The Glimpse Group, Inc. Price & Performance (VRAR)

Thank you, Jamie. And thank you everyone for joining us. I'm pleased to welcome you to the Gloom's Group's Q2 fiscal year twenty twenty five financial results investor call for a quarter ended December thirty one, twenty twenty four. I am very proud to announce that in addition to continued strong revenue growth, This quarter, we achieved positive EBITDA positive cash flow and positiveness income. This is the first time we've achieved positive EBITDA in our history. As a public company and is a direct result of our strategic and operational over the past several quarters. With our strategic transition to focus on special core most across our product base, we are well positioned to capture the vast potential in the immersive technology space over the coming years as the immersive technology cycle gets closer to mass adoption. There are tremendous opportunities in front of us and to facilitate in late December, we raised We currently have approximately $8,500,000 in cash and a very clean capital structure. During the quarter, our subsidiary company BrightLine Interactive delivered the second phase of its large DoD contract. An achievement of significant performance and technological milestones. DLI entered into an initial contract with the U. S. Navy for an immersive AI driven simulator system to be delivered in the coming months.

Setting the ground for potential follow on contracts in 2025 and beyond. BLI delivered a scalable immersive solution to a global government service integrator positioning itself as a leading middleware for processing and visualizing information in three d space and setting what we believe has the potential to become an in The The continuous has delayed the potential awarding of multiple government and DoD opportunities. We hope this will be resolved promptly in March 2025 when the current continuing resolution and with The new administration and Congress now in place. Led by our subsidiary Fortell Realty, we continue to make strong progress on commercializing our AI driven immersive training product. And have experienced encouraging initial traction with our customers and partners. We have a strong long term revenue pipeline and expected contracts but putting these aside, we already have a reasonable visibility as to the reminder of fiscal year twenty twenty five ending in 06/30/2025. Driven by the timing of existing contacts, revenue recognition for Q3 FY 'twenty five, we expect a decline in revenue and negative adjusted EBITDA. To be more than offset by a very strong Q4 FY twenty twenty five with significant revenue growth positive adjusted EBITDA and profitability.

For the full fiscal year 2025 ending 06/30/2025 The, we expect aggregate revenue to significantly exceed our FY 'twenty four revenue and to be about EBITDA breakeven for the full fiscal year versus a significant adjusted EBITDA loss in the prior fiscal year. With that, I will now turn it over to Meydan Rothblum, Bloom's CFO and COO The review the financial results. [indiscernible] I will limit my portion to a summary review of our financial results. A full breakdown is available in our 10 Q and press release that were filed before market opens today.

Please note that I'll refer to adjusted EBITDA and other non GAAP measures. For the calculation of adjusted EBITDA and other non GAAP measures, please refer to the MD and A section of our 10 Q filing. Which you can find on our website under SEC filings. Q2 fiscal year twenty five revenue of approximately $3,170,000 reflecting 52% increase compared to Q2 fiscal year 'twenty four which ended 12/31/2023. Revenue of approximately $2,080,000 and b, a 30% increase compared to Q1 fiscal year twenty twenty five, a quarter to end of September thirty, twenty twenty four, revenue of approximately $2,440,000 The increase in both comparative periods was primarily driven by an increase in spatial core revenues as well as growth in our other business Gross margin for Q2 fiscal year twenty twenty five was approximately 64% compared to 68% for Q2 fiscal year twenty twenty four. Decrease was driven by revenue The, which tends to oscillate a bit between the quarters. On average, we expect our going forward gross margins continue to be in the 60% to 70% range. Q2 fiscal year twenty twenty five positive adjusted EBITDA of approximately $280,000 compared to an adjusted EBITDA loss of approximately negative $1,330,000 for Q2 fiscal year twenty twenty four.

Net operating cash provided from operations for Q2 fiscal year twenty twenty five was approximately $170,000 compared to a net operating cash loss approximately negative $1,680,000 for Q2 fiscal year twenty twenty four. Important to me, as Yaron mentioned, this is the first profitable EBITDA quarter in the company's history as a public traded The. Reflecting our significant restructuring efforts over the past few quarters combined with So specifics regarding [indiscernible] For Q3 fiscal year twenty twenty five, we have expect a decline in revenue to a range of $1,500,000 to $2,000,000 with a negative adjusted EBITDA. To be more than offset by a strong Q4 fiscal year twenty twenty five with expected revenue range of between $3,300,000 and $4,000,000 positive adjusted EBITDA. For our fiscal year twenty twenty five ending 06/30/2025, we expect aggregate revenues to exceed $11,000,000 compared to $8,800,000 for fiscal year 'twenty four. A 25% plus increase in annual revenue and breakeven adjusted EBITDA for the fiscal year versus significant adjusted EBITDA loss in the prior fiscal year. Our current cash operating expense base fee revenue is now less than $900,000 per month. Given our contracted and projected revenue cash in going forward we expect to generate positive cash flow in each of the remaining quarters for fiscal year twenty twenty five.

