Ocean Power at MicroCap Rodeo: Strategic Shift to Ocean Intelligence

On Thursday, 25 September 2025, Ocean Power Technologies (NYSE:OPTT) presented at the MicroCap Rodeo Fall Conference, unveiling its strategic transition from buoy technology to a comprehensive provider of ocean intelligence platforms. CEO Philip Stratman highlighted the company’s focus on autonomous systems, cost-effective solutions, and a growing market presence, while addressing challenges in a competitive landscape.

Key Takeaways

• Ocean Power Technologies has shifted from buoy technology to a comprehensive ocean intelligence platform.
• The company reduced overhead by 40% in the past 18 months, focusing on strategic market approaches.
• Revenue model includes direct sales, recurring revenue from maintenance, and rental options for unmanned surface vehicles.
• A growing backlog of $15 million and a pipeline of $130 million indicate strong market traction.
• OPT’s technology is commercially available and deployed, setting it apart from competitors.

Financial Results

• Last year, Ocean Power Technologies reported revenues just under $6 million.
• The company’s backlog is approximately $15 million, with a pipeline of qualified opportunities exceeding $130 million.
• The revenue model is diversified, including sales, maintenance, and rental services for USVs.

Operational Updates

• OPT has transitioned to a provider of platforms for ocean intelligence, integrating autonomous vehicles.
• The company has achieved a 40% reduction in overhead by focusing on strategic market approaches.
• OPT’s technology includes self-recharging buoys and USVs, used in defense, security, and critical energy infrastructure.

Future Outlook

• The company’s focus on autonomous systems positions it well in the burgeoning defense tech market.
• OPT’s growing backlog and pipeline suggest strong future growth prospects.
• The integration of AI-capable software, MEROS, is expected to enhance the capabilities of OPT’s platforms.

Q&A Highlights

• CEO Philip Stratman emphasized the company’s cost-effectiveness and competitive edge in the market.
• The company distinguishes itself with commercially available and deployed technology, unlike competitors relying on theoretical models.
• OPT’s USVs, described as the "pickup truck" of the industry, offer high payload capacity and versatility.

Ocean Power Technologies’ strategic shift and operational efficiencies position it as a promising player in the ocean intelligence market. For a deeper dive into the company’s strategies and future plans, please refer to the full transcript below.

Full transcript - MicroCap Rodeo Fall Conference:

Sean Severson, CEO and founder, Watertow Research: Alright, everybody. Thank you. I’ll kick off the next the next presenter in fireside chat. My name is Sean Severson, CEO and founder of Watertow Research, and we have Ocean Power Technologies here, OPT, trade sticker, OPTT. And we have Philip Stratman, CEO.

And I guess we could start, Philip. Why you tell us a little bit about your background and how what brought you to the company? And I also wanted to put in front of investors that, you know, I’ve known the company for a long time. It’s gone through some tremendous transitions over the years. So I think for the benefit of anybody who maybe knew the old OPT, I think talk about the the transition of the business first and what brought you there, and then what you’ve done since you’ve gotten there.

That’s a five question

Philip Stratman, CEO, Ocean Power Technologies (OPT): for I’ll try to unravel it while I go along. So So OPT nowadays provider of platforms for ocean intelligence gathering. The easiest way to put it. Yeah. We provide persistent resident and autonomous systems that can be out there for short periods or exceptionally long periods of time to get you whatever you need to know from seabed all the way to the surface and then into the sky.

That obviously has obvious use cases when it comes to defense and security, obvious use case when it comes to critical energy infrastructure, oil and gas, pipeline monitoring, and so on and so forth. So the way we got there let’s go. Come to the next bit. So my my background is I’m a ex military naval architect, worked in defense shipbuilding, moved into oil and gas, and then was appointed CEO at OPT, I wanna say, about just over four years ago. OPT back then really had the buoy technology.

We looked at what OPT had, where the use cases were in the market, and what you could do with it. So we bolted on the autonomous vehicles. So we’ve got the USBs that we provide. We looked at what could we do with the buoys, and the buoys really lent themselves to being persistent nodes, so to speak, that you put out there in the ocean. You know?

Once you get more than 15 miles away from the shore, radar doesn’t reach that far from the shore, Cameras don’t see that far, and you’re relying on either, you know, hundreds of thousands of dollars of manned assets or satellites that give you very spotty ideas of what’s going on. You know, we all know what goes on. We know we know anecdotally what goes on in the ocean, but we have to know where it is so we can solve the find and fix problem so that you can then utilize your manned assets to do and keep your oil and gas platform secure, to provide the energy we all need, to stop drugs being smuggled into into countries. That’s the that’s the position we took. We retaught the management team.

