Q3 2024 The Glimpse Group Inc Earnings Call

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Speaker Change: Welcome to the glimpse group quarter, three fiscal year, 'twenty 'twenty four financial results webinar.

Operator: Welcome to the Glimpse Group Quarter 3 Fiscal Year 2024 Financial Results Webinar. At this time, all participants are in a listen-only mode.

Speaker Change: At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation.

Operator: A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. The earnings release that accompanies this call is available in the Investor section of the company's website at https://ir.theglimpsegroup.com. Before we begin the formal presentation, I'd like to remind everyone that the 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 uncertainties that could cause actual results to differ materially from those described in the call.

Speaker Change: As a reminder, this conference is being recorded.

Speaker Change: The earnings release that accompanies this call is available on the investors section of the company's website at H T. T. P. S. Colon backslash backslash I R. Chop T. H E. G. L. I N T. S E G R O U.

Speaker Change: P Dot com back slash before.

Speaker Change: Before we begin the formal presentation I'd like to remind everyone that the statements made on today's call and webcast include those regarding future financial results and industry prospects are.

Speaker Change: Our forward looking and maybe subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the call.

Speaker Change: Please refer to the company's regulatory filings for a list of associated risks and we would also refer you to the company's website for more supporting industry information.

Operator: Please refer to the company's regulatory filings for a list of associated risks, and we would also refer you to the company's website for more supporting industry information. I would now like to hand the call over to Lyron Bentovim, President and CEO of the Glimpse Group. Lyron, the floor is yours.

Speaker Change: I would now like to hand, the call over to Lee, Ron Bento, I'm, President and CEO of the glimpse group.

Speaker Change: Lira the floor is yours.

Lyron Live Bentovim: Thank you, Cat, and thank you, everyone, for joining us. I am pleased to welcome you to the Glimpse Group's third quarter fiscal year 2024 financial results investor call for our quarter ended March 31st, 2024. During this quarter, we made concrete and tangible strides that validate our strategic transition to focus on providing enterprise-scale spatial computing, cloud, and AI-driven immersive recurring software solutions, or SpatialCore, as we refer to it internally, led by our subsidiary company, Brightline Interactive.

Speaker Change: Thank you Kash and thank you everyone for joining us.

Lyron Live Bentovim: We announce today that BrightLine Interactive entered into a $4 million plus 12-month contract with the Department of Defense ELD entity for a spatial computing ecosystem integrating AI workflows and accelerated compute for a variety of defense use cases. The ecosystem will empower users to combine massive datasets and perform complex calculations to analyze and process spatial data in order to derive insights, make predictions, and perform calculations on one-for-one digital twins addressing challenges in infrastructure, maintenance, operations, training, and simulation.

Speaker Change: I am pleased to welcome you to the claims group's third quarter fiscal year 'twenty 'twenty four financial results Investor call for quarter ended March 31st 2024.

Speaker Change: During this quarter, we made concrete and tangible strides that validate our strategic transition to focus on providing enterprise scale spatial computing cloud and AI driven the mercy of recurring software solution or spatial core that's what we refer to it internally.

Speaker Change: Our subsidiary company Lifeline interactive.

Speaker Change: We announced today the white wine interactive entered into a $4 million plus 12 month contract with the department of Defense D. O D entity for spatial computing ecosystem, integrating AI workloads and accelerated computing for a variety of different use cases.

Speaker Change: The ecosystem will empower users to combine massive datasets and perform complex calculations to annualize impulses spatial data.

Speaker Change: Order to derive insights makes predictions calculations on a one for one digital twins addressing challenges in infrastructure maintenance operation training and simulation.

Lyron Live Bentovim: In parallel, we are in the process of securing several additional multimillion-dollar space core contracts with multiple government, Department of Defense, and large enterprise customers. The short-term aggregate value of these contracts is in the $8 million to $12 million range.

Speaker Change: In parallel we are in the process of securing several additional multi million door spatial core contract with multiple government department of defense and large enterprise customers.

Speaker Change: It's short term aggregate value of these contracts is in the $8 million to $12 million range.