Company's cash and equivalent position as of 12/31/2024 was approximately $8,500,000 with an additional $1,400,000 in accounts receivable.

The increase in our cash position was primarily primarily a result of our December 24 registered direct equity financing, in which we raised $7,300,000 in gross cash proceeds from one investor The clean structure. We continue to maintain a clean capital structure with no debt, no convertible debt and no preferred equity. Lastly, on December 24, 2024, The received a written notice from NASDAQ informing The company that it had regained compliance with NASDAQ listing which requires listing securities to maintain a minimum bid price out $1 This closed The matter that originated on 09/03/2024.

I'd now like to pass it back to Liron for some closing remarks.

After which we will begin our Q and A session. Thank you, Midan. As we guided in previous quarters, we continue to and have achieved strategic and operational restructuring, revenue growth, profitable operations, major contracts and key technological developments in the area of AI, special computing, allowed and immersive technologies. [indiscernible] [indiscernible] and are well positioned to execute on our growth strategy and the huge opportunities in front of us. I thank you all for your interest in and support of the The Group. And now I'll turn the call back over to the operator to take some questions. Jenny? Thank you, Leron.

If you'd like to submit Now our first audio question is coming in from Casey Ryan of Westpark Capital. Casey, your line is live.

Thank you. Good morning.

Great quarter gentlemen. It looks really good. I had a couple of questions. Just high level, would you care to frame for everybody or for me, I guess, What the revenue split looks like between commercial and [indiscernible] feels like there's a lot of positive activity obviously around the DoD and government opportunities, but I'm just wondering if you can give us some sense The of the split for revenues. Good morning, Casey.

And thank you. At this point, we're probably around 40% -ish government and 60% commercial.

And what do you imagine as you look forward maybe just The the remainder of this fiscal year? Does that feel like it will stay steady? Or do you think that will change in some meaning meaningful way as we go forward?

I think for the remainder of our fiscal year, we will be kind of around that range. And then as we look into 2025, we're hoping to increase the government percent of this as kind of some of that business comes in.

Yes. Okay. All right. Terrific. And then Tell me what your perspective is. It feels like there's a lot of very clear use cases now being talked about around DoD and maybe other government but military applications specifically. For your solutions What's the development of the end customer, I guess commercial versus government, do you feel like the commercial opportunities are or use cases are as clearly defined, I guess? Yes.

No, I think The kind of the applications on the kind of military defense side are going to lead to even further kind of and larger opportunities on the commercial side. So we're definitely lowering work we're doing on the kind of defense side to then put solutions in front and that will take time to get to commercial side, but those will be very significant applications over the same technologies.

Okay, terrific. And then my third question is just around the operating expense line. I think there was a lot of progress or a big a big reduction there in the OpEx line versus last year, but even versus the prior quarter, Meydan, I think you had mentioned $900,000 per month as sort of an OpEx run rate, but correct me if I misheard that. Are we thinking that OpEx will be In the same range per quarter moving forward and I think my math is sort of $1,900,000 type of number. Per quarter or do we think that those levels will start to rise a little bit as we move into the end of the year? [indiscernible] Casey, The estimate is correct. I think it will be stable going forward for certainly the remainder of the year. We'll see what happens going forward. We do have some capacity runway under that. It really depends on the timing of some of these larger contracts may hit in the coming months. So we'll wait and see. But at the current level of revenue, this is The expected operating base going forward.

Okay.

All right.

Terrific. And then just to sort of round out on things that we talked about in the past, I guess, have there been anything any meaningful and maybe there haven't been because you didn't include them in the press release, but opportunities in terms of divestitures and then I guess on the other side of the coin, are there any opportunities that you see to potentially acquire important or new assets out there that you guys are maybe working on in terms of business development?

The answer to both is yes. We see kind of opportunities to monetize and divest pieces of our business that we see as less critical for what we're doing and kind of we're exploring some of those and on the same time, we're seeing a lot of interesting opportunities on the outside And we're always looking to see how we can structure deals accretive to the company and then productive in our kind of path forward. So there's opportunities on both sides, but not going to rush into anything that doesn't make sense for shareholders.

Okay.

But putting any timing, it's something that like we should continue to pay attention to as being potentially positive both ways. Terms of monetizing assets and acquiring new assets as we move forward.

Yes. That's definitely something to pay attention to. Okay, good. Well, terrific quarter. Thank you For the time and the questions. Thank you, Casey.

Thank you very much. Your next question is coming from Jack Rubinstein of Dike Partners. Jack, your line is live.

Hello, guys. I hope you can hear me.

Anyway, I want to just go down to The basics get an understanding of what your immersive technology is.

