Coda Octopus Group, Inc.

Good morning. Welcome to Coda Octopus Group's first quarter fiscal 2025 earnings conference call. My name is Sherry and I will be your operator today. Before this call, Coda Octopus issued its financial results for the first quarter ended January 31st, 2025, including a press release, a copy of which will be furnished in a report filed with the SEC and will be available in the investor relations section of the company's website. Joining us on today's call from Coda Octopus are its chair and CEO, Anne-Marie Gale, its interim CFO, Gail Jardine, and its president of technology, Blair Cunningham. Following their remarks, we will be open the call for questions. Before we begin, Jeff Turner from our investor relations team will make a brief introductory statement. Jeff, please proceed.

Thank you, Operator. Good morning, everyone, and welcome to CoderOctopus first quarter fiscal 2025 earnings conference call. Before management begins their formal remarks, we would like to remind everyone that some statements we're making today may be considered forward-looking statements under securities law and involve a number of risks and uncertainties. As a result, we caution you that there are a number of factors, many of which are beyond our control. which could cause actual results and events to differ materially from those described in the forward-looking statements. For more detailed risks, uncertainties and assumptions related to our forward-looking statements, please see the disclosures in our earnings release and public filings made with the Securities and Exchange Commission. We disclaim any obligation or undertaking to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made, except as may be required by law. We refer you to our filings with the Securities and Exchange Commission for detailed disclosures and descriptions of our business, as well as uncertainties and other variable circumstances including but not limited to risks and uncertainties identified in our Form 10-K for the year ended October 31, 2024, and Forms 10-Q for the first quarter of our fiscal 2025 year. You may get Coder Octopus Securities and Exchange Commission filings free by visiting the SEC website at www.sec.gov. I would also like to remind everyone that this call is being recorded and will be made available for replay via a link in the investor relations section of the CoderOctopus website. Now, I will turn the call over to the company's chair and CEO, Anne-Marie Gale. Anne-Marie?

Thanks, Jeff, and good morning, everyone. Thank you for joining us for our first quarter fiscal year 2025 earnings call. Despite the challenging global policy environment, our revenue in the first quarter 2025 increased by 16.8%, and I believe that we've delivered a solid set of results, including increasing our operating income, net income, and earnings per share. I would like to now provide some of the key highlights relating to our financial results for the first quarter fiscal 2025. For those who are new to the CODA Oxford story, our business is made up of three discrete business operations, the marine technology business, the engineering businesses, and our recently added acoustic sensors and material business units now turning to highlights relating to the marine technology business this business sells its products and solutions worldwide in the first quarter we were confronted with significant headwinds internationally which we believe is related to the uncertainty around the policies of the new U.S. administration as it moves to rebalance its trade relations through the application of tariffs and rethink major policies such as energy transition and more broadly geopolitical alignment and its foreign policy. As part of this, the new administration has suspended offshore renewable permits, and many leading US developers such as Shell, Orsted, BP, and Total Energy have either reduced or halted their US offshore renewables programs. We believe that these factors have resulted in a weak demand for our solutions across all sectors, which caused a decrease in revenue from our marine technology business. Notwithstanding the change in the US policy on renewables, its new policy on prioritizing domestic energy production of oil and gas also favors our products and solutions. And we believe that this new policy will in the foreseeable future offset any reduction of revenue from US offshore renewables. Furthermore, a key part of our strategy as a group relies on defense spending. Although the policy of the new US administration is to reduce defense spending by 8% over a number of years, its foreign policy on defense has also seen Europe, including United Kingdom, committing to significantly increase spending on defense. For example, Germany is expecting to spend about $428 billion on defense over the coming years, in addition to creating a special fund of $535 billion for infrastructure spending over the next 10 years. The leaders of the European Union member states have also agreed to allow the member states to exceed the debt ceilings that are in place to allow these countries to borrow for defense investment. We therefore believe that despite the short-term disruption caused by uncertainty, around critical policies relating to trade, defense spending, and foreign policy, we believe that these changes will favor our business in the medium to long term. Now turning to highlights relating to the engineering business. In the first quarter, our engineering business revenue increased by 77%. This business unit is reliant on receiving funding on the defense programs and therefore it is likely to experience delays in receiving orders until there is more clarity on the new US administration's spending priorities. Now turning to highlights relating to the newly acquired business unit, Precision Acoustics Limited. In the first quarter, This newly added business unit contributed 25.2% to our consolidated revenue and 33.3% to our operating income. As we navigate the broader headwinds relating to the global policy environment, this new business, which is less reliant on defense spending, has added to our diversification and resilience of our revenue structure. Despite these broader headwinds, we continue to make it our priority to focus on sowing the seeds to grow our business. And in the first quarter of 2025, we continue to make progress around our growth pillars, Ecoscope and David. Blair Cunningham, our president of technology, who is the market maker for our technologies, will today be providing a broad overview of some of our activities under these programs during our first quarter. Blair will also be available to answer any questions you may have on our technologies, so please use the opportunity to raise such questions during the Q&A session if you have any. I will now turn the call over to Blair Cunningham, where he will give a short overview of our core technologies around which we are postulating our growth agenda.