At OPT, overall, we’re just under somewhere between 2030% veterans across the board. The company has a facility clearance at secret level so that we can work on classified projects, and it’s been a complete about change. The other change that we did over the last eighteen months, we took and Bob can correct me if I get the number wrong, but it’s around 40% of overhead that we took out of the business by retooling ourselves and focusing on how we go to market. I hope I addressed all five of questions. That kinda leads into

Sean Severson, CEO and founder, Watertow Research: the next one, but let’s talk about the customers. Let’s talk about the application. So, you know, obviously, you have DOD. You have you know, I’ll let you, but you talk about it. But, I mean, if you look at how it’s being used today and deployed, I think people, know, understand you have their initial the Buoy technology.

You found ways to use it and and really build markets out of it. But give some examples of how it’s being used today, what’s, what’s being used. Yeah. I think

Philip Stratman, CEO, Ocean Power Technologies (OPT): to give some concrete examples, think that’s another one that distinguishes OPT from some of this competition. We have commercially available and commercially deployed technology that we can provide today. These aren’t paper exercises. K? One example is we have a buoy out for the naval postgraduate school right now off California in Monterey Bay that’s got an AT and T five g mast on it.

So that is to do for the navy to do testing on five g at sea secure mesh networks to enable underwater surface and aerial drones to all communicate wherever that communication needs to happen, because we can’t rely on cloud infrastructure if you’re in somewhere like in weapons weapons engagement zone. And we have a buoy currently in The Middle East. It’s in Abu Dhabi. That’s equipped with surface surveillance sensors. That’s designed for rapidly deployable intelligence surveillance and reconnaissance and soft protection of assets.

On the vehicle side, we have several vehicles right now working with one of our customers in Taiwan where they’re doing unexploded ordnance detection. They’re looking for old mines from World War two in an area where there’s a big offshore energy infrastructure being built out. Nobody knows exactly where all these mines are, but you don’t really wanna drive a pile into one of them. So you kind of you can use autonomous vehicles to find them first. We just finished a deployment in the Baltic Sea as part of a US delegation to NATO for task force x where we utilized our systems to work on, you know, GPS jamming detection, detection, looking at seabed warfare.

You know, we’ve all seen the news about what happens with Internet cables and so on before. So it’s it is a an over overlay of really knowing using our systems to know what’s going on out in the ocean and communicate that back to whoever the customer is to help them then deploy their systems and bigger man systems to do the interdiction, interrogation, and, you know, if need be, you

Sean Severson, CEO and founder, Watertow Research: know, whatever they need to do Well, then to clarify, so so you have the buoy, right, which is the power source, but talk a little bit about the autonomous vehicles, you know, what is the the use of instrumentation, for example, on the buoys, how the what the power buoy is used for, and then, you know, like, WAMV product.

Philip Stratman, CEO, Ocean Power Technologies (OPT): Yeah. So if you look at the buoy itself, it’s it’s a self recharging steel column. That’s probably the best way to put it. That you put out wherever you need it to be in the ocean. It uses solar, wind, and depending on where you are, a combination of wave power to constantly recharge its battery.

And that gives us the ability to fuel a whole range of sensors. You know, in the standard configuration, it’s a communications node, which means short range radio, long range radio, Starlink, Silver’s point to point, which is a encrypted military standard. And then we have cameras, electronic signature detection, and radar systems on there. That’s kind of the base version. And what it does, it constantly triangulates the electronic signal that a shipper sends and compares that to the radar return to look at whether somebody’s pretending to be something that they’re not.

It’s really for what in the maritime industry is known as dark vessel detection. The vessels that are moving around and aren’t sending a signal, but you can see it on the radar, or vessels that are pretending to be something totally entirely different. Generally, both are really good indicators that you may wanna go and further interrogate what’s going on. You know, I spoke about the, you know, the mask that we can the five g mask we’ve got on in California. Other use cases and work that we’ve done in the past is you can put a power cable down to the seabed, and you can power a whole bunch of seabed sensors.

You know, that could be hydrophones. It could be active sonar. So you can use that for anti submarine warfare, so figuring out whether something underwater is coming into an area that you are concerned about. You know, if you take New York as a specific example, you know, we got FIFA 2026 coming up, and nobody’s gonna go and close down the Verrazano Strait just because there’s a soccer game going on. But you kind of wanna know that there’s nothing coming in underwater like small robots.

