Glimpse Group, Inc. Q2 FY2025 earnings call

• Achieved positive EBITDA, cash flow, and net income for the first time as a public company, a result of strategic and operational restructuring. - Raised $6.8 million in net proceeds from a registered direct equity offering in late December 2024. - Subsidiary Brightline Interactive BLI delivered the second phase of a large DoD contract and entered an initial contract with the U.S. Navy for an immersive AI-driven simulator system. - Foretell Reality making strong progress on commercializing AI-driven immersive training. - Regained NASDAQ compliance as of December 24, 2024.

In Q2 Fiscal Year 2025, revenue was approximately $3.17 million. This is a 52% increase compared to Q2 Fiscal Year 2024 ($2.08 million) and a 30% increase compared to Q1 Fiscal Year 2025 ($2.44 million). The revenue split is approximately 40% government and 60% commercial. Gross margin for Q2 Fiscal Year 2025 was approximately 64% compared to 68% for Q2 Fiscal Year 2024, driven by revenue mix.

• Q3 FY2025 revenue expected to decline to $1.5 million to $2 million with negative adjusted EBITDA. - Q4 FY2025 revenue expected between $3.3 million to $4 million with positive adjusted EBITDA. - Full fiscal year 2025 aggregate revenue expected to significantly exceed FY2024 revenue ($8.8 million) to over $11 million, with breakeven adjusted EBITDA. - Expected positive cash flow in remaining quarters of FY2025. - Cash and equivalent position as of December 31, 2024 was approximately $8.5 million.

• Continuing resolution and launch delay of BLI for 2025 delaying potential awarding of multiple government and DoD opportunities. - Forward-looking statements may be subject to risks and uncertainties causing actual results to differ materially.

Q: Would you care to frame for everybody or for me, what the revenue split looks like between commercial and government and what you think the shape of that looks like moving forward?

A: At this point, we're probably around 40 percent-ish government and 60% commercial. 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.

Q: How do you plan to integrate AI into your offering in 2025 and beyond?

A: There is kind of the immersive world and AI kind of fully integrated kind of and I believe that the progress we've seen in AI over the last two years has really taken the ability 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, health care, education and commercial businesses and integrating that into there.

Q: Would the company be involved in more government contracts soon?

A: 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 2025, 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're 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.