Virtuix Holdings Inc. Class A Common Stock Q1 FY2027 earnings call

General Commercial & Strategic Progress

• This quarter was one of the strongest commercial quarters in the company's recent history, with significant validation of its multi-market platform strategy after transitioning from initial consumer gaming focus to broader end markets.
• The company completed its NASDAQ listing in January 2026, and recently appointed new independent auditor Eisner Amper, with the audit transition causing a short delay in regulatory filing that is now complete.

Consumer Segment Highlights

• Launched Made for Meta certified OmniOne for Quest in collaboration with Meta in late June 2026, providing plug-and-play compatibility with the Meta Quest ecosystem, which has over 20 million headsets sold and an estimated 6 million active users.
• The Meta partnership has driven an immediate 150% increase in new orders post-launch, with momentum continuing into the current quarter. The company is exploring joint marketing and product bundling opportunities with Meta to further expand growth.

Defense Segment Highlights

• Selected as lead systems integrator for the U.S. Marine Corps infantry fireteam trainer project (supported by partner KBR), responsible for delivering the full four-person training system, with delivery expected to Quantico, VA in Q4 2026.
• Entered the fast-growing counter-drone training market, integrating OmniOne into Leetech's Counter-UAS Personal Trainer, which will be evaluated by the U.S. Marine Corps Training and Education Command.
• Expanded engagements across all branches of the U.S. military, including active projects with the U.S. Air Force, U.S. Army, U.S. Navy, and the first deployment to a Pennsylvania Air National Guard unit.
• The company's special board committee is actively reviewing acquisition targets in the defense training and services space with $10 million to $50 million in annual revenue, targeting targets that provide immediate access to government contract vehicles, sales channels, recurring revenue, and past performance credentials required for large government contracts.

Enterprise Segment Highlights

• Sold the first OmniOne Enterprise System to Tesla's Optimus humanoid robot division for use in robot teleoperation, a key use case for full-body simulation technology.
• Selected by NASA to provide OmniOne systems for a year-long Moon and Mars Exploration Analog Mission starting 2027, supporting simulated extravehicular activities for deep space mission research.
• Won a second consecutive Augie Award for Best Interaction Product, recognizing OmniOne's role in a humanoid robot teleoperation system developed by the University of Central Florida.

Healthcare Segment Highlights

• Signed a strategic partnership with Sirica Therapeutics to develop AI-driven autism therapy for children, delivering two OmniOne systems to Sirica's Bay Area treatment center. Sirica plans to open 100 treatment centers nationwide, creating a scalable long-term sales channel.
• Continued collaborative research with Rutgers University (autism therapy development) and Florida Gulf Coast University (physical therapy and neurorehabilitation evaluation) to gain clinical validation for therapeutic applications.

Virtuix reports its business across four core segments: Consumer, Defense, Enterprise, and Healthcare. For the first quarter of fiscal 2027, total company net sales were $767,000, down from $1,000,000 in the prior year period. The year-over-year decline is attributed to the completion of legacy pre-order backlog fulfillment in the prior year quarter, with all current quarter revenue coming from new customer orders. Total new orders for OmniOne systems increased 72% year-over-year, and new orders rose 150% after the June 2026 launch of OmniOne for Quest. Gross profit for the company increased 29% year-over-year to $227,000, and overall gross margin expanded 13 percentage points to 30% from 17% in the prior year period, driven by higher average selling prices for new systems. No separate absolute revenue figures or revenue contribution percentages are provided for individual segments in this quarter's results.

• Management reaffirms a clear staggered growth strategy: consumer will drive near-term revenue growth starting in 2027, while larger defense contract awards are expected to materialize meaningfully starting in fiscal 2028, with enterprise and healthcare emerging as longer-term growth verticals.
• Management expects the strong order momentum from the OmniOne for Quest launch to continue through the second half of fiscal 2027, including the holiday selling season.
• The company targets completion of one or more defense acquisitions with $10 million to $15 million in annual revenue in the near term.
• Management maintains a long-term target of 40% gross margin for OmniOne consumer units, and is focused on expanding gross margins from the current 30% company level as revenue grows.
• The company's core long-term priority is to grow revenue and high-value contracts while driving toward profitability.
• Delivery of the first U.S. Marine Corps infantry fireteam trainer is targeted for the fourth calendar quarter of 2026, with full revenue from large defense programs expected to start contributing meaningfully in fiscal 2028.

• Government defense program timelines are uncertain, particularly around fund availability and contract progression, which can delay delivery and revenue recognition for planned projects.
• The company is currently burning approximately $1 million in cash per month, an elevated level associated with being a newly public company, and while management expects to reduce this burn, continued cash burn creates reliance on future capital to fund operations and growth.
• Forward-looking demand projections for the new Meta-partnered product are based on early post-launch data, and there is no guarantee that current strong order momentum will be sustained.
• Expansion into multiple new verticals (defense, enterprise, healthcare) creates focus risks if the company is pulled into too many directions at once, which management has acknowledged and structured its staggered growth strategy to mitigate.

Q: How will the Made for Meta partnership drive demand in the back half of 2026, how does production capacity meet current demand, and what is the company's long-term revenue mix expectation across segments? / A: Management confirms strong post-launch order momentum is continuing into the current quarter, and expects this trend to hold through the holiday season, resulting in meaningful growth compared to last year. The company's established production facility has capacity for up to 3,000 units per month, equal to roughly $100 million in annual revenue, which can fully meet current projected demand. For long-term revenue mix, consumer will drive growth near-term, larger defense revenue will ramp starting next fiscal year, while enterprise will grow gradually and healthcare will emerge as a third major vertical longer term, with the company staying focused on consumer and defense as core near-term priorities to avoid overextension.

Q: What is the lead time for new OmniOne orders, what is the margin outlook for the Quest offering, and could a bundled Meta/Virtuix product launch in time for the 2026 holiday season? / A: New orders ship within days; only a small portion of post-launch orders from late June were recognized in the first quarter, with most revenue from these orders set to appear in the current quarter. Per-unit gross margins for OmniOne for Quest are currently near 40%, the company's long-term target, and management aims to maintain this margin. Bundling discussions with Meta are active and ongoing, with the goal of launching a bundled offering in time for the 2026 holiday season.

Q: What is the current cash burn run rate as the company moves toward profitability, and what caused the revised March 31, 2026 balance sheet? / A: Management confirms the current cash burn run rate is approximately $1 million per month, which is currently elevated due to new public company operating costs, and the company is working to tighten this figure over time. The revised balance sheet stems from technical classification adjustments for complex financing instruments (derivative liabilities associated with convertible notes) requested by the company's new auditor, and the changes are not material and do not impact operational metrics, revenue, or core costs.

Q: How has average selling price changed, and what drove the gross margin expansion this quarter? / A: Early pre-order OmniOne units sold at an average price of $2,595, after which pricing was increased to $3,495 for complete systems in November 2025. Current pricing for OmniOne for Quest is $2,595, with other SKUs ranging from $2,495 to $2,995. The gross margin expansion this quarter is due to the prior year quarter consisting mostly of lower-priced legacy pre-order backlog, while the current quarter's revenue comes entirely from new orders sold at higher updated price points.