So, you know, part of the use cases that we demonstrated, we did a demonstration from the Navy, I wanna say it was earlier this year in San Diego, where we used one of our vehicles with a towed sonar array behind it to detect micro underwater robots that they deployed out in San Diego in the port there to spot any threats that might be coming in. So that same threat detection, you can use in a civilian application. We’ve got oil and gas customers that are using it to survey their pipeline because you can use a vehicle for a couple of thousand dollars a day. The alternative is to use a boat that’s gonna cost you at least 30 to $40,000 a day. They really like the fact that these are autonomous systems forward deployed, and you you can do what you can do with a larger asset, but at a fraction of the OpEx.

Sean Severson, CEO and founder, Watertow Research: I think that’s an interesting point because it really you know, I know we talked about this before, but it doesn’t require adding to budget. So when people look at, you know, defense budgets or programs or projects, this effectively is replacing much higher expenses in inside the current use cases and the current budget. Right? So you don’t have to send a ship out. Don’t have send a warfighter out or anything.

So this is this becomes a good ROI spend if you wanna look at it that way for both civilian and defense application. Yeah. If you’re looking at a metric like dollars per square nautical mile per hour surveyed,

Philip Stratman, CEO, Ocean Power Technologies (OPT): you know, it it is a complete game changer. I think, you know, one of our last investor decks, we’ve compared, you know, cost per day to have a buoy out versus cost per day to have a coast guard cutter going out, cost per day to deploy a helicopter to then inter you know, see something. And then at the very bottom of the list, you know, everybody’s saying, well, we’ve got a navy with loads of assets. And I like, well, cost per day to put a DDG out there is about a $150,000 a day, and that’s after you paid for the thing. So just in terms of fuel cost and manpower on those things, if you wanna go and use those highly valuable and definitely required assets in the best manner, you wanna solve the find and fix problem with other assets that can be out there at a very low cost point for long periods of time.

Sean Severson, CEO and founder, Watertow Research: And and I guess if you look at the, you know, the the business opportunity, let’s talk a little bit about the numbers. Right? How does this translate into a revenue model? And, actually, before we get to that, you you know, we touched on it a bit. What what is the WAMV?

If you talk about that for Yeah.

Philip Stratman, CEO, Ocean Power Technologies (OPT): So the the WAMV is sort of the USVs unmanned surface vehicles, essentially drone boats. That’s probably the best way to do it. They’re autonomously, remotely autonomously driven or remotely controlled boats. We distinguish ourselves in the news all the time. Like, the Ukrainians have used them very successfully to take down Russian assets.

Where we distinguish ourselves, we’re really we’re the pickup truck of that world. We don’t have the fastest, the meanest, the darkest painted one. You know? We don’t have the biggest weapons on it, but we can carry huge amounts of payload. Our larger one carries, you know, at least 600 pounds of payload.

It’s independently moving hulls, so you have, like, a super stable payload tray at the top. And that enabled us earlier this year at a at an exhibition in Washington, DC. We integrated some of Redcat’s drones. We built a landing platform over the top of ours so you can go out there with one of our vehicles and then launch an aerial drone. So it becomes that force multiplier of being the workhorse of that type of industry.

And we’re the smaller scale of that size, which makes them easily deployable, makes them easily movable, and that’s sort of also garnering the attraction we’re seeing and the uptick we’re seeing in The Middle East, for example.

Sean Severson, CEO and founder, Watertow Research: And then just the economics on this. How does this translate into revenue model for the company?

Philip Stratman, CEO, Ocean Power Technologies (OPT): So if you look at the vehicles, I mean, obviously, somebody can purchase the vehicle. If they’re purchasing a vehicle, you know, we make gross margin on on us making it, providing it. We then generate additional revenues on a train trainer program. Do maintenance on it, upgrades, updates, obviously, all the software that goes with it as well. There’s, you know, there’s there’s, you know, life cycle upgrades that that will occur.

But a lot of our customers don’t wanna buy these. They don’t need it for five years. What they’re looking at is, hey. I’ve got this job I need to do. You’re talking about

Sean Severson, CEO and founder, Watertow Research: the buoys or the Wambi?

Philip Stratman, CEO, Ocean Power Technologies (OPT): This is the Wambi. Wambi. So on the Wambi, you know, you got customers going, yeah. I want this for three months or for six months. If you’re doing that, we’ll charge a day rate.

We’ll provide the operators. Unlike any good offshore asset, if you’re looking at, you know, met comparable metrics like oceaneering or other people that provide marine assets in that industry, after somewhere between 203 days of utilization, cash and cash payback on one of these assets, yeah, is achieved, but they have a useful economic life that way exceeds five years. So you start seeing that free cash flow generation flywheel kicking in after a certain period of time as you build up the fleet. On the buoy side, it’s slightly different. You know?

