Glimpse Group, Inc. Q1 FY2025 earnings call

• Delivered first phase of large DoD contract and made progress on securing multimillion-dollar Spatial Core contracts with government and large enterprise customers, expecting confirmations in December 2024 and early 2025. - Other immersive businesses had positive momentum with mid-six figure contracts in water, energy, education industries. - QReal saw significant revenue increase from largest customer. - Expect revenues to continue increasing based on signed contracts and revenue pipeline, and to be cash flow positive in current and future quarters without need for capital raise. - Board exploring aggressive strategic options to unlock value. - On October 1, 2024, divested QReal business, creating expected net cash value, simplifying operations, eliminating Turkey country risk, and retaining revenues from QReal’s largest customer under certain conditions, and issued senior secured convertible note and minority equity stake in Newco.

Q1 fiscal year 2025 revenue was approximately $2.44 million. It reflected a 44% increase compared to Q4 fiscal year 2024 revenue of approximately $1.7 million, but a 21% decrease compared to Q1 fiscal year 2024 revenue of approximately $3.1 million. The quarter-over-quarter increase was primarily driven by an increase in Spatial Core revenues. The year-over-year decrease was due to strategic alignment leading to turnover in legacy customer base and business divestitures. Spatial Core had short-term aggregate contract value in $5 million to $10 million range. Other immersive businesses had positive momentum with mid-six figure contracts in various industries. QReal saw significant revenue increase driven by largest customer for AR lenses and 3D models. Revenue contribution percentages not explicitly stated in absolute terms but key segments mentioned are Spatial Core, other immersive businesses, and QReal.

• Expect revenues in next three upcoming quarters to exceed $3 million on average per quarter and aggregate revenue for fiscal year 2025 ending June 30, 2025, to be in $11 million to $12 million range, representing 25% to 35% increase from 2024 fiscal year. - Expect to be cash flow positive in current quarter and quarters after, resulting in increased cash balance without need for capital raise. - Current cash operating expense base pre revenue is now less than $1 million per month and expected to remain so going forward.

• Valuation disconnect between intrinsic value and public company valuation has had and continues to have substantial negative effect on ability to execute on growth strategy. - Board exploring strategic options during fiscal year, and uncertainties associated with the strategic review process.

Q: Can we talk a little bit about the operating expense level, which was said to be $1 million or a little less per quarter, and if it includes the cost savings related to QReal?

A: Yes, right now run rating at under $1 million of monthly costs, always a moving target as they add and subtract based on needs.

Q: How are you finding customer opportunities, with people coming to you or channel help?

A: Have good network of relationships with customers and channel partners, many customers coming to them with needs, and leaders constantly talking to customers to understand their needs and how solutions address them.

Q: Is the software license revenue, which doubled in the quarter, a one-time event or a durable run rate?

A: More or less a reasonable number to expect going forward based on Spatial Core and other business aspects, with growth inherent in it and trend up though quarterly fluctuation possible.

Q: Were the government contracts tied to fiscal year 2025 for the federal government and related to last budgetary process?

A: Government hasn't approved budgets for 2025 yet, will have to wait until new Congress is in to put together budget, expected to happen early in 2025, and things will trickle down from budget approval to contracts being finalized.