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Glimpse Group, Inc. (VRAR)·Q1 2026 Earnings Summary

Executive Summary

  • Q1 FY26 revenue was $1.40M, down 43% year over year versus $2.44M in Q1 FY25, reflecting timing of Department of War contracts and U.S. Government budget delays; gross margin was ~72% and adjusted EBITDA loss was $0.92M .
  • Against S&P Global consensus, revenue modestly missed ($1.40M vs $1.50M*) while EPS beat (-$0.05 vs -$0.06*), aided by improved gross margin mix and cost control; estimates based on a single covering analyst* .
  • Management withdrew revenue guidance for the remainder of FY26 amid the active Brightline Interactive IPO/spin process, but reiterated gross margin expectations of 65–75% and noted adjusted EBITDA breakeven at ~$10M annual revenue .
  • Strategic focus centered on BLI’s potential IPO in 1H CY26, initial delivery on a multi‑million SpatialCore DoW contract, and building Foretell AI license traction in higher education and healthcare; sequential revenue volatility expected by quarter .

What Went Well and What Went Wrong

  • What Went Well

    • Initial delivery on a multi‑million annual SpatialCore DoW contract; BLI in advanced discussions on multiple significant DoW opportunities despite shutdown/CR delays .
    • Foretell AI (immersive role‑play simulation) gaining traction with accelerating licenses and renewals in higher education and healthcare; aim to become a fundamental revenue base .
    • Signed mid‑six‑figure aggregate contracts with a global oil services company for 3D brand environments, animation, and corporate presentations .

  • What Went Wrong

    • Revenue fell to $1.40M from $2.44M YoY (-43%) due to timing of government contracts, budget delays, and divestiture of non‑core entities .
    • Adjusted EBITDA loss widened to -$0.92M from -$0.46M YoY on lower revenue in the quarter .
    • Management withdrew revenue guidance for FY26, increasing uncertainty around near‑term visibility while the BLI IPO/spin process advances .

Financial Results

  • Overview (Revenue and EPS across recent periods)
MetricQ1 FY25Q3 FY25Q4 FY25Q1 FY26
Revenue ($USD Millions)$2.438 $1.422 $3.500 $1.399
Diluted EPS ($USD)-$0.06 -$0.07 n/a-$0.05
  • Margins and Profitability
MetricQ1 FY25Q3 FY25Q1 FY26
Gross Profit ($USD Millions)$1.923 $1.020 $1.008
Gross Margin %78.8% ~72% ~72%
Adjusted EBITDA ($USD Millions)-$0.46 -$1.04 -$0.92
  • Balance Sheet and Cash KPIs
MetricQ1 FY25Q3 FY25Q1 FY26
Cash and Equivalents ($USD Millions)$1.414 $7.058 $5.562
Accounts Receivable ($USD Millions)$0.841 $0.652 $0.657
Total Assets ($USD Millions)$15.559 $20.245 $18.350
Total Stockholders’ Equity ($USD Millions)$11.538 $16.728 $16.151
  • Revenue Mix (Q1 FY26 vs Q1 FY25)
Revenue ComponentQ1 FY25Q1 FY26
Software Services ($USD)$2,229,257 $1,247,933
Software License/SaaS ($USD)$209,112 $147,784
Royalty Income ($USD)$0 $2,936
Total Revenue ($USD)$2,438,369 $1,398,653
  • Results vs S&P Global Consensus
MetricConsensus*Actual
Revenue ($USD)$1,500,000*$1,398,653
Primary EPS ($USD)-$0.06*-$0.05
# of Estimates (Revenue)1*—
# of Estimates (EPS)1*—

Values marked with * retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue (FY26)FY26Expected to exceed FY25; quarterly revenue “choppy”; Q1 FY26 expected lower than Q4 FY25 Revenue guidance withdrawn for remainder of FY26 Lowered (withdrawn)
Gross Margin %Ongoing65–75% range 65–75% range reiterated Maintained
Adj. EBITDA Breakeven ThresholdOngoingNot specifiedBreakeven at ~$10M annual revenue (equivalent to FY25) New explicit threshold
Capital StructureOngoingNo debt, no convertibles, no preferred No debt, no convertibles, no preferred; as of Oct 2025, no contingent liabilities Improved (contingent liabilities removed)
BLI IPO/Spin TimelineCY26Board approved to pursue spin; expected in coming months IPO/spin process initiated Oct 2025; potential IPO 1H CY26 Clarified timeline