People generally want the buoy because they need to monitor something for two years, three years, five years. They’ve got an oil and gas field. They’ve got a border, whatever that might be. And we would sell them the buoy. We’ll and that’s the you know, we make that uplift there, then we’ll chart we’ll provide, you know, we’ll provide monitoring service.

We provide value add services by integrating the app the edge software with their shore based operation center. You know? We’ll maintain that for them. We’ll do the maintenance and upgrades and updates on the buoy. We’ll work with them to get the system installed.

And, you know, sometimes people are saying, hey. I only want it for two years. That’s fine. We’ll charge you for the two years. We’ll take it back.

We would then upgrade it, and it then goes back into our fleet. And if you’re looking at the buoys, you know, they’re ten plus years lifetime. You know? Again, you look at that free cash flow flywheel that starts kicking in once you have sufficient numbers out there, That’s where the value add kicks in. And then the third bit is what we’re starting to layering in right now.

And it’s you know, we’ve called it MEROS, which is this kind of integrating overarching, you know, AI capable software system that combines buoy with our USB and allows you to put in additional sensors. So now you could have a scenario where you have, k, half a dozen buoys out in the ocean. Some of them may in the future have docking stations attached to it. Think about it like a Tesla supercharger for the ocean. Then you put USBs out there, ideally our USBs.

They’re they’re sitting there waiting for something to happen. One buoy finds a threat. That buoy alerts the nearest buoy to that threat that the software tasks the vehicle that’s attached to it to go out there, look at the thread, and then provide that intelligent you know, that actionable intelligence back to an operator to then go and act on it. You know, what that enables us to do is to then play nicely in the sandbox with all the other people out there because you’re gonna need a whole range of USB. This whole topic of collaborative autonomy is really starting to come to the fore.

But I set this on a panel earlier this year. I was supposed to buy, you know, the the venture capital community over at the Brooklyn Navy Yards. All of these USVs all need consulates, and that’s where the buoys kick in. It’s all grain, and everybody’s saying, yeah. I’ve got this.

I’m like, yeah. But first thing that’s gonna go off is your cloud based Internet provision if you’re actually finding yourself in a fight with somebody. So what you need is local secure mesh networks for all of these systems to communicate. And I think that’s the differentiator we bring into industry with the buoys as opposed to being just roaming. Any questions, audience?

Sean Severson, CEO and founder, Watertow Research: I have I have one more to to take I mean, if you look at it’s an interesting topic, but private companies out there. And, you know, I know we’ve discussed this a little bit about some of the valuations that are happening speaking to VCs. Okay? So when you look at some of the private rounds that have been done on, I call them competitors, but similar companies, some cases competitors, what’s your take on that? You know, the numbers are pretty staggering when you look at it, and, you know, this is obviously of interest to investors.

When you’re looking at private company transactions and valuations versus OPT, there’s quite the discrepancy here. Yeah. I’d say it’s it’s been an interesting development. So you you asked me at

Philip Stratman, CEO, Ocean Power Technologies (OPT): the beginning. You know, we pivoted into this defense tech world because a lot of us come from it years ago. In the last eighteen months or so, it is it is like a brand new industry. When we were pivoting, yeah, when we were pivoting with us and maybe one or two, know, Undero was really starting to scale up with Palantir, but they’re really on the pure software side. In the last eighteen months, you know, we’ve had, like, 10 plus new competitors or entrants into our space.

Oftentimes, they’re not really direct competitors because, you know, they’re not they they a lot of them are more on the more faster, more lethal side, you know, not on the pickup side of the industry. But you look at how they’re being valued, it is a completely different metric. K? We have to do quarterly earnings calls. And we have to disclose our revenue.

We disclose our backlog. We disclose our pipeline. My competitors will send a 10 page pitch deck to their investors going, I have this TAM, and that will be my SAM. And before you know it, they’re going out and saying, great. We just raised another 200,000,000 at an 800,000,000 post money valuation.

And I sit

Sean Severson, CEO and founder, Watertow Research: there again. You don’t you don’t even have

Philip Stratman, CEO, Ocean Power Technologies (OPT): a product in the water yet. Right. It’s I mean, it’s great because it gives a lot of credence that this is an industry that is rapidly growing. Mhmm. But when and I think, actually, at this conference last year, Bob, we put out a slide that compared anonymized private valuations that we pulled out of pitch book and other sources compared to the one or two companies down in the public space, yeah, in this area.

