VirTra, Inc Q4 FY2024 earnings call

• 2024 was challenging due to federal funding delays, but sequential booking growth was achieved each quarter, backlog expanded, and engagement with customers deepened.
• Secured international contracts, with training solutions in 44 countries and first V-XR platform sale in Canada.
• V-XR platform rollout is a strategic priority, with strong early customer reception.
• Significantly expanded scenario catalog in Q4, leveraging AI to accelerate content production.
• Completed final development phase of U.S. Army’s IVAS program 42 days ahead of schedule, transitioning to Anduril.
• Invested in operational infrastructure improvements, including new production facility, ERP system, and automation.

For the fourth quarter of 2024, total revenue was $5.4 million, compared to $10.9 million in the prior year period. Full year 2024 revenue was $26.4 million, down from $38.8 million in 2023. Government revenue in 2024 was $22.9 million vs $31 million in 2023. International revenue in 2024 was $3.1 million vs $6.5 million in 2023. Q4 2024 bookings grew to $12.2 million, a 37% sequential increase from Q3 2024. Full year 2024 bookings totaled $29.6 million. Backlog as of December 31, 2024, was $22 million, including $10.6 million in capital, $6.6 million in service and warranties, and $4.8 million in STEP contracts.

• Focus on executing strategy, strengthening customer relationships, and improving sales/operational efficiencies in 2025.
• Aim to convert backlog to revenue, scale content library, and remain industry leader in immersive training.
• Expect majority of $22 million backlog to become revenue in 2025, with some service contracts extending to 2026/2027.

• Uncertainty in federal funding environment and grant distribution delays.
• Dependence on government funding cycles and budget negotiations impacting near-term order conversion.

Q: How long do you think the current funding softness will last?

A: Likely a couple more quarters of assessment, then significant growth and distribution of funds once stabilized.

Q: What initiatives are you undertaking to weather uncertainty?

A: Sales team helping customers with grants, guiding to proper grants and grant writers, and meeting with policy leaders in D.C. to gain traction.

Q: When will bookings be recognized as revenue?

A: Majority of bookings expected to become revenue in 2025, with some service contracts extending to later years.

Q: Thoughts on V-XR pricing and market opportunity?

A: Price point is appropriate, targeting smaller agencies and budget-constrained ones; V-XR has certified training courses and potential for growth in headset adoption over next few years.