Q3 2025 The Glimpse Group Inc Earnings Call

Good morning, everyone. Please remain on the line your conference will begin in just a few moment. Please remain on the line. Your conference will begin in just a few moments.

Operator: Good morning, everyone. Please remain on the line. Your conference will begin in just a few moments. Please remain on the line. Your conference will begin in just a few moments.

[music].

Welcome to the glimpse group's third quarter fiscal year 'twenty twenty-five financial results webinar.

Operator: Welcome to the Glimpse Group's third quarter fiscal year 2025 financial results webinar. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded.

At this time all participants are in a listen only mode.

<unk> and answer session will follow the formal presentation.

As a reminder, this conference is being recorded.

Operator: The earnings release that accompanies this call is available on the Investors section of the company's website at httpsir.theglimpsegroup.com.

The earnings release that accompanies this call is available on the investors section of the company's website at H T. T. P. S. I R dot the glimpse script dot com.

Operator: 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 uncertainties that could cause actual results to differ materially from those described in the call. 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.

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 uncertainties that could cause actual results to differ materially from those.

As described in the call.

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.

Laron Bentovim: I would now like to hand the call over to Laron Bentovim, President and CEO of the Glimpse Group. Laron, the floor is yours. Thank you, Kelly, and thank you, everyone, for joining us. I'm pleased to welcome you to the Glimpse Group's Q3 Fiscal Year 2025 Financial Results Investor Call for our quarter-ended March 31st, 2025. In this quarter, we continue the strong momentum of the previous quarter. Our outlook for revenue is strong, led by special calls, traction with various DOD entities and increasingly with opportunities in the enterprise segment as well. This momentum is expected to be reflected in our upcoming quarter, which may be the highest revenue quarter for us over the past two fiscal years.

I would now like to hand, the call over to Lauren Benjamin President and CEO of nickel in scrip Levonne the floor is yours.

Thank you Kelly.

Thank you everyone for joining us.

I used to welcome you to the game.

Speaker Change: Q3 fiscal year 2025 financial results Investor call for our quarter ended March 31 2025.

Speaker Change: In this quarter, we continued the strong momentum of the previous quarter.

Speaker Change: Look for revenue was strong led by special cause destruction with various entities and increasingly with opportunities in the enterprise segment as well.

Speaker Change: This momentum is expected to be reflected in our upcoming quarter, which may be the highest revenue quarter for us over the past two fiscal years.

Speaker Change: In parallel we delivered our second consecutive quarter of positive cash flow from operations, a major achievement and a direct result of our reorganization and cost control efforts over the past several quarters as well as our strategic focus on this critical.

Laron Bentovim: In parallel, we delivered our second consecutive quarter of positive cash flow from operations, a major achievement and a direct result of our reorganization and cost control efforts over the past several quarters, as well as our strategic focus on special calls. As a reminder, SpatialCore, led by our subsidiary company Brightline Interactive, is an operating system for spatial computing, integrating data and AI into 3D environments, enabling cloud compute and creation of complex simulations, while providing insights and valuable information that is presented in 3D form and based on real source of truth data. This has transformative applications in robotics, drones, and digital twins, to name a few.

Speaker Change: As a reminder, special.

Speaker Change: Facial and led by our subsidiary company Brightline Interactive.

Speaker Change: Operating system for spatial computing integrating data and AI into three D and Brian, enabling cloud compute and creation of complex simulations, while providing insights and valuable information that is presented in three D 40, and based on real social tool steel.

Speaker Change: These are some formative applications in robotics and.

Speaker Change: And just a little tweak to name a few.

Laron Bentovim: In essence, it supercharges big data. This is not a theoretical at this stage. Special Core is delivering in some of the most advanced and challenging environments with tremendous potential to become an enabling technology in the 3D, big data, AI cloud space.

Speaker Change: In SA.

Speaker Change: Its supercharge is big data.

Speaker Change: This is not a theoretical at this stage, especially of course delivery and some of the most advanced and challenging and brands with tremendous potential can you comment on enabling technology in the three D. Big data AI cloud space recently special Court developments includes.