And it’s, really, it’s an order of magnitude differential on very similar backlog and pipeline numbers and very similar approaches. But nobody’s giving me a $100,000,000 to buy some shipyards. But I think it is a massive opportunity for our shareholders, You know, if they want to have that certainty of an audited and well governed public vehicle that is building in that same space as where the VC hype cycle is in, we are one of those opportunities that need to sell there. Yeah. Definitely.

Take a look at some of

Sean Severson, CEO and founder, Watertow Research: the private company valuations and what they’re doing. I think you’ll be you’ll be you’ll be surprised, you know, because it certainly is an area that’s a top and forefront of people’s minds and attracting a lot of investment capital, but there are some great companies like OPT in the public space. You know, especially, again, with the story transitioning, I think that’s some of it too. You know, the well, the company has a longer history. Last few years, it made a change in the business model, and now it’s really hitting home, and it’s it’s fitting right into one of the biggest investment cycles out there in the private side right now.

So, yeah, now I’ll turn it up for any questions, or we got a couple minutes left. Yeah?

Philip Stratman, CEO, Ocean Power Technologies (OPT): Both. So the the drones are obviously you know, they’ve got their own propulsion systems, and, you know, they will operate at, you know, between four and six knots, say, and miles per hour with the payload deployed. They have a burst speed of closer to 20 knots, going up twenty four, twenty five miles an hour. The buoys are moored. And depending on where you are, the buoys are either on a single point mooring with shallower water, and you’re just doing some ISR work surface, or they’re sitting on, like, a three point anchor system if it’s deeper water, and particularly if you’re doing underwater detection because you want you want whatever you are putting down below the surface.

You really want that fixed point so you can find out what’s going on below the surface. The ocean is a pretty noisy place below the surface, so you need that long term monitoring because what you’re trying to do is detect the pattern of life so that you can then subtract that, and then you’re only left behind with what would be a noise signal that doesn’t hasn’t been there for three months consistently. It’s the submarine, unmanned, underwater assets, and you’re seeing, obviously, the extra large underwater vehicle unmanned vehicles are starting to come up. So, yeah, it’s anti submarine warfare is a is a very strong play in that area, and particularly in a in a in a world that is going increasingly hostile and national border focused. The mooring design we have is currently good for about 3,000 meter water depth.

So call that, give or take, 12,000 feet. That doesn’t get you into one of the trenches. Yeah. But you you can go deeper than that. It just requires it requires a willpower of the customer to realize that this is really where they’re trying to go.

There there there’s there’s more. You could put drones out there at the same time. The thing is with drones, again, they’re roaming. So if you’re trying to really get you need both. You need the fixed point to find stuff, and then you need the drones to additionally interrogate what what’s what you’ve seen around those fixed points.

Sean Severson, CEO and founder, Watertow Research: And, you know, and I guess to to leave with the idea,

Philip Stratman, CEO, Ocean Power Technologies (OPT): this is this is

Sean Severson, CEO and founder, Watertow Research: revenue The backlog is there. It’s building. This isn’t a concept or an idea. And maybe just touch a little bit about to leave investors with the financials.

Things have started to build. Backlog has started to build. So this isn’t an idea that’s trying to be sold out there in the marketplace. This is now a commercialization part of the company’s evolution.

Philip Stratman, CEO, Ocean Power Technologies (OPT): Yeah. So I think when when current management came in, the company was doing, give or take, about maybe a million dollars in r and d grants a year. I think last year, we closed at just under $6,000,000 revenues. Our backlog sits at around 15, the last published numbers, and backlog is contracted POs. So this isn’t you know, these are these are contracts that will be pulled down and converted to revenue over the next one, two year cycle.

Pipeline, which is qualified opportunities. So this is customers where we have NDAs, and we’re discussing actual projects as opposed to you know, TAMSAM calculations, it’s at just over $130,000,000 So it is a materially growing market. You know, we feel comfortable with the backlog we’ve built, and we see the opportunity of converting more of our pipeline down into backlog.

Sean Severson, CEO and founder, Watertow Research: And then if you wanna find out more about the company, you can access our our website as well, www.watercolorresearch.com. All of our research is open access, so you can so fireside chats, the research, podcasts, everything we’ve done. So if you wanna learn more about it, please take a look there. Feel free to reach out to me or, obviously, both Philip and and Bob are here today as well. So, hopefully, you have a meeting with them.

But wrap it up, and we’ll go on to the next next presentation. Thank you, everyone. Thank you.

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