operations.
Management said procurement activity is expected to be weighted toward the second half of fiscal 2026 because the assessment was completed in June.
Coda also pointed to growing interest in its Echoscope PIPE NANO GEN SERIES sonar systems. The company received an initial order for a small number of NANO Gen Series sonars for integration into an established vehicle program. If evaluations are successful, management believes the opportunity could scale.
Coda ended the quarter with $30.6 million in cash, up from $28.7 million at the end of fiscal 2025.
That cash position gives the company flexibility as it pursues defense, naval diving, underwater robotics, and subsea vehicle opportunities.
Coda Octopus delivered a stronger profit story even as its core marine technology revenue remained under pressure.
The quarter showed the benefit of business diversification, cost control, and higher-margin execution. The U.S. Navy approval for DAVD could become an important catalyst if it leads to broader military adoption, while the NANO Gen Series gives the company another route into underwater robotics and defense markets.
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