Coda Octopus net income surges despite minor revenue dip

• Net income leaped 86.8% to $1.7 million, significantly outpacing the prior-year quarter.
• Total revenue ticked down slightly by 1.6% to $6.9 million due to geopolitical delays in the Middle East and Asia.
• The company's bottom-line growth was propelled by a strong gross margin and a 21.4% drop in SG&A expenses.

Coda Octopus Group (NASDAQ:CODA) reported its fiscal second-quarter 2026 financial results for the period ended April 30, 2026.

While total revenue experienced a minor year-over-year pullback to approximately $6.9 million, the company delivered explosive net income growth of 86.8%, reaching $1.7 million.

The earnings per share of $0.15 surpassed the Wall Street consensus estimate of $0.13.

Management pointed to robust operating efficiencies, including a 21.4% reduction in selling, general, and administrative (SG&A) expenses, which helped expand the operating margin to 26% and fuel a pre-tax margin of 30.9%.

Operationally, the revenue mix shifted heavily toward defense and acoustics.

The company’s core Marine Technology segment was temporarily weighed down by regional tension involving Iran, causing customers in the Middle East and Asia to pause offshore projects.

Conversely, both Defense Engineering and Acoustics recorded strong double-digit growth.

Meanwhile, the balance sheet strengthened further, with cash reserves ticking up to $30.6 million.

On the operational front, long-term catalysts advanced significantly.

The U.S. Navy granted approval for the untethered Diver Augmented Vision Display (DAVD) system for fleet deployment, and the company secured its initial orders for the newly launched Echoscope PIPE NANO GEN SERIES sonars.

Following the pre-market earnings announcement, CODA shares jumped nearly 9% in early trading.