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Glimpse Group, Inc. (VRAR)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 FY25 revenue was $1.42M, down 25% year over year due to revenue recognition timing; gross margin improved to 72% and operating cash flow was positive for the second consecutive quarter .
  • Management guided Q4 FY25 revenue to $3.2–$3.8M and profitability, as the final stage of a >$4M DoD Spatial Core contract is delivered and recognized .
  • Full-year FY25 revenue guidance narrowed to $10–$11M (vs. >$11M prior), while gross margin guidance was raised to 65–75% on higher Spatial Core and software license mix .
  • Results modestly missed Wall Street consensus: revenue $1.42M vs $1.50M* and EPS -$0.07 vs -$0.02*; estimates coverage remains very limited (single estimate) and may need recalibration given contract timing and guidance changes. Values retrieved from S&P Global.
  • Near-term stock catalysts: confirmation of additional seven-figure Spatial Core deals, Q4 contract recognition and positive EBITDA, potential use of the $2M buyback plan to defend the stock if warranted .

What Went Well and What Went Wrong

What Went Well

  • Positive operating cash flow for the second consecutive quarter (+$0.13M), reflecting restructuring, cost controls, and high gross margins .
  • Spatial Core momentum: expected completion of >$4M DoD contract; first full-motion immersive simulator delivered to U.S. Navy; new confirmed seven-figure deal pending signature .
  • Management increased gross margin guidance to 65–75% on mix shift to Spatial Core and software licenses; Q3 gross margin measured 72% .
  • Quote: “We delivered our second consecutive quarter of positive cash flow from operations… a direct result of our reorganization and cost control efforts… and our strategic focus on Spatial Core.” — Lyron Bentovim .
  • Quote: “Q4… is expected to be in the $3.2–$3.8M range and profitable as we deliver and recognize the final stage of the large DoD entity’s contract for Spatial Core.” — Maydan Rothblum .

What Went Wrong

  • Revenue declined 25% YoY to $1.42M, driven by revenue recognition timing and lower software license revenue vs prior year .
  • Adjusted EBITDA loss widened sequentially to -$1.04M (from +$0.28M in Q2), reflecting the lower recognized revenue in Q3 .
  • Consensus miss: revenue and EPS below limited Street estimates, highlighting the challenge of forecasting contract-based recognition and sparse coverage. Values retrieved from S&P Global.
  • Government budget delays (Continuing Resolution) pushed out awarding of multiple Government/DoD opportunities, affecting near-term timing .
  • Prior FY25 revenue guidance (> $11M) was reduced to $10–$11M despite strong Q4 outlook .

Financial Results

Core P&L vs Prior Periods

MetricQ1 FY25Q2 FY25Q3 FY25
Revenue ($USD)$2,438,369 $3,168,934 $1,422,235
Gross Profit ($USD)$1,923,066 $2,024,927 $1,020,026
Gross Margin (%)79% 64% 72%
Net Income ($USD)$(1,014,192) $25,872 $(1,502,202)
Basic/Diluted EPS ($)$(0.06) $0.00 $(0.07)
Adjusted EBITDA ($USD)$(0.46)M $0.28M $(1.04)M
Net Operating Cash Flow ($USD)$(425,045) $171,000 $130,000

Segment/Mix

Revenue MixQ1 FY25Q2 FY25Q3 FY25
Software Services ($USD)$2,229,257 $3,129,108 $1,283,287
Software License / SaaS ($USD)$209,112 $39,826 $138,948
Total Revenue ($USD)$2,438,369 $3,168,934 $1,422,235

KPIs and Balance Sheet Highlights

KPIQ1 FY25Q2 FY25Q3 FY25
Cash & Equivalents ($USD)$1,413,794 $8,445,288 $7,058,020
Accounts Receivable ($USD)$871,493 $1,391,879 $652,118
Deferred Revenue / Contract Liabilities ($USD)$447,858 $263,347 $1,047,673
Current Liabilities ($USD)$4,137,316 $4,279,058 $3,497,372
Total Stockholders’ Equity ($USD)$10,891,020 $17,917,948 $16,727,907
DebtNone

Results vs Consensus (S&P Global)

MetricQ3 FY25 ConsensusQ3 FY25 Actual
Revenue ($USD)$1,500,000*$1,422,235
Primary EPS ($)-$0.02*-$0.07

