The Glimpse Group, Inc.

Welcome to the Glimpse Group's second quarter fiscal year 2025 financial results webinar. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. The earnings release that accompanies this call is available on the Investors section of the company's website at at ir.theglimpsgroup.com. That's ir.theglimpsgroup.com. Before we begin the formal presentation, I'd like to remind everyone that statements made on today's call and webcast, including those regarding future financial results and industry prospects, are forward-looking and may be subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the call. please refer to the company's regulatory filings for a list of associated risks. And we would also refer you to the company's website for more supporting industry information. I would now like to hand the call over to Liron Bentevin, President and CEO of The Glimpse Group. Liron, the floor is yours.

Thank you, Jenny, and thank you everyone for joining us. I'm pleased to welcome you to The Glimpse Group's Q2 fiscal year 2025 financial results investor call for a quarter ended December 31st, 2024. I am very proud to announce that in addition to continued strong revenue growth, this quarter we achieved positive EBITDA, positive cashflow and positiveness income. This is the first time we've achieved positive EBITDA in our history as a public company and is a direct result of our strategic and operational restructuring over the past several quarters. With our strategic transition to focus on special core mostly complete and with the increasing incorporation of enabling AI elements across our product base, we are well positioned to capture the vast potential in the immersive technology space over the coming years as the immersive technology cycle gets closer to mass adoption. There are tremendous opportunities in front of us and to facilitate In late December, we raised $6.8 million in net proceeds from one investor in registered direct equity offering. We currently have approximately $8.5 million in cash and a very clean capital structure. During the quarter, our subsidiary company, Brightline Interactive, delivered the second phase of its large DOD contract, an achievement of significant performance and technological milestones. BLI entered into an initial contract with the US Navy for an immersive AI-driven simulator system to be delivered in the coming months, setting the ground for potential follow-on contracts in 2025 and beyond. BLI delivered a scalable, immersive solution to a global government service integrator, positioning itself as a leading middleware for processing and visualizing complex information in 3D space and setting what we believe has the potential to become an industry standard. The continuing resolution for 2025 has delayed the potential awarding of multiple government and DOD opportunities. We hope this will be resolved promptly in March 2025 when the current continuing resolution and with a new administration and Congress now in place. Led by our subsidiary Fortel Reality, we continue to make strong progress on commercializing our AI-driven immersive training product and have experienced encouraging initial traction with our customers and partners. We have a strong long-term revenue pipeline and expected contracts, but putting these aside, we already have a reasonable visibility as the reminder of fiscal year 2025, ending in June 30, 2025. Driven by the timing of existing contacts, revenue recognition for Q3 FY25, we expect a decline in revenue and negative adjusted EBITDA to be more than offset by a very strong Q4 FY25 with significant revenue growth, positive adjusted EBITDA, and profitability. For the full fiscal year 25, ending June 30, 2025, We expect aggregate revenue to significantly exceed our FY24 revenue and to be about EBITDA break-even for the full fiscal year versus a significant adjusted EBITDA loss in the prior fiscal year. With that, I will now turn it over to Maidan Rothblum, Gleamson's CFO and COO, to review the financial results.

Maidan? Thanks, Liron. I will limit my portion to a summary review of our financial results Full breakdown is available in our 10-Q and press release that were filed before market opens today. Please note that I'll refer to adjusted EBITDA and other non-GAAP measures. For the calculation of adjusted EBITDA and other non-GAAP measures, please refer to the MD&A section of our 10-Q filing, which you can find on our website under SEC filing. Due to fiscal year 25 revenue of approximately $3.17 million, reflecting A, 52% increase compared to Q2 fiscal year 24, which ended December 31st, 2023, revenue of approximately 2.08 million, and B, a 30% increase compared to Q1 fiscal year 25, that's the quarter that ended September 30th, 2024, revenue of approximately 2.44 million. The increase in both comparative periods was primarily driven and increase in spatial core revenues as well as growth in our other businesses. Gross margin for Q2 fiscal year 25 was approximately 64% compared to 68% for Q2 fiscal year 24. The decrease was driven by revenue mix, which tends to oscillate a bit between the quarters. On average, we expect our going forward gross margins to continue to be in the 60 to 70% range. Q2 fiscal year 25 positive adjusted EBITDA of approximately $0.28 million compared to an adjusted EBITDA loss of approximately negative $1.33 million for Q2 fiscal year 24. Net operating cash provided from operations for Q2 fiscal year 25 was approximately $0.17 million compared to a net operating cash loss of approximately negative $1.68 million for Q2 fiscal year 24. Importantly, as Jeroen mentioned, this is the first profitable EBITDA quarter in the company's history as a publicly traded company, reflecting our significant restructuring efforts over the past few quarters combined with revenue growth. So specifics regarding the visibility Jeroen mentioned. For Q3 fiscal year 25, we expect a decline in revenue to a range of $1.5 to $2 million with a negative adjusted EBITDA to be more than offset by a strong Q4 fiscal year 2025 with expected revenue range of between $3.3 and $4 million and positive adjusted EBITDA. For our fiscal year 2025 ending June 30, 2025, we expect aggregate revenues to exceed $11 million compared to $8.8 million for fiscal year 2024. a 25% plus increase in annual revenue and break even adjusted EBITDA for the fiscal year versus significant adjusted EBITDA loss in the prior fiscal year. Our current cash operating expense base, pre-revenue, is now less than $0.9 million per month. Given our contracted and projected revenue cash in going forward, we expect to generate positive cash flow in each of the remaining quarters for fiscal year 25. The company's cash and equivalent position as of December 31, 2024 was approximately $8.5 million with an additional $1.4 million in accounts receivable. The increase in our cash position was primarily a result of our December 24 registered direct equity financing in which we raised $7.3 million in gross cash proceeds from one investor and a clean structure. We continue to maintain a clean capital structure with no debt, no convertible debt, and no preferred equity. Lastly, on December 24, 2024, we received a written notice from NASDAQ informing the company that it had regained compliance with NASDAQ listings, which requires listing securities to maintain a minimum bid price of $1 per share. This closes the matter that originated on September 3, 2024. I'd now like to pass it back to Liron for some closing remarks, after which we will begin our Q&A session.