Lyron Live Bentovim: While there is no guarantee that some or all of these will come to fruition, we anticipate that a good portion of these will close before calendar year end 2024, with additional potential in the pipeline for calendar year 2025. Additionally, each one of these potential contracts has significant growth elements built into them that could lead to significant annual recurring software revenue after the initial engagement. We believe that spatial computing represents a transformative leap forward in how enterprises interact with the digital world, seamlessly integrating it with their physical surroundings.

Speaker Change: There is no guarantee that some or all of these will come to completion, we anticipate that a good portion of these will close before calendar year end 'twenty 'twenty four with additional potential in the pipeline for calendar year 2025.

Speaker Change: Each one of these potential contract has significant growth elements built into that that could lead to significant annual recurring software revenue after the initial engagements.

Speaker Change: We believe that spatial computing, what presents excellent form I think leap forward in how enterprises interact with the digital world.

Speaker Change: Seamlessly integrating it with their physical surroundings.

Lyron Live Bentovim: For example, this immersive technology enables us to create comprehensive digital twins that not only mirror complex real-world environments one-to-one but also enhance our ability to interact, analyze, and make informed decisions with potentially transformative applications across industries, including industrial, military, public sector, infrastructure, training, simulations, robotics, and many others. As discussed previously, we are working closely with some of the largest players in the tech industry, such as NVIDIA and Microsoft, as well as with some of the leading hardware players in the space, who serve as essential and innovative middleware, connecting their cloud and AI technologies and services with the needs of enterprises and organizations to facilitate immersive solutions and use cases at large scale.

Speaker Change: For example, we still must use technology enable us to create comprehensive digital twin star not only mill complex will award environment, one to one but also enhance our ability to interact analyze and making decisions with potentially transformative applications across industries, including India.

Speaker Change: Just real military public sector infrastructure training simulation robotic and many others.

Speaker Change: As discussed previously we are working closely with some of the largest players in the tech industry.

Speaker Change: And video and Microsoft as well as with some of the leading hardware players in the space.

Speaker Change: We serve as an essential and innovative middleware connecting their cloud and AI technologies and services with the needs of enterprises and organizations to facilitate immersive solutions and use cases at large scale.

Lyron Live Bentovim: To illustrate, last week, our subsidiary Brightline Interactive, together with Cesium and NVIDIA, teamed up with Geospatial Intelligence at GeoINT Symposium 2024 to introduce Brightline Spatial Core, which uses AI workflows for complex computation on top of real-life datasets, enabling powerful, real-time, massive, data-driven digital twin and simulation applications.

Speaker Change: To illustrate last week, our subsidiary Brightline Interactive together, we see assume Nvidia team acted the geospatial intelligence G O N.

Speaker Change: Symposium 'twenty 'twenty four to introduce brightline spatial core, which you see is a L workflows or complex computation on top of real life data, if it's enabling powerful real time massive data driven digital twin and stimulation applications.

Lyron Live Bentovim: As discussed in our last call, we expected our strategic transition to result in a short-term reduction in revenue as we divested and shut down non-core operating assets while we reduced our expenses targeting other non-core opportunities. Our other Glimpse subsidiary companies, Curiel, Sector 5 Digital, Fortel Reality, and Glimpse Learning, continue to generate meaningful enterprise revenues, including recently from SNAP, NHL, Valderrama, Halliburton, and many others, and are cash flow neutral to positive from their internal operations.

Speaker Change: As we discussed in our last call we expected our strategic transition to result in short term reduction in revenue as we divested and shut down non core operating assets, while we reduce our expenses targeting other noncore opportunities.

Speaker Change: Yeah.

Speaker Change: I'll go give me subsidiary companies Q real sector, five digital foretell reality and glimpse learning continues to generate meaningful enterprise revenues, including recently from snap N H L.

Speaker Change: Halliburton and many others and are cash flow neutral to positive from their internal operations.

Lyron Live Bentovim: Looking forward, we expect revenues to be generally flat to up in the coming two quarters as we finalize our divestiture plans, and then we expect revenues to grow significantly in Q4 calendar year 2024 and continue to grow into 2025 as we start recognizing revenues from the DOD entity contract we recently signed and the others we expect to follow. As Maydan will detail in his prepared remarks, given the development I detailed, we are positioned to reach cash flow profitability in the coming months. With that, I will now turn it over to Maydan Rothblum, Glimpse's CFO and COO, to review the financial results.

