The Glimpse Group Inc. Q3 2023 Earnings Call
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Welcome to the Glimps Group Fiscal Third Quarter 2023 Financial Results webinar. At this time, all participants are in a listen only mode. A question and answer session will follow its formal presentation. As a reminder, this conference is being recorded.
The earnings release that accompanies this call is available on the Investors section of the company's website at ir.viglimscrewf.com. Before we begin the formal presentation, I'd like to remind everyone that statements made on today's call and webcast including those regarding future financial results and industry prospects are forward looking and may be subject to a number of risks and uncertainty.
and a fee of the Gwensk group around the floor is yours.
Thank you, Vax, and thank you everyone for joining us. I am pleased to welcome you to the Glimbs Group's fiscal third quarter, 2023 financial results in Vesta Call, for a quarter ended March 31st, 2022.
Glimps fiscal third quarter was highlighted by continued revenue growth, combined with significant cost reductions as we drive towards our goal of achieving cash neutrality from operations in calendar year 2023. And the initial stages of a strategic repositioning towards providing immersive enterprise software and services.
that are driven by cloud computing and AI.
For our fiscal third quarter of 2023, we generate a revenue of approximately $3.7 million, the second largest revenue quarter in the company history and representing 79% growth compared to third quarter 2022 revenues of approximately $2 million. For the first nine months, we have been able to
of fiscal year 2023, we generated record revenue of approximately 10.6 million, representing 122 percent growth, or 2.2 times, compared to the 4.8 million for the San period last year.
Our substantiated revenue pipeline is the largest in the company's history.
While we are generally encountering a slower cell cycle in the translation of these into science contracts, a general indicator of a macroeconomic environment in our view, this pipeline could lead to significant revenue growth in the coming quarters.
To illustrate this point, during the quarter we announced new contracts with the U.S. Naval Surface World War Center, Dolgren Division, Denny's, the University of Maryland, Robert H. Smith School of Business, and one of the largest telecom service providers to name a few. I've made a remedy, a derivative letter, but it's given to me that the U.S. Naval Surface World War Center ??ing
achieved that through a mix of revenue growth and if needed additional cost cuts.
In parallel to driving key technology initiatives around AI, computer vision, and NST blockchain integration into our various immersive technology software platforms and solutions, we recently initiated the Bloom Swipe Strategic Initiative to develop and provide cloud-based, scalable immersive technology software enterprise platforms.
We believe that in order to unleash the power of immersive technologies and realize their full potential, they must be run on far larger computing power and on networks that can deliver various immersive experiences.
In essence, the immersive industry needs to untether itself from hardware-centric platforms to cloud-driven platforms.
While tremendous progress has been made in recent years, immersive computing has been done on individual devices like phones and headsets.
This has inhibited the power of the application that can be developed, delivered, and utilized by enterprises.
As we look to the near future, we clearly see that a major shift in compute is already underway.
With that in mind, we believe that the future of all immersive technology platforms and products lies in high for scale.
which means computing and delivering complex spatial data or immersive content in real time, all the time to all devices and all locations. The
To illustrate one example, utilizing our digital twin-portal technology entities in big data segments such as government, defense, and large enterprise can effectively create and consistently access and interact with complex immersive environments that accurately, digitally, were replicate their actual facilities.
and engineering footprint, also known as digital twins.
The potential applications are robust, from corporate training to military and industrial simulations, to security, to facilities planning, to global collaboration, and data analysis, and much more.
But by world-renowned technology partners such as Nvidia, Microsoft, and AT&T, we have commenced the process of bringing hyper-scale cloud, advanced network, and unprecedented immersive interactions to commercial, public, and private sector customers around the world.
And it is not fiction. It is happening right now.
In fact, today, we were selected to support a major immersive technology hardware provider to accelerate their computing interfaces into GPU enabled clouds with streaming and visualization capabilities.
are not tied to any specific field to solve major problems across all sectors.