Laron Bentovim: Recent Special Core developments include. Brightline is expected to deliver its $4 million DOD contract this month, which would represent a fundamental achievement. During the quarter, Brightline successfully delivered to the U.S. Navy its first full-motion immersive simulator system. This milestone marks a significant achievement in adoption of immersive technologies to enhance the capabilities, effectiveness, and safety of the U.S. military service, setting the ground for potential phone-on-contract. Last week, we received official confirmation for a new seven-figure special court deal, which we expect will be signed in the coming week. The U.S. government's continuing resolution and the lack of a federal budget for 2025 has delayed the potential awarding of multiple government and DOD opportunities.

Speaker Change: Pipeline is expected to deliver its full plus northern doors D O D contract this month.

Speaker Change: Which would represent a fundamental achievement.

Speaker Change: During the quarter brightly successfully deliver it to the U S. Navy its first full motion immersive stimulator system.

Speaker Change: Milestone marks a significant achievement in the adoption of immersive technologies to enhance the capabilities effectiveness and safety of the U S military service starting to grow off of potential for all qualified.

Speaker Change: Last week, we received official confirmation for a new seven figure special core deal, which we expect will be signed in the coming weeks.

Speaker Change: The U S government, continuing resolution and the lack of a federal budget for 2025.

Speaker Change: Delayed the potential awarding of multiple government and DHT opportunities. However, we continue to be well positioned for multiple opportunities and expect to confirm a few additional seven figure special corporate unity in the coming months.

Laron Bentovim: However, we continue to be well-positioned for multiple opportunities and expect to confirm a few additional seven-figure special core opportunities in the coming month.

Speaker Change: While special quarters, our strongest growth driver or other immersive companies are also performing well in those segments.

Laron Bentovim: While Spatial Core is our strongest growth driver, our other immersive companies are also performing well in their segment. Mortel Reality entered into several contracts for its AI-driven immersive training product. Sector 5 Digital enters into follow-on agreements with Halliburton, Ecolab, Calderma, Walmart, and AT&T. Glimpse Lens' snap revenues grew significantly from the prior quarter and is tracking well. Glimpse Learning entered into multiple software license contracts in the healthcare and educational segment.

Speaker Change: Well still reality entered into several contracts for its AI driven the mercy is bringing Portland.

Speaker Change: After five digital enters into fall on a gradual halyburton equal.

Speaker Change: Walmart and AT&T.

Speaker Change: Police lenses snap revenues grew significantly from the prior quarter and it is striking well.

Speaker Change: And then just learning entered into multiple software license contract in the healthcare and education segments.

Speaker Change: However, despite all this strong traction in special course, AI and cloud driven revenues a deep pipeline of revenues across all businesses are positioned immersive industry tier one customer base positive cash flow and solid cost balance and clean balance sheet.

Laron Bentovim: However, despite all this strong traction in special course AI and cloud-driven revenues, a deep pipeline of revenues across our businesses, our position in the immersive industry, tier one customer base, positive cash flow, and solid cash balance and clean balance sheet, there continues to be a sharp disconnect between our intrinsic value and our current public company valuation, both standalone and versus our public and private com. As such, we may seek to utilize our untapped $2 million common share buyback plan in order to protect our stock if circumstances warrant its utilization.

Continues to be a sharp disconnect between our interesting value in our first public company valuation, both standalone and versus our public and private comps.

Speaker Change: We may seek to utilize our untapped 2 million common share buyback plan in order to protect our stock if circumstances warrant thinks utilization.

Maydan Rothblum: With that, I will now turn it over to Maydan Rothblum, Glimpse's CFO and COO, to review the financial results. Maydan? Thanks, everyone. I will limit my portion to a summary review of our financial results.

Speaker Change: With that I will now turn it over to Mike Dunn workflow glimpses CFO and COO to review the financial results, Let me John.

Mike Dunn: Thanks to their own.

Speaker Change: I will limit my portions of salary review of our financial results.

Maydan Rothblum: A full breakdown is available in our 10-Q and press release that will file before market open today. Please note that I'll refer to non-core, non-GAAP measures, for the calculation of which, please refer to the MD&E section of our 10-Q filing. Q3 fiscal year 25 revenue of approximately $1.4 million. a 25% decrease compared to Q3, fiscal year 25, ending March 31st, 2024 revenue of approximately $1.9 million. This expected and previously discussed decrease was primarily driven by revenue recognition timing.

Mike Dunn: The breakdown is available in our 10-Q.

Speaker Change: And press release that were filed before market opened today.