From what What I gather The use of artificial intelligence Is the use of is a predictive science.

So using artificial intelligence, you ask questions.

The role that Glynpse plays is in order to answer those questions, one must simulate possible outcomes. So for instance, in the military area, if there's a an issue, a place for instance, where do I place my fleet, so on and so forth, The AI creates questions, creates predictions as The possibilities and your division answers those questions vis a various simulation. Is that a a proper or just description and as AI grows, do we get more and more questions and that leads More and more immersive simulations. Thank you. Very good, Khorsh. Question and description. Let me try and put a little bit of color, Jack.

Into kind of some of our AI integration and kind of values. A couple of examples obviously, on the kind of the DoD side, I will be very kind of vague. For obvious reasons. And I'll try and be more specific a little bit on some of the commercial utilization of AI in what we're doing. So on the military side, if you think about information and information that exists right now in the military, it is mostly confined [indiscernible] And kind of you've got a lot of sources of information that is coming in a variety of ways. Some of it is visual, some of it is data driven, Some of it is in a variety of kind of fans of sound and other And what we're kind of basically doing is [indiscernible] the DoD take all this information convert the two d information into actionable three d information that then AI can interact with. And then humans can interact with and then other non NPC elements can interact with. To kind of create value for the industry. And kind of I like to bake, but kind of people that understand can really kind of visualize where it's going.

On the commercial side, one of the things we're working right now is we've integrated AI into our multi person platform allowing to simulate any scenario with AI. So imagine you're trying to simulate a sales call or a challenging HR situation or a doctor that has to give bad news to a patient. Our environments puts you in that room.

You can be the doctor and you have a patient and you have to give them bad news. And the AI will act with you based on information we're providing it allowing you to really kind of get that experience before you go do it in the real life. So hopefully that gave you a little bit of color Yes. Thank you very much. Yes. Yes. And that obviously is a hugely growing field. So I mean, if you maintain your your preeminent position, I feel that's a good thing for Glimpse.

Yes, definitely.

Okay. Thank you very much. While we don't appear to have any more questions on the phone lines. I can hand back to Leron if you've got any questions through the [indiscernible] Thank you, Jenny. So there's two questions in the webcast and I'll read them and try and answer them a little bit. And one of them kind of ties to what Jan just asked about. So the first one is how do you plan to integrate AI into your offering in 2025 and beyond? So I think kind of that ties very well to Jack's question that we just answered. There is kind of The immersive world and AI kind of fully integrate kind of and I believe that the progress we've seen in AI over the last two years has really taken [indiscernible] to have all these interactions come into life using immersive technologies, virtual reality and augmented reality And what we see is integrating AI into our full product set as we're kind of evolving and finding all these use cases across military and defense, [indiscernible] education, and commercial businesses and integrating that into there. The next question I have is, would the company be involved in more government contracts soon?

I certainly hope so. We've been kind of working on building a pretty significant pipeline of opportunities that we are executing on. Obviously, that requires the government to have a budget for 2020. '5, which hopefully will be resolved in the coming weeks as the continued resolution expires in March. And once the budget is set, hopefully, kind of the opportunities that we are working on will be budgeted and then kind of we will hear positive news and that will kind of drive our increase in our government business in 2025.

Okay, Leland, do you have any emailed questions?

I think that's what I have.

Okay. Brilliant. Well, now I will turn back over to you for your closing remarks.

So before we go to closing remarks, with Medan says that there's another question. Medan, if you can read it, I don't see it on my [indiscernible] Just want to ask, what kind of actions are you taking against the competitors? What makes VRAR better than any other company in the field?

I don't like to brag and I see this as a great opportunity kind of I see kind of competitors in The space as partners in building immersive technology. I think this industry has significant growth potential our advantages in each one of our kind of solutions and technologies. And we've built over the last nine years kind of what is one of the largest immersive technology companies in the world. But I think the growth is not by kind of beating our competitors by kind of helping build the industry and the use cases and The will create significant opportunities for all of us.

There's another question. What is the timeframe for your project's execution?

So we are continuing to execute on all of the opportunities If we are referring to the large DoD contract that would be executed and finalized at the first period of performance by the second the fourth quarter in our fiscal year's Q2 calendar year.

And there's another question. What can be the impact of government spending as the majority of revenue now comes from contracted government? So I think there's potentially positive impact from from that because they're diverting government spend from areas that have not been very efficient to future technology, boosting kind of the new administration is already kind of Hi, Laidip. AI as one of the initiatives that it's pushing And I expect that to have a positive impact on us in the mid to long term rather than a negative impact. I would like to thank each and every one of you for joining our earnings conference call.

We look forward to continuing to update you on an ongoing process And if we have any questions that we have not been able to answer, please reach out to us directly.

Thank you. This does conclude today's webinar. [indiscernible]