The Glimpse Group, Inc.

Welcome to the Glimpse Group's third 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 investor section of the company's website at httpsir.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 Laurent Bentevin, President and CEO of The Glimpse Group. Laurent, the floor is yours.

Thank you, Kelly, and thank you, everyone, for joining us. I'm pleased to welcome you to The Glimpse Group's Q3 Fiscal Year 2025 financial results investor call. Our quarter ended March 31st, 2025. In this quarter, we continue the strong momentum of the previous quarter. Our outlook for revenue is strong, led by special course traction with various DOD entities and increasingly with opportunities in the enterprise segment as well. This momentum is expected to be reflected in our upcoming quarter, which may be the highest revenue quarter for us over the past two fiscal years. In parallel, we delivered our second consecutive quarter of positive cash flow from operations, a major achievement and a direct result of our reorganization and cost control efforts over the past several quarters, as well as our strategic focus on Spatial Core. As a reminder, Spatial Core, led by our subsidiary company Brightline Interactive, is an operating system for spatial computing, integrating data and AI into 3D environments, enabling cloud compute, and creation of complex simulations while providing insights and valuable information that is presented in 3D form and based on real source of truth data. This has transformative applications in robotics, drones, and digital twins, to name a few. In essence, it supercharges big data. This is not as theoretical at this stage. Special Core is delivering in some of the most advanced and challenging environments. with tremendous potential to become an enabling technology in the 3D big data AI cloud space. Recent special core developments include Brightline is expected to deliver its four plus million dollars DOD contract this month, which would represent a fundamental achievement. During the quarter, Brightline successfully delivered to the U.S. Navy its first full motion immersive simulator system. This milestone marks a significant achievement in adoption of immersive technologies to enhance the capabilities, effectiveness, and safety of the U.S. military service, setting the ground for potential phone-on contracts. Last week, we received official confirmation for a new seven-figure special core deal, which we expect will be signed in the coming weeks. The U.S. government's continuing resolution and the lack of a federal budget for 2025 has delayed the potential awarding of multiple government and DOD opportunities. However, we continue to be well-positioned for multiple opportunities and expect to confirm a few additional seven-figure Special Core opportunities in the coming months. While Special Core is our strongest growth driver, our other immersive companies are also performing well in their segments. Fortel Reality entered into several contracts for its AI-driven immersive training product. Sector 5 Digital entered into full-on agreements with Halliburton, Ecolab, Dalderma, Walmart, and AT&T. Glimpse Learning's SNAP revenues grew significantly from the prior quarter and is tracking well. Glimpse Learning entered into multiple software license contracts in the healthcare and educational segments. However, despite all this strong traction in special course AI and cloud-driven revenues, a deep pipeline of revenues across our businesses, are positioned in the immersive industry, Tier 1 customer base, positive cash flow, and solid cash balance and clean balance sheet. There continues to be a sharp disconnect between our intrinsic value and our current public company valuation, both standalone and versus our public and private comps. As such, we may seek to utilize our untapped $2 million common share buyback plan in order to protect our stock if circumstances warrant its utilization. With that, I will now turn it over to Meydan Rothblum, Blum's CFO and COO, to review the financial results.

Meydan? Thanks, Liron.

I will limit my portion to a summary review of our financial results. A full breakdown is available in our 10Q and press release that will file before market open today. Please note that I'll refer to non-GAAP measures, for the calculation of which, please refer to the MD&E section of our 10Q filing. Q3 fiscal year 25 revenue of approximately $1.4 million, a 25% decrease compared to Q3 fiscal year 25, and the March 31, 2024 revenue of approximately $1.9 million. This expected and previously discussed decrease was primarily driven by revenue recognition timing. Q4 fiscal year 25 revenues, ending June 30, 2025, is expected to be in the $3.2 to $3.8 million range and profitable as we deliver and recognize the final stage of the large Department of Defense entities contract for State of Corps. Revenue for the nine months ended March 31, 2025 was approximately $7 million, essentially flat compared to the same nine-month period last year, despite divesting and consolidating multiple subsidiary companies. For fiscal year 25, ending June 30, 2025, we expect revenues in the $10 million to $11 million range, a 15% to 25% increase from fiscal year 25, again, despite divesting and consolidating multiple subsidiary companies during this fiscal year. Gross margin for Q3 fiscal year 25 was approximately 72% compared to 70% for Q3 fiscal year 24. We expect our going forward gross margin to be in the 65 to 75% range, an increase from our previous guidance due to a larger portion of revenue coming from spatial core and software license sales. Net operating cash provided for operations in Q3 fiscal year 25 was a positive cash gain of approximately $0.13 million compared to a net operating cash loss of approximately negative $0.92 million for Q3 fiscal year 24. This is our second consecutive positive quarter. Net operating cash loss from operations in the nine-month period fiscal year 25 was approximately negative 0.13 million compared to approximately negative 4.3 million for the same nine-month period last year, despite having a similar level of revenue for the period. This turnaround reflects our significant reorganization efforts, cost reductions, and maintenance of high gross margins. Fiscal year 23 Q3 fiscal year 25 adjusted EBITDA loss of approximately $1 million compared to an adjusted EBITDA loss of negative $0.9 million for Q3 fiscal year 24, primarily driven by lower recognized revenue this quarter. However, we expect the upcoming quarter's Q4 fiscal year 25 EBITDA to be positive due to higher expected revenues. For the nine month period ending March 31st, 2025, adjusted EBITDA loss of approximately 1.2 million compared to an adjusted EBITDA loss of approximately 3.5 million for the same period last year. Which means that for fiscal year 25 in total, we will likely have a slightly negative EBITDA compared to an EBITDA loss of negative 4.6 in fiscal year 24, a marked improvement. The company's cash and equivalent position as March 31st, 2025 was approximately $7 million with an additional $0.65 million in accounts receivable. We continue to maintain a clean capital structure with no debt, no convertible debt, and no preferred equity. I'd like to pass it back to Lerone for some closing remarks, after which we will begin our Q&A session.

Thank you, Redan. This was an impactful quarter.

While Spatial Core has made impressive progress, I believe that it is only at the precipice of what it can become. But like all good things, this requires patience. As a company with a solid balance sheet, profitable operations, and several growth vectors, we are well positioned to capitalize on the immersive opportunities in front of us. I thank you all for the interest and support of the Glooms Group, and now I'll turn the call back over to the operators to take some questions.

Thank you, Laurent. If you'd like to submit a question, you can either type it in the chat box below or raise your hand. We'll start with any audio questions and follow that with some write-in questions as time allows. To ask questions from the phone lines, please press star 1 at this time. If using a speakerphone, please pick up your handset for optimum sound quality. Please hold just a moment while we pull for any questions from the phone lines. I am not showing any questions from the phone lines at this moment. We'll turn into some writing questions if available. Laurent?

There does not seem to be any questions out there, so I thank everyone for joining our conference call. We look forward to continuing to update you on our ongoing progress and growth. If you are unable to answer any of your questions, please reach out to us directly. Thank you.

Thank you, everyone. This does conclude today's webinar. Thank you for your participation and have a wonderful day.