Values retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD)Q4 FY25$3.3–$4.0M $3.2–$3.8M Lowered
Revenue ($USD)FY25>$11M $10–$11M Lowered
Gross Margin (%)Go-forward60–70% 65–75% Raised
Adjusted EBITDAQ4 FY25Positive Profitable EBITDA expected Maintained/clarified
Operating Cash FlowRemainder FY25Positive each quarter (run-rate < $0.9M/month OpEx) Q3 positive achieved; Q4 profitability targeted On track
Capital AllocationOngoingN/APotential use of $2M buyback if warranted New optionality

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q3 FY25)Trend
Spatial Core / DoDQ2: Phase delivered; positioning as middleware; initial U.S. Navy simulator; strong pipeline Expected completion of >$4M DoD contract; confirmation of new seven-figure deal; U.S. Navy simulator delivered Strengthening execution; contract recognition near-term
AI IntegrationQ2: AI across product base; commercial training use cases (Foretell Reality) Continued AI-driven training wins; Spatial Core integrates AI into 3D environments Broadening adoption
Government Budget TimingQ2: Continuing Resolution delays anticipated; hope for March resolution Budget delays persisted, pushing award timing; positioned for follow-on opportunities Timing headwind persists
Profitability / Cash FlowQ2: First positive EBITDA as a public company; positive operating cash; OpEx run-rate < $0.9M/month Q3 positive operating cash; EBITDA negative due to revenue timing; Q4 profitability guided Path to sustained profitability intact
Divestitures / Portfolio FocusQ1: QReal divested; streamlined ops; revenue retention mechanics; strategic review Continued focus on core Spatial Core; exploring monetization and accretive acquisitions (Q2 Q&A) Portfolio simplification continues
Commercial vs Government MixQ2: ~40% government / ~60% commercial; anticipate higher government mix over time Government-led revenue recognition in Q4; enterprise traction highlighted Mix tilting toward government near-term

Management Commentary

  • “Spatial Core is delivering in some most advanced and challenging environments… with tremendous potential to become an enabling technology in the 3D, big data, AI, cloud space.” — Lyron Bentovim .
  • “Q4 FY’25 revenues… $3.2–$3.8M and profitable… as we deliver and recognize the final stage of the large DoD entity’s contract for Spatial Core.” — Maydan Rothblum .
  • “There continues to be a sharp disconnect between our intrinsic value and our current public company valuation… we may seek to utilize our untapped $2 million common share buyback plan…” — Lyron Bentovim .
  • “Gross margin… 72%… we expect going-forward gross margin… 65–75%… due to a larger portion of revenue coming from Spatial Core and software license sales.” — Maydan Rothblum .

Q&A Highlights

  • Q3 FY25 call had minimal/no live Q&A; management reiterated Spatial Core progress, Q4 profitability expectations, and valuation disconnect .
  • Reference Q2 themes as ongoing: revenue mix (40% government / 60% commercial) with potential increase in government exposure; OpEx run-rate stability ($0.9M/month); active exploration of divestitures and accretive acquisitions; AI integration into training and operational scenarios .

Estimates Context

  • Q3 FY25 missed limited consensus: revenue $1.50M* vs actual $1.42M and EPS -$0.02* vs -$0.07, reflecting contract timing and lower recognized software license revenue. Values retrieved from S&P Global.
  • Q4 FY25 consensus $3.60M* revenue vs company guidance $3.2–$3.8M suggests estimates may need to tighten to guidance midpoints; FY25 consensus $10.7M* aligns within updated $10–$11M guidance. Values retrieved from S&P Global.
  • Coverage remains thin (single estimate), increasing error risk around quarter-to-quarter recognition. Values retrieved from S&P Global.

Key Takeaways for Investors

  • Contract timing drove a soft Q3 print but sets up a stronger Q4 with profitability and positive EBITDA as >$4M DoD Spatial Core work is recognized .
  • Mix shift toward Spatial Core and software licenses is structurally lifting gross margin (raised guidance to 65–75%) and supporting cash generation .
  • Updated FY25 revenue guidance ($10–$11M) reflects prudence amid government budget delays; watch for near-term confirmation of additional seven-figure Spatial Core deals .
  • The $2M buyback authorization provides potential support if valuation dislocation persists; monitor management’s deployment stance .
  • With OpEx run-rate discipline and consecutive positive operating cash quarters, the path to sustainable profitability is improving despite quarterly variability .
  • Trading setup: near-term positive catalyst around Q4 results and contract recognition; risk remains tied to government budget timing and award cadence .
  • Medium-term thesis: Spatial Core as enabling infrastructure for AI-driven 3D data environments (military and commercial) can compound through follow-on wins and enterprise adoption .