We serve as a connector and knowledge center between large cloud service providers, network designers, artificial intelligence researchers, creators of open standards and immersive technologies. This is not a trivial task. However, Glimps is uniquely positioned to deliver on this vision, specifically since our ecosystem has produced what we believe is one of the highest concentration of immersive technology talent.
and industry relationships anywhere in the world. This gives us significant first mover advantage. We will continue to explore the filing of additional patents beyond our 10 issued patents and several others previously filed patents, in particular ones revolving around immersive technologies, AI, and or cloud computing. During this quarter,
The company moved forward with the previously discussed long-term incentive plan
The vesting of these stock options sell a care over four years from issuance and is primarily based upon the company's achievement of significant annual revenues between 30 and 100 million dollars and stock prices between 20 dollars a share to 60 dollars a share. Growth targets with a fixed exercise price of $7 a share.
In addition, and unrelated to this plan, the executives reduced their cash salaries by 20-25% and have never sold a share of the company's into inflection.
These are all strong indicators of our belief in the company and its long-term potential. With that, I will now turn it over to Maidan Rothlu, glimpses CFO and COO to review the financial results. Maidan? Thanks, Laurent.
I will limit my portion to a summary review of our financial results. A full breakdown is available in our 10Q and the press release that were filed after Margaret Close today.
Please note that I'll refer to adjusted EBITDA and other non- GAAP measures . With the calculation of adjusted EBITDA and other non- GAAP measures , please refer to the NDNA section of our report.
to filing, which you can find on our website under FTC Filing.
Total revenues ...
For the three months ended March 31st, 2023, it's approximately 3.67 million, compared to approximately 2.05 million, for the three months ended March 31st, 2022. An increase of 79% in the second highest quarter. Our vlog?
in the company history.
Total revenue for the nine months ended March 31st, 2023 was approximately 10.570 million compared to approximately 4.77 million for the nine months ended March 31st, 2022, an increase of approximately 122% in the highest for a nine-month period in the company's history.
The increase for both periods reflects the addition of several subsidiary companies through acquisitions and new customers.
The growth margin was approximately 67%.
which is within the 60 to 70% range of gross profit. We expect to continue to see going forward now that we are past the full integration of sector 5 digital and the Brightline acquisitions.
Adjusted EBITDA loss for P3 fiscal year 2023 was approximately 1.1 million.
FLAF compared to the comparable 2022 period, despite a significant increase in headcount due to several acquisitions.
In addition, this quarter's adjusted EBITDA was approximately 1.5 million lower than the prior quarter ended December 31st, 2022, which was negative 2.6 million.
Casual use in operating activities was approximately 1.1 million or Q3 fiscal year 2023.
Compared to approximately 3.4 million in the prior quarter ended December 31, 2022, and 3.1 million in the quarter ended September 3, 2022. This is the significant improvement I've seen in both our adjusted EBITDA and cash flow from operations.
reflect the cost-cutting measures we initiated, including workforce reduction of approximately 10 percent, cash salary reductions ranging from 20 to 25 percent for executives, intense to 20 percent for several higher-salt revenues. So, please, replace that common.
stock of the company or stock options, reduction in least office space and reduction in outsource services. We will continue to take this step required to meet our goal of achieving cash home neutrality from existing operations in calendar year.
2023. To recap, we ended the quarter with approximately 8.3 million cash and equivalent, including 2 million cash held in escrow for potential future performance payments related to the S5D acquisition.
We have no material cache liabilities, no preferred equity, outstanding and open-burntable bed obligations. With that, I'd like to pass the back to the Ron for some closing remarks after which we will begin our Q&A session.
Thank you, Ray Doc.
This is a very exciting time for the immersive industry in general and glimpses in particular.
Development in cloud computing, AI and blockchain represents strong potential catalyst for our business and the potential announcement in a few weeks by Apple of a new XR headset could lead to significant momentum for the industry.