Speaker Change: Please note that I'll refer to non core.

Speaker Change: GAAP measures for the calculation of wedge. Please refer to the MD&A section of our 10-Q filings.

Speaker Change: Do you agree fiscal year 'twenty five revenue of approximately $1 $4 million.

Speaker Change: 25% decrease compared to Q3 fiscal year 25, ending March 31, 2020 for revenue of approximately $1 9 million.

Speaker Change: This is expected and previously discussed the decrease was primarily primarily driven by revenue recognition timing.

Speaker Change: Q4 fiscal year 'twenty five.

Maydan Rothblum: Thank you for FY25.

Maydan Rothblum: we're at conclusion. ending June 30, 2025, is expected to be in the $3.2 to $3.8 million range and possible as we deliver and recognize the final stage of the large Department of Defense Entities Contract for Spatial Coordination. Revenue for the nine months ended March 31st, 2025 was approximately $7 million, essentially flat compared to the same nine month period last year. despite divesting and consolidating multiple subsidiary Fiscal Year 2025, ending June 30, 2025. We expect revenues in the $10 to $11 million range, a 15% to 25% increase for fiscal year 2025, again, despite divesting and consolidating multiple subsidiary companies during this fiscal year.

Speaker Change: Well I think it was.

Speaker Change: Ending June 32025.

Speaker Change: But to be in the 3.2 to $3 $8 million range and profitable as we deliver and recognize the final stage of the large department of defense as it takes contracts for state core.

Speaker Change: Revenue for the nine months ended March 31, 2025 was approximately $7 million essentially flat compared to the.

Speaker Change: Nine months period last year.

Speaker Change: Despite divesting.

Speaker Change: Celebrated multiple subsidiary companies.

Speaker Change: For fiscal year 'twenty five ending June 32025, we expect revenues in the $10 million to $11 million range.

Speaker Change: It's a 25% increase for the full fiscal year 'twenty five again.

Speaker Change: Divesting your consolidated local subsidiary companies doing this fiscal year.

Speaker Change: Gross margin for Q3 fiscal year 'twenty five was approximately 72% compared to 70% for Q3 fiscal year 'twenty four.

Maydan Rothblum: Gross margin for Q3 fiscal year 25 was approximately 72% compared to 70% for Q3 fiscal year 24. We expect our going forward gross margin to be in the 65% to 75% range, an increase from our previous guidance due to a larger portion of revenue coming from spatial core and software license sales. Net operating cash provided for operations in Q3 fiscal year 25 was a positive cash gain of approximately 0.13 million compared to a net operating cash loss of approximately negative 0.92 million for Q3 fiscal year 24.

Speaker Change: Expect that were going forward gross margin to be in the 65% to 75% range and increase well cleaver.

Speaker Change: This guidance due to a larger portion of revenue coming from special core and software license sales.

Speaker Change: The operating cash provided from operations in Q3 fiscal year 'twenty five.

Speaker Change: Positive cash gain of approximately 0.1 3 million.

Speaker Change: That's a net operating cash loss of approximately negative nine 2 million.

Speaker Change: For Q3 fiscal year 'twenty four.

Maydan Rothblum: This is our second consecutive positive quarter. Net operating cash loss from operations in the nine-month period, fiscal year 25, was approximately negative $0.13 million, compared to approximately negative $4.3 million for the same nine-month period last year. despite having similar level of revenue for the period. This turnaround reflects our significant reorganization efforts, cost reductions, and maintenance of high-gloss markets.

Speaker Change: This is our second consecutive positive quarter.

Speaker Change: Net operating cash loss from operations in the nine months period fiscal year 'twenty five what was it.

Awesome way negative 0.1, 3 million compared to approximately negative $4 3 million the same nine month period last year.

Speaker Change: I had a similar level of revenue.

Speaker Change: <unk>.

Speaker Change: Mr. At around this led to a significant reorganization efforts cost reductions and maintenance of high gross margins.

Speaker Change: Fiscal year 'twenty three.