Speaker Change: Looking forward, we expect revenues to be generally flat to up in the coming two quarters as we finalize our divestiture plans and then we expect revenues to grow significantly in Q4 calendar year 2024, and continue to grow into 2025 as we start recognizing the revenues from the D O D.

Speaker Change: And the contract, we recently signed and the others, we expect to follow.

Speaker Change: As you may download detailing his prepared remarks, given that the boat developments I detailed we are positioned to reach cash flow profitability in the coming months.

Speaker Change: With that I will now turn it over to Mike Dunlap Bloom, Lindstrom, CFO and COO, who will review the financial results Mcdonough.

Maydan Rothblum: Thanks, Lyron. 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, which were filed after the market closed today. Please note that I'll refer to Adjacente Vida and other GAAP measures.

Speaker Change: Thanks for your own.

Speaker Change: In my portion to a summary review of our financial results. Upon breakdown is available in our 10-Q and press release that were filed after market close today.

Speaker Change: Please note that I'll refer to adjusted EBITDA and other non-GAAP measures.

Maydan Rothblum: For a calculation of adjusted EBITDA and other non-GAAP measures, please refer to the MD&A section of our 10-Q filing, which you can find on our website under SEC filings. Revenue for Q3 fiscal year 24 was approximately $1.9 million compared to approximately $3.67 million for Q3 fiscal year 23, a decrease of approximately 48 percent. Revenue for the nine months ended March 31st, 2024 was approximately $7.1 million compared to approximately $10.6 million for the nine months ended March 31st, 2023, a decrease of 33%.

Speaker Change: So our calculation of adjusted EBITDA and other non-GAAP measures. Please refer to the MD&A section of our 10-Q filing which you can find on our website under SEC filings.

Maydan Rothblum: The decrease for both periods reflects our strategic shift to spatial computing, cloud, and AI-driven immersive software solutions, which has resulted in a turnover in our historical customer base and our divestiture of non-strategic assets. Gross margin for Q3 fiscal year 24 was approximately 70% compared to 67% for Q3 fiscal year 23. We expect our gross margins to continue to remain in the 65% to 75% range.

Speaker Change: Revenue for Q3 fiscal year 'twenty four was approximately approximately $1 9 million compared to approximately $3 7 million for Q3 fiscal year 'twenty four a decrease of approximately 48%.

Speaker Change: Revenue for the nine months ended March 31st 2024 was approximately $7 1 million compared to approximately $10 6 million for the nine months ended March 31st 2023, a decrease of 33%.

Speaker Change: The decrease for both periods it's lifestyle.

Speaker Change: Strategic shifts to spatial computing cloud and AI, driven immersive software solutions, which has resulted in a turnover in our historical customer base and our divestiture of Nonsignificant and nonstrategic assets.

Speaker Change: Gross margin for Q3 fiscal year 'twenty four there was a pause.

Awesome, only seven 7% compared to 67% for Q3 fiscal year 'twenty three.

Speaker Change: We expect our gross margins to continue to remain in the 65% to 75% range.

Maydan Rothblum: As previously discussed, we have made significant reductions in our operating cash expense base, as reflected by a 62% reduction in our operating expenses this quarter compared to the same quarter last year. Our operational cash break-even point is now at approximately $3 million revenue per quarter or $12 million revenue annually. The adjusted EBITDA loss for Q3 fiscal year 24 was approximately 0.89 million compared to an EBITDA loss of approximately 1.13 million in Q3 fiscal year 23.

Speaker Change: Previously discussed we have made significant reductions in our operating cash expense base as reflected by a 62% reduction in our operating expenses this quarter compared to the same quarter last year.

Speaker Change: Our operational cash breakeven point is now at approximately $3 million revenue per quarter or 12 million revenue annually.

Speaker Change: Adjusted EBITDA loss for Q3 fiscal year 'twenty four was approximately.

