Industry: Scientific & Technical Instruments — specializing in subsea sonars and marine imaging technologies

About Company:

Coda Octopus designs and sells proprietary real‑time 3D/4D/5D/6D underwater imaging sonar systems, alongside diving technology (DAVD) and subsea engineering services. Its key customers include offshore oil/gas firms, renewable energy companies, ports, defense contractors, and marine researchers. It also provides engineering and custom sub‑assemblies for mission-critical defense programs in the U.S. and UK

Company History:

• Founded in 1994, originally as Coda Technologies, based in Orlando, FL
• Over 30 years, became a global leader in subsea sonar.
• Opened operations across Orlando, Edinburgh, Copenhagen, Salt Lake City (Colmek), and Portland UK (Martech)
• Recently received UKAS ISO:17025 accreditation for its ultrasonic calibration services (Aug 6, 2025)
• Q2 2025 earnings released June 16 2025: revenue rose 31.8% YoY, EPS of $0.08 (slightly below forecasts), strong investor response with ~12.6% pre-market stock surge

Company Advantage Over Competitors:

1. Unique real-time imaging: Offers the only commercial real-time 3D/4D/5D/6D sonar system (Echoscope®, Echoscope PIPE®) capable of visualizing moving underwater objects even in zero visibility—positioning itself as a market innovator
2. Diver Augmented Vision Display (DAVD): Real-time HUD for divers connecting sensor, sonar, and media data—used by both commercial and defense sectors
3. Long-term defense partnerships: Two engineering subsidiaries (Colmek and Martech) supply proprietary components for defense programs—some active for decades—providing recurring revenue and credibility

Risk Factors to Consider:

• Revenue concentration: Heavy reliance on defense contracts and hardware sales in subsea/renewable sectors; any slowdown may impact growth
• Gross margin variability: Margins dipped in Q2 due to sales commissions, especially in Asian markets; hardware rentals were underutilized, negatively impacting margins
• Competition: Faces pressure from larger subsea technology firms and smaller specialized providers; must continuously innovate to maintain edge
• Valuation risk: P/E sits around 26–27×, above many peers; strong growth expectations are baked in and any slowdown may expose downside risk

What Makes This Company Special or a Good Investment?

• One-of-a-kind technology leadership: Its patented Echoscope series remains the only real-time volumetric sonar in its class.
• Clean financials with solid cash flow: As of Q2, the company holds no debt, maintains strong operating cash flow, and InvestingPro rates its financial health as “GOOD” (score 2.78)
• High-growth market alignment: Demand driven by offshore wind installation, port security, dredging, defense modernization, and marine research
• Execution momentum: Recent delivery contract of 16 DAVD systems to a foreign navy for Q3, and ISO certification, highlight operational maturity and global traction