Coda Octopus Group, Inc. (NASDAQ:CODA) Q2 2023 Earnings Call Transcript

Annmarie Gayle: No. The pipeline is the same. One program is in Japan and four programs in the U.S. In fact, one program is a commercial opportunity. They have launched their new program. And I think that we are selling into that program. So I think they’ve done successful trials with their underwater vehicle. And I think that they are in the process of — I think this will be for them, a rental model to — I think that program is alive. Our technology is part of their solution and the other programs are ongoing. But in this quarter, I think what I tried or the business is trying to emphasize is that the programs that we supported are advancing and moving from just their development fees into customer trials phase and we’re excited about that because it’s a significant move forward under the program.

Brian Kinstlinger: Got it. Thank you. And then my last question for now is, in the past, you’ve communicated — recent past, you’ve communicated your plan to invest more in sales and marketing. I see SG&A moved up a little bit, but not a material amount, at least in my opinion. Can you talk about where you are with that piece of the plan and what you have left, if you have something to invest in sales and marketing?

Annmarie Gayle: Yeah. So we’ve been doing a lot of legwork in the territories that are important to us. So Europe is really, really important. Asia is really important and the U.S. market. So let’s start with Asia. Really, what we are doing in Asia is expanding our network of agents and really what the business needs to do is to put boots on the ground to support agents and support our customers there. So the investment we’re making for marketing is supporting our agents in the field with support staff in country. And that’s the model that we think will be very effective for our customers there because what our customers want to know, especially for these programs that we’re working on, especially for the DAVD, that there’s a code of that can provide support in country.

So we’re in the process of moving support engineers into Japan to start with and China and South Korea. So that’s the first leg. And of course, as I’ve mentioned, expanding our agents’ network, which means that appointing more agents and we have done that in the last since this year. We have appointed a number of new agents and provided training. In fact, in June, we have quite a big team going out to China to do not just demonstrations, but extensive training and our senior hydrographic severe will be there for several weeks providing support and training to our agents. So we think that the best way for the countries where we don’t speak the language, the best way to support our customers like expanding our agent network, ensure that our agents are free and (ph) in country support for the opportunities that are ongoing and also when a customer has a problem on the ground, that, who the people are at hand to see this is what you need to do or the system needs to go back to base.

But we feel that this is the best model for us. So that’s that in the U.S., we continue to attend a lot of significant events and we are although our marketing costs were down, I think that on a full year basis, it’s just timing we will see marketing being much higher than last year because then we’ve got quite a lot of activities planned for the back end of the year. And in the U.S., we’re still looking to recruit focused business development stuff, and that’s ongoing. And similarly in Europe, we are looking for people, but they’ve got to be the right people with the right background. But I’m pleased to see that we’re expanding our agents’ network at the same time and providing quite a lot of support and training for ongoing opportunities.