Coda Octopus Group, Inc.

Greetings and welcome to the Coda Octopus third quarter 2026 earnings conference call. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation and you may be placed into question queue at any time by pressing star 1 on your telephone keypad. As a reminder, this conference is being recorded. If anyone should require operator assistance, please press star 0 on your telephone keypad. It's now my pleasure to turn the call over to Dillon King, Investor Relations. Dillon, please go ahead.

Thank you, Operator. Good morning, everyone, and welcome to Code Octopus's third quarter fiscal 2026 earnings conference call. Before management begins their formal remarks, we would like to remind everyone that some statements made today may be considered forward-looking statements under U.S. securities laws. These statements are subject to 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 relating 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 year ended October 31, 2025 and Form 10-Q for the first, second and third quarters of our fiscal year 2026. You may get Coda Octopus's 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 through the Investor Relations section of Coda Octopus's website. Finally, as a reminder, this is our third quarter fiscal 2026 reporting. In all comparisons, unless explicitly stated otherwise, I'm with our third quarter fiscal 2025. With that, I will now turn the call over to the company's chair and CEO, Annmarie Gayle. Annmarie?

Thanks, Dillon, and good morning, everyone. Thank you for joining us for our third quarter fiscal 2026 earnings call. I believe we delivered a solid set of results during the quarter with consolidated revenue increasing 9.2% and pre-tax income increasing 16%. While geopolitical instability in the Middle East adversely affected customer activity in certain international markets and resulted in lower revenue within our marine technology business, the strength of our defense engineering services and acoustic sensors and material businesses enabled us to deliver growth in both revenue and Pre-tax Income. Our performance this quarter highlights the resilience of our diversified business model and the strength of our financial fundamentals. I am pleased with how the business has continued to perform despite challenging market conditions in some regions. Our company comprises three operating businesses, marine technology, defense engineering services, and acoustic sensors and materials. Our marine technology business remains the strategic centerpiece of the company and generated 43.8% of consolidated revenue during the quarter. Our long-term growth strategy remains focused on expanding adoption of our proprietary underwater technologies, including Ecoscope, David, and the recently introduced Nano Series, particularly within defense and autonomous underwater vehicle applications, where we continue to see significant long-term opportunities. Turning to our third quarter business highlights, marine technology business. Revenue in our marine technology business decreased 15.2% during the quarter. The decline primarily reflected reduced customer activity in the Middle East and parts of Asia following geopolitical instability in the region. Hardware revenue decreased 17.8% to $2.3 million compared to $2.7 million in the prior year period. Partially offsetting this decline was significantly improved rental asset utilization with increased rental revenue by 131.1% to approximately 0.7 million compared with approximately 0.3 million in the prior year period. The higher contributions from rentals together with lower commission costs resulting from changes in sales geography contributed positively to gross margins within this business. Turning to defense engineering services business. Our defense engineering services business delivered a strong quarter with revenue increasing 68.3% compared with the prior year period. The business benefited from increased activity and funding across several long-standing defense programs resulting in both higher order intake and higher execution levels during the quarter. Our UK defense operations experienced increased customer activity and contributed higher revenues compared with the prior year period. Within our US defense engineering business, we continue to see strengthening demand for repairs and spares under some of the sustainment defense programs that we have supported for decades. During the quarter, one of our prime contractor customers was awarded a multi-year repair and sustainment contract by the U.S. government. Following that award, we experienced increased repair-related activity and additional subcontract opportunities associated with the program. We continue to see encouraging demand trends in this area. Demand for SPARE supporting the Sustainment Defence System also remains strong, with SPARE's orders exceeding 2.4 million year-to-date. We also continue to make progress in electronic warfare, which remains an important area of defence investment. Our U.S. Defense Engineering Services segment is currently supporting several prime contractors in the development of rugged, deployable RF electronic warfare systems for a range of platforms, including unmanned systems, helicopters, airborne pods, and ground vehicles. We believe these programs represent a meaningful future opportunity enabling us to build upon our long-standing positions on legacy defense systems while expanding into next-generation defense programs as technologies and operational requirements continue to evolve. Turning to our acoustic sensors and materials business, Our acoustic sensors and material business increased revenue by 10.4% during the quarter. While gross margins were lower due to product mix, we continue to see encouraging demand for our acoustic materials and acoustic test tank solutions across international markets. While market conditions in certain international regions remain challenging, our diversified business model enabled us to deliver growth in both revenue and pre-tax income during the quarter. We remain focused on executing our long-term growth strategy, strengthening our position across defense, marine, and acoustic markets, and expanding adoption of our proprietary technologies. With that, I will hand the call over to Blair Cunningham, our President of Technology, who will provide an update on our technology initiatives, recent milestones and market activities.