Meta's Oculus headsets, revolutionized the industry, enabling enterprise level VR.
Apple's potential headset could push it to the next level in terms of enterprise capabilities on both the VR and AR fronts as well as the meaningful step towards larger consumer adoption.
Our strategic hyperscale initiative is a game changer. We plan to lever the years of development by glimpses to know how RIP and our relationships to position glimps as a leader in the movement to cloud-based immersive technology solutions.
As we continue to reiterate, we are part of a long-term game. However, significant progress is constantly making it being made and we are at the forefront from capabilities, scale, and customer-based perspectives.
I thank you all for your interest in and support of the Dooms group. And now I'll turn the code back over to the operator to take some questions.
in and support of the Gooms group, and now I'll turn the code back over to the operator to take some questions. Thank you, LeRun.
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Yes, there is one question. I will read the question and then we'll do my best to answer it
This is a question from an investor. I'll just use his first name, Darrell. Congratulations on your progress this quarter, specifically in growing revenue and continuing cost during this difficult economic period.
My question regards your backlog. Is it possible to give us more details regarding the opportunities in areas such as digital twins? Are there any preferred areas with regards to TAM, margins, etc.? Are there areas that are lower hanging food with shorter revenue project late time?
So, first of all, thank you for your question. I would kind of try and answer your question in a couple of different ways.
In terms of our backlog, without going into numbers, when we have our board meeting at the last kind of last week.
The backlog I presented to the board versus the previous one I presented only a quarter before was almost doubled. So kind of that's the scale. And the backlog that those there is not just, we are talking to someone. Those are kind of significant opportunities that are.
very clear what we're doing for whom and how much they will pay us and usually are in advanced negotiations. What we're seeing out there is just a slowness in decision making and that is I think part of the economic cycle as a whole. We actually saw it kind of releasing a sentence in February and then...
Hopefully that answers your questions. I see a few additional questions out there, so I'll take them one by one.
So this is a question from an investor called Ryan. Talk about your acquisition strategy over the next 18 months. Pipeline of acquisitions.
So Ryan, I will take that in two parts. The first part, in terms of pipeline of acquisitions, it has never been stronger. We're getting significant inbound interest from companies around the world that one explorer being part of glimpses.
Unfortunately, given where our stock is, it is significantly more challenging to make what I would say are creative acquisitions. That's obviously kind of, Muslim acquisitions are based on using our stock and bringing people into the glimpse family. And given where our stock is right now, it is in my view, challenging.
to make those acquisitions are creative. Therefore, we're continuing to talk to a lot of companies, but I would probably refrain from making significant acquisitions until we get a pick up in our stock.
I have a question from an investor named Jack. Is VRAR cloud-based initiative open or does it favor any specific cloud vendor?
The initiative is open, but it is relying upon the partnerships that we've outlined as the initial partners that we plan on working with as we're integrating our initiative. So we're building it in a kind of open way, but levering the relationship and access we have.
from some of our significant partnerships. The last question I have here, can you share more color on funding growth of the current business and growth by acquisitions?
significant partnerships. The last question I have here, can you share more color on funding growth of the current business and growth by acquisitions? This is again from Ryan.
So the growth of the current business is self-sustained and as we've done outlined in our presentation, we are working towards our goal of getting the company to be self-sustained. The strategy as a whole for glimpse has been to grow in twofold, both our gap.
shareholders and that's could happen even either if we see a really good deal or if our stock price gets to the point We're kind of we can lever that to do more creative acquisitions
I'm going to refresh one more time to see if there are any additional questions. And it seems like these are it. So I really appreciate everyone's time and attention. Anyone that would like to talk to us, we are very open to discussing our business with our shareholders. Feel free to contact us through our website or email us directly. And we would be happy to schedule some time to talk.
Let's go turn the keys to the list. What in all?
Thank you for your participation and have a wonderful day.