Coda Octopus Group, Inc. Segments Disclosure

NOTE 15 -SEGMENT ANALYSIS

 

Our segment reporting is in accordance with the new standard ASU 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.

 

We operate three3 reportable segments, “Marine Technology Business”, “Acoustic Sensors and Materials Business” and “Defense Engineering Services Business” which are managed separately based upon fundamental differences in their operations. Segment operating income is total segment revenue reduced by cost of revenues and operating expenses, Research and Development (“R&D”), and Selling, General & Administrative (“SG&A”) identifiable with the reporting business segment. Corporate includes general corporate administrative expenses. The Acoustic Sensors and Materials Business (“PAL”) was acquired on October 29, 2024 and had no material income statement activity for the remaining two days of up to October 31, 2024. Therefore, there is no comparative financial data for PAL for 2024 FY. However, the fair value of assets acquired, and liabilities assumed for PAL have been included in our audited Consolidated Balance Sheet for the 2024 FY and in respect of the Segment Disclosure for 2024 PAL was included in the Supplemental Disclosures relating to the Marine Technology Business. The Segment Disclosure information for the 2025 FY includes full Income Statement information for PAL.

 

Our Chief Operating Decision Maker (CODM) evaluates the operating results and performance of all three of our segments using GAAP-reporting for revenue, expenses and net income by segment. This financial metric is used to view operating trends, perform analytical comparisons and benchmark performance between periods and among geographic regions, take decisions on business investments and monitor budget-to-actual variances on a quarterly and annual basis.

 

There are inter-segment sales in the table below which have been eliminated from our financial statements. Inter-company sales are not included in our financial statements. For segment reporting purposes we have shown in the table below our inter-company sales during the reporting period.

 

Coda Octopus Products (with entities operating in the UK, USA and Denmark) constitute the Marine Technology Business (“Products Segment”) and is an established supplier to the subsea marking where it sells and rents both hardware and software solutions which include imaging sonar technology solutions, diving and diving communications technology, geophysical products, rental equipment, customization, and field operations services. PAL is a supplier of products and services to the ultrasound, acoustic measurement and NDT market. Coda Octopus Engineering, Inc. (a Utah corporation) and Coda Octopus Martech Ltd (a UK corporation) constitute the Defense Engineering Services Business (Services Segment) and are subcontractors mainly to prime Defense contractors where they provide engineering services.

 

The following table summarizes segment asset and operating balances by reportable segment as of and for the years ended October 31, 2025 and 2024, respectively.

 

The Company’s reportable business segments sell their goods and services in four geographic locations:

 

	●	Americas
	●	Europe
	●	Australia/Asia
	●	Middle East/Africa

 

 

CODA OCTOPUS GROUP, INC.

Notes to the Consolidated Financial Statements

October 31, 2025 and 2024

 SCHEDULE OF SEGMENT REPORTING INFORMATION

		Marine Technology Business (“Products”)				Acoustic Sensors and Materials Business (“PAL”)				Defense Engineering Services Business (“Services”)				Corporate				Total
Year Ended October 31, 2025
Net Revenues		$	13,221,339			$	5,409,954			$	7,931,833			$	-			$	26,563,126
Cost of Revenues			3,375,922				2,237,430				3,287,406				-				8,900,758
Gross Profit			9,845,417				3,172,524				4,644,427				-				17,662,368
Research & Development			1,858,139				414,370				175,253				-				2,447,762
Selling, General & Administrative			4,091,421				1,920,985				2,466,341				2,199,831				10,678,578
Total Operating Expenses			5,949,560				2,335,355				2,641,594				2,199,831				13,126,340
Income (Loss) from Operations			3,895,857				837,169				2,002,833				(2,199,831	)			4,536,028
Other Income
Other Income			73,331				194,761				-				-				268,092
Interest Income			505,465				5,661				107,106				89,865				708,097
Total Other Income			578,796				200,422				107,106				89,865				976,189
Income (Loss) before Income Taxes			4,474,653				1,037,591				2,109,939				(2,109,966	)			5,512,217
Income Tax Expense
Current Tax Expense			201,167				43,118				183,338				722,192				1,149,815
Deferred Tax Expense (Benefit)			188,755				91,045				13,252				(60,580	)			232,472
Total Income Tax Expense			389,922				134,163				196,590				661,612				1,382,287
Net Income (Loss)		$	4,084,731			$	903,428			$	1,913,349			$	(2,771,578	)		$	4,129,930
Supplemental Disclosures
Total Assets		$	38,279,403			$	7,100,814			$	14,766,853			$	4,346,492			$	64,493,562
Total Liabilities		$	2,969,095			$	1,376,533			$	1,198,902			$	833,618			$	6,378,148
Revenues from Intercompany Sales - eliminated from sales above		$	6,144,638			$	51,896			$	374,311			$	2,600,000			$	9,170,845
Depreciation and Amortization		$	563,530			$	710,565			$	65,480			$	51,935			$	1,391,510
Purchases of Long-lived Assets		$	531,792			$	248,560			$	53,980			$	336,386			$	1,170,718

 

 

CODA OCTOPUS GROUP, INC.

Notes to the Consolidated Financial Statements

October 31, 2025 and 2024

 

		Marine Technology Business (“Products”)				Defense Engineering Services Business (“Services”)				Corporate				Total
Year Ended October 31, 2024
Net Revenues		$	12,806,603			$	7,509,558			$	-			$	20,316,161
Cost of Revenues			2,824,541				3,318,515				-				6,143,056
Gross Profit			9,982,062				4,191,043				-				14,173,105
Research & Development			2,019,112				223,317				-				2,242,429
Selling, General & Administrative			3,814,860				2,248,493				2,283,192				8,346,545
Total Operating Expenses			5,833,972				2,471,810				2,283,192				10,588,974
Income (Loss) from Operations			4,148,090				1,719,233				(2,283,192	)			3,584,131
Other Income
Other Income			53,960				34,422				-				88,382
Interest Income			657,817				198,239				82,719				938,775
Total Other Income			711,777				232,661				82,719				1,027,157
Income (Loss) before Income Taxes			4,859,867				1,951,894				(2,200,473	)			4,611,288
Income Tax Expense
Current Tax Expense			316,955				169,374				227,341				713,670
Deferred Tax (Benefit) Expense			(5,655	)			19,169				238,108				251,622
Total Income Tax Expense			311,300				188,543				465,449				965,292
Net Income (Loss)		$	4,548,567			$	1,763,351			$	(2,665,922	)		$	3,645,996
*Supplemental Disclosures
Total Assets*		$	40,922,453			$	13,404,567			$	3,217,524			$	57,544,544
Total Liabilities*		$	3,072,876			$	842,450			$	500,695			$	4,416,021
Revenues from Intercompany Sales - eliminated from sales above*		$	3,367,839			$	238,143			$	1,266,000			$	4,871,982
Depreciation and Amortization*		$	632,882			$	88,166			$	49,487			$	770,535
Purchases of Long-lived Assets*		$	345,191			$	23,786			$	89,103			$	458,080

 

*

In the 2024 FY Supplemental Disclosures Information, the Marine Technology Business Disclosure under “Total Assets” includes $4,529,648 of assets pertaining to PAL and under “Total Liabilities” includes $1,455,145 of liabilities pertaining to PAL. There was no Revenue from Intercompany Sales, Depreciation and Amortization or Purchases of Long-lived Assets pertaining to PAL.

 

 

CODA OCTOPUS GROUP, INC.

Notes to the Consolidated Financial Statements

October 31, 2025 and 2024