Maydan Rothblum: This is for year 23. Q3 fiscal year 25 adjusted EBITDA loss of approximately $1 million compared to an adjusted EBITDA loss of $197. negative point nine million for Q3 fiscal year twenty four Primarily driven by lower recognized revenue this quarter However, we expect the upcoming quarters Q4 25 fiscal year 25 EBITDA to be positive due to higher expected revenue for the nine-month period ending March 31st, 2025, adjusted EBITDA loss of approximately $1.2 million compared to an adjusted EBITDA loss of approximately $3.5 million for the same period last year. which means that for fiscal year 25 in total, we will likely have a slightly negative EBITDA compared to an EBITDA loss of negative 4.6 in fiscal year 24.

Speaker Change: Oh Q3, especially the 25 adjusted EBITDA loss of approximately $1 million compared to an adjusted EBITDA loss of.

Speaker Change: Negative <unk> 9 million for Q3 and fiscal year 'twenty four.

Really driven by lower recognized revenue this quarter. However.

Speaker Change: However, we expect the upcoming quarters Q4, 'twenty four 'twenty five EBITDA.

Speaker Change: Positive due to higher expected revenue.

Speaker Change: For the nine month period, ending March 31st 2025, adjusted EBITDA loss of approximately $1 2 million compared to an adjusted EBITDA loss of approximately <unk>.

Speaker Change: $3 5 million for the same period last year.

Speaker Change: Which means that for fiscal year 'twenty five in total we will likely have a slightly negative EBITDA compared to an EBITDA loss of negative four six in fiscal year 'twenty four.

Speaker Change: A medical treatment.

Maydan Rothblum: The company's cash-in-equivalent position as of March 31, 2025 was approximately $7 million, with an additional $0.65 million in accounts receivable.

Speaker Change: The company's cash and equivalent position at March 31st 2025 was approximately $7 million with an additional 26 5 million of accounts receivable.

Speaker Change: We continue to maintain a clean capital structure with no debt no convertible debt no preferred equity.

Maydan Rothblum: We continue to maintain a clean capital structure, no debt, no convertible debt, and no performance.

Speaker Change: I'd like to pass it back to really rolling So closing remarks, after which we will begin our Q&A session.

Laron Bentovim: I'd like to pass it back to Liron for closing remarks, after which we will begin our Q&A. Thank you, Maydan. This was an impactful quarter. While Spatial Core has made impressive progress, I believe that it is only at the precipice of what it can become. But like all good things, this requires patience. As a company with a solid balance sheet, profitable operations, and several growth vectors, we are well positioned to capitalize on the immersive opportunities in front of us.

Donald: Thank you Donald.

Speaker Change: This wasn't impactful quarter well.

Speaker Change: While special Cora has made impressive progress I believe he is only at the precipice of white Cheddar to come.

Speaker Change: But like all good things this requires patience.

Speaker Change: As a company with a solid balance sheet profitable operations and several growth sectors, we are well positioned to capitalize on the mercy mercy as opportunities in front of us I. Thank you all for the interest and support of the Globe's books and now I'll turn the call back over to the operator to take some questions.

Operator: I thank you all for the 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, Laurent. If you'd like to submit a question, you can either type it in the chat box below or raise your hand. We'll start with any audio questions and follow that with some write-in questions as time allows. To ask questions from the phone lines, please press star 1 at this time. If using a speakerphone, please pick up your handset for optimum sound quality. Please hold just a moment while we poll for any questions from the phone.

Speaker Change: Thank you Ron if you'd like to submit a question you can meet their type it in the chat box below or raise your hand, we'll start with any audio questions and follow that with some write in questions. As time allows us to ask questions from the phone lines. Please press star one at this time, if using a speakerphone. Please pick up your handset for optimum sound.

Speaker Change: Quality. Please hold just them on that while we poll for any questions from the phone lines.

Speaker Change: I am not showing any questions from the phone lines at this moment.

Operator: I am not showing any questions from the phone lines at this moment. We'll turn it to some writing questions if available. does not seem to be any questions out there.

Speaker Change: It will turn into some writing question sets available Laval.

Speaker Change: It does not seem to be any questions out there. So I. Thank everyone for joining our conference call.

Operator: So I thank everyone for joining our conference call. We look forward to continuing to update you on our ongoing progress and growth. If you are unable to answer any of your questions, please reach out to us directly.

Speaker Change: Look forward to continuing to update you on our ongoing progress and growth.

Speaker Change: If you were unable to answer any of your questions. Please reach out to us directly. Thank you.

Operator: Thank you. Thank you, everyone.

Speaker Change: <unk>.

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

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