VirTra, Inc. Q4 FY2025 earnings call

2025 was defined by extended federal funding disruption. Recently, programs like JAG and COPS Fund have reopened. Demand remained strong with $25.6 million in backlog and $26.7 million in bookings. Aligned operations, inventory, production capacity. Added second federal sales resource and experienced marketing director. Progressing through GSA reentry process. APEX analytics platform integrated, integration with BBS4 advanced, introduced drone defense training solution, VXR platform adoption growing. Military pipeline developing with active programs

Fourth quarter total revenue was $2.9 million compared to $4.7 million in the prior year period. Full year total revenue was $22.4 million compared to $26.4 million in 2024. Government revenue for the year was $17.8 million compared to $22.9 million in 2024. International revenue for the year was $4.2 million compared to $3.1 million in 2024. Commercial revenue was approximately $400,000, consistent year over year. Fourth quarter gross profit was $1.7 million or 58% of total revenue compared to $2.9 million or 62% in the prior year period. Full year gross profit totaled $15.2 million or 68% of revenue compared to $19.4 million or 74% in 2024. Fourth quarter net operating expense was $3.3 million, a 23% decrease from $4.2 million in the prior year period. Full year net operating expense was $14.8 million compared to $17.4 million in 2024. Fourth quarter operating loss was $1.6 million compared to $1.3 million in the prior year period. Full year operating income was $0.4 million compared to $2 million in 2024. Fourth quarter net loss was $1 million or 9 cents per diluted share consistent with the prior year period. Full year net income was $3 million or 2 cents per diluted share compared to $1.4 million or 12 cents per diluted share in 2024. Adjusted EBIT for the full year was $1.6 million compared to $2.9 million in the prior year period. Ended the year with $18.6 million in cash and $30.8 million in working capital. Bookings for the fourth quarter totaled $7.3 million, contributing to the full-year bookings of $26.7 million. Backlog at December 31st, 2025 stood at $25.6 million, including $13.8 million in capital, $5.1 million in service, and $6.7 million in step

Funding is moving again with multiple cycles of progress. Focus on converting activity into revenue in a disciplined but efficient way. Expecting a regimented release of funding. Backlog provides flexibility. Need to navigate timing dynamics. Sales and marketing execution strengthened, product capabilities enhanced

Federal funding delays affected revenue timing. Uncertainty in grant submission, selection, and approval timelines. Variability in funding release based on multiple factors. DHS-related activities on hold. Uncertainty around AI monetization and integration challenges

Q: Expand on military market engagements.

A: Multiple engagements across army, navy, marine corps. Programs like SVT, V100 Next Generation. Longer sales cycles but activity robust.

Q: Quoting activity and sales touch points.

A: Demand high, quotes out but reliant on grant submission and selection. International market monies flowing except DHS.

Q: Grant process details.

A: Sales folks working with customers, grant stage in CRM, variables in submission and selection timelines.

Q: Backlog breakdown.

A: Backlog has capital, service, step components with varying timeframes.

Q: Fourth quarter adjusted EBITDA.

A: Not readily available.

Q: Military milestones.

A: Mix of partnering and bidding on contracts, Army acquisition core restructuring may impact.

Q: AI use.

A: AI used for video shoots, code analysis, AI tutor, cost savings but monetization challenging