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 & Q4 FY25)Current Period (Q1 FY26)Trend
Brightline Interactive (BLI) / SpatialCore DoW ContractsDelivered $4M+ unified synthetic training ecosystem; new $2M+ contract; Navy simulator; CRADA with Army C5ISR; pipeline in DoD and enterprise Initial delivery on multi‑million annual SpatialCore contract; advanced DoW discussions; IPO/spin process formally initiated Execution milestones and corporate separation progressing
Foretell AI TractionMultiple AI‑driven immersive training contracts; healthcare/education licenses Accelerating licenses and renewals in higher education and healthcare; aim to be core revenue base Building commercialization momentum
Macro/Government Budget & CRFY26 expected “choppy” quarterly revenue; CR/budget delay impacting awards Government shutdown/CR affected timing; revenues choppy; withdrew revenue guidance Ongoing timing risk; reduced guidance visibility
Gross Margin Profile65–75% expected due to mix shift ~72% in Q1; 65–75% range reiterated Stable high‑margin mix
Value Unlock / Corporate ActionsBoard approval to spin out BLI to realize value IPO/spin initiated; Lucid Capital Markets engaged; shareholders to receive BLI distribution if successful Formal process underway

Management Commentary

  • “Brightline made an initial successful delivery on a multi‑million dollar annual SpatialCore contract with a Department of War entity... While these discussions have been impacted by the government shutdown and continuing resolution, we still expect these to materialize into contracts during calendar year 2026.”
  • “Our AI software license product, Foretell AI... has been gaining traction in both the education and healthcare segments... the accelerating pace of new licenses and annual license renewal is encouraging.”
  • “We will not be providing revenue guidance for the remainder of our fiscal year ending on June 30, 2026.”
  • “Our immediate strategic focus is driving a potential IPO/Spinoff of BLI... with a potential BLI IPO in the first half of calendar year 2026.”
  • “Adjusted EBITDA loss for Q1 fiscal year 2026 was $0.92 million... The company is currently operating at an adjusted EBITDA break-even level at approximately $10 million of annual revenue.”

Q&A Highlights

  • Q1 FY26 call had no phone or webcast questions; management reiterated focus on BLI IPO/spin and Foretell AI traction .
  • From the prior quarter: timeline guidance suggested Brightline spin could occur “early in 2026” if plans proceed; management expects to operate within existing cash and is exploring partnerships for AI solutions with industry players to scale distribution .

Estimates Context

  • Revenue modest miss vs consensus: $1.40M actual vs $1.50M estimate*; EPS beat: -$0.05 actual vs -$0.06 estimate*, driven by cost discipline and gross margin maintenance around 72% .
  • With guidance withdrawn and only one estimating analyst*, near‑term estimate dispersion could widen; FY26 quarterly cadence likely volatile given DoW timing and budget backdrop* .

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • BLI IPO/spin is the central 1H CY26 catalyst, with initial SpatialCore deliveries and a robust DoW pipeline underpinning structural value creation potential .
  • Core P&L showed resilience on margins (~72%) despite revenue timing headwinds; EPS was better than consensus (-$0.05 vs -$0.06*) .
  • Guidance withdrawal increases near‑term uncertainty; trading likely to be headline‑driven by contract awards and IPO process milestones .
  • Foretell AI traction in higher education and healthcare provides a second growth vector with recurring license potential .
  • Balance sheet remains clean (no debt, ~$5.56M cash, ~$0.66M AR), providing operational flexibility through the spin process .
  • Watch for quarter‑to‑quarter revenue volatility related to government contracting dynamics and budget resolutions; margin range maintained at 65–75% .
  • Medium‑term thesis: post‑spin, investors may own a pure‑play defense/AI middleware asset (BLI) plus Glimpse with AI‑driven immersive licenses, potentially improving valuation transparency .