Speaker Change: 0.8, 9 million compared to an EBITDA loss of approximately 1.13 million in Q3 fiscal year 'twenty three.

Maydan Rothblum: Theoretically, applying Q3 fiscal year 23 revenue, which we believe is achievable again, would have resulted in a solidly cash flow positive quarter this quarter. Given our current level of revenues, and subject to the signing of some of the contracts Lyron mentioned, we expect to be cash flow positive for more operations commencing in September 2024 and onward. In such a scenario, and given our current cash balance, we expect to be self-sufficient without needing any external funding.

Speaker Change: Theoretically applying Q3 fiscal year 'twenty three revenue.

Speaker Change: We believe is achievable again, whatever resulted in a solidly cash flow positive a quarter this quarter.

Ron: Given our current level of revenues and subject of assigning some of the contracts you. Ron mentioned, we expect to be cash flow positive from our operations commencing in September.

Ron: Oh 2024 and onwards.

Ron: In such a scenario and given our current cash balance we expect to be self sufficient without needing any external fundings.

Maydan Rothblum: As of March 31st, 2024, the company had cash and cash equivalents of approximately $4.3 million. It also had no outstanding corporate debt or preferred equity obligations. I'd now like to pass it back to Lyron for some closing remarks, after which we will begin our Q&A session.

Ron: As of March 31st 2024, the company had cash and cash equivalents of approximately $4 3 million.

Ron: Company has no outstanding corporate debt or preferred equity obligations.

Speaker Change: I'd now like to pass it back totally wrong for some closing remarks, after which we will begin our Q&A session.

Ray: Thank you Ray done.

Lyron Live Bentovim: Over the last couple of quarters, we have executed on the strategic transition plan we have outlined. This morning, we reaped the first fruit of this execution.

Speaker Change: Over the last couple of quarters, we have executed on the strategic transition plan, we have outlined.

Speaker Change: This morning, we reached the first food of this execution.

Lyron Live Bentovim: Over the coming months, we expect to make additional strong progress on our special core initiative and see significant progress, which we hope to publicly share with you. I thank you all for your interest and support of the Glimpse Group, and now I'll turn the call back over to the operator to take some questions. Thank you. The floor is now open for questions. If you do have a question, please press star 1 on your telephone keypad at this time. If your question has been answered, you can

Speaker Change: Over the coming months, we expect to make additional strong progress on our special core initiatives and see significant progress, which we hope to publicly share with you.

I. Thank you all for your interest and support of the claims group and now I'll turn the call back over to the operator to take some questions.

Operator: Thank you. The floor is now open for questions. If you do have a question, please press Star 1 on your telephone keypad at this time. If your question has been answered, you can remove yourself from the queue by pressing 1. If you'd like to submit a question on the web, simply click the Ask a Question button, type your question, and hit Send. Please hold while we poll for questions. Again, ladies and gentlemen, press 1 to ask a question on the phone. At this time, I'd like to turn the call back to management for any closing remarks.

Speaker Change: Thank you the floor is now open for questions. If you do have a question. Please press star one on your telephone keypad at this time. If your question has been answered you could remove yourself from the queue by pressing one if you'd like to submit a question on the web simply click the ask a question button type your question and hit submit.

Speaker Change: Please hold while we poll for questions.

Speaker Change: Again, ladies and gentlemen star one to ask a question on the phone.

Speaker Change: At this time I'd like to turn the call back to management for any closing remarks.

Lyron Live Bentovim: I would like to thank each of you for joining our earnings conference call. We look forward to continuing to update you on our ongoing progress and growth. If we were unable to answer any of your questions, please reach out to us directly.

Speaker Change: I would like to thank each of you for joining our earnings conference call. We look forward to continuing to update you on our ongoing progress in growth.

Speaker Change: If we were unable to answer any of your questions. Please reach out to US directly. Thank you and have a great afternoon.

Operator: Thank you. Have a great afternoon. Thank you. This does conclude today's program.

Operator: Thank you. This does conclude today's webinar. Thank you for your participation, and have a wonderful day.

Speaker Change: Thank you. This does conclude today's webinar. Thank you for your participation and have a wonderful day.

Operator: [inaudible] ??

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