VirTra, Inc. Q3 FY2025 earnings call

• Managed through slower Federal funding cycle with backlog growth. Redesigned website launched in September with encouraging early results. Sales model improved with targeted personnel changes. Appointed Grant Barber to Advisory Board. STEP program strong with consistent adoption and high renewal rates. Introduced V-One Portable Simulator for smaller departments. International revenue more than doubled vs prior year. Demonstrated next-generation Soldier Virtual Trainer (SVT) system for U.S. Army and introduced APEX analytics platform. Disciplined cost management and updated STEP program with 3-year commitment and strong renewal trends.

Total revenue for the third quarter of 2025 was $5.3 million, down from $7.5 million in the prior year period. Government revenue in Q3 was $4.1 million vs $6.9 million prior year; international revenue was $1.2 million vs $0.4 million prior year. Gross profit for Q3 was $3.5 million (66% of total revenue) vs $5.5 million (73%) prior year. Bookings for Q3 were $8.4 million, up from $4.6 million in Q2. Backlog as of September 30, 2025, stood at $21.9 million, including $10.2 million in capital, $5.3 million in service, and $6.4 million in STEP contracts.

• Expect revenue conversions to improve when government shutdown ends and grant awards resume. Backlog, recurring revenue base, and strong balance sheet provide flexibility. Disciplined cost management and enhanced contract structures support continued progress.

• Federal funding delays affecting short-term revenue recognition. Agency procurement cycles moving slower. Ongoing uncertainty with director roles and funding authorizations impacting decision-making for award releases.

Q: Looking at the booking strength in the quarter, can you talk a bit about were there any multiyear deals that skewed that result? Or is it a fairly typical cadence versus prior? And then maybe -- was a lot of that international versus domestic or disproportionately?

A: At the end of the quarter, a booking of about $4.8 million was received, which skewed to the international customer. Bookings for Q3 were $8.4 million, up from $4.6 million in Q2.

Q: Just curious if you could give an update on the [ BXR ] and if you're seeing the same sort of headwinds you're seeing in the broader business in this market as well.

A: The BXR is fully developed with training scenarios and certified courses, but seeing same headwinds for funding as broader business. Good market acceptance but released at a time of tight funding.