Earnings call transcript Q2 2023

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Operator

Welcome to The Glimpse Group Fiscal Second Quarter 2023 Financial Results Webinar. At this time, all participants are in 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 https://ir.theglimpsegroup.com.

industry formal on like including a today’s future from results in the that remind those described number begin and those results financial made forward-looking to uncertainties statements call and cause of we risks presentation, subject call. that to I’d everyone regarding may and Before be are could to actual prospects the and materially webcast, differ also associated the to for regulatory to risks for and website company’s would information. of refer Please a more we filings refer industry company’s the list supporting

like to is now The yours. and would Glimpse to Bentovim, of I hand the over CEO floor Lyron call Group. the Lyron, President

Lyron Bentovim

Group’s call for December Thank us. you pleased I fiscal you, for XX, XXXX XXXX. am Glimpse welcome second results financial quarter and Max, quarter you ended investor everyone joining to The thank to

by our was focus and across second achieving towards efficiencies highlighted significant Glimpse’s cost in neutrality fronts, on continued The technological development a year calendar business goal cash momentum XXXX. of drive and we quarter various as

fiscal second quarter XX% of representing million, first million. the compared $X.X generated we to approximately $X XXXX growth approximately quarter revenue revenues XXXX, of For

million, we X.Xx the For of half financial approximately year last year. growth compared period same XXX% record the revenue of XXXX, $X.X to $X.X first for representing or generated million

of strong With and as our sectors, providers seeing customers fully with momentum recent software and Defense are acquisitions large of we significant Department Brightline the Interactive Digital and Sector well integrated, X telcos. infrastructure in as Government

calendar of year to do some to these we expect in materialize, impact While take the longer these contracts see XXXX. of

while flow. a QX to March materially FY FY lower XXXX, XXXX revenues XXXX We cash January to expect net exceed having revenue, QX

remarks, in and will his sufficiently capital clean we Maydan capitalized As structure. later remain detail a have prepared

rationalize reductions XX% to operating on these of voluntary reduce $X.X see the to beyond. the base. efficiencies, These in cash salary representing of and In operational annualized and quarter base the expense approximately include company’s an cost internal XX% effect our expect investments our annual we upcoming million by cuts by cash we basis, improved recent months, approximately reductions XX% executives,

we achieve and reaching a revenue additional are through in neutrality mix flow XXXX will growth needed. we calendar operations committed cost previously, stated year that combined As of cash as from cuts to with our

As a reminder, of expenses operations approximately XX% variable. are our

do any With we the of to utilize we core future. may as current the foreseeable costs complete, of and cash or our not SXD the acquisitions purchase the make acquisitions Brightline part price balance expect integration in

virtual of metaverse. enable technologies, the each blockchain combination real environment users and in computer-generated of AI can A immersive allows The to creation with other and shared space interact time. that a

environment feel used and AI can and can natural preferences, adapt making to and more responsive that behavior to user the create intelligent metaverse lifelike. be virtual

Blockchain for and allowing ownership can trade provide to buy, and secure users infrastructure transparent digital the virtual metaverse, and confidence. and services of transactions goods underlying with the assets within sell

users their can control metaverse, enable governance over greater giving the ownership autonomy and experiences. blockchain Additionally, virtual over and decentralized

immersive and seamless, metaverse the each these with we the decentralized way a digital the interact potential of in to could has combination that The world. create technologies transform other

highlight the a very conversational a with with platform. ChatGPT Over previous with taken giant months, by engage this, the written leap And has to was few AI GPT-X.X. last forward paragraph to easy ability the

a Defense believe e-commerce, Department including many multi-verse with blockchain try-on recently XR augmented future, for software to environment we to launched are key DoD which embedding our applications in In training based several line cases. with we products, reality imperative NFT intelligence NVIDIA our capabilities of potential artificial for with technology e-commerce and integration initiatives, utilizing our working use vision, build

cases Army use and States AUSA Recent roster impressive which and U.S. to Sector multi-domain traction X XXXX we across and Airbus, see experience of growth Association Space have an industries industries, dollar, for the a built examples completed XD Defense, Digital exposition. SXD geographies. United at six-figure continue and debuted global include, across of annual We customers the

engagement the real launch complement virtual create QReal experience paid Sabrina an Sweet immersive a completed fragrance, on experience to world in via a to Carpenter’s Walmart.com Decentraland. Tooth of

quarter, integrated for company. a the During PulpoAR to social Machine AR Learning diagnostics media algorithms ML skins fingernail-based try-on global successfully and perform a

leverages In facial commercial time experiences. Time version enable of Real real Model ML addition, Detection recently a released Landmark virtual recognition its first PulpoAR Face to that

Brightline an demonstration U.S. simulation integrated technological and the tradeshow the training Interactive BLI in for AT&T with largest the collaborated at I/ITSEC conference,

conference, demonstrated and use training major I/ITSEC requirements. currently multi-user, and to hyperscalable solutions use multiple active the with pursuing DoD agencies. will relationships is specific NVIDIA, warfighter simulation at being solutions collaboration BLI, and a agencies cases. allow investigate cases BLI to realistic, discussed The with addressing hyperscale implement in Additionally tailored potential

to company Glimpse Israel, New a Ministry Metaverse Lab. partner Israel of the engagement software of Glimpse subsidiary Foretell become into key a VR utilizing paid platform Reality, for entered Education’s the

In technology of delivered of segments. Immersive AI, learning an learning joined IHG, IP team. development its the In strengthening development addition parallel, the experience in and targeting and of VR inciteVR, utilizing issued learning business our clinical game-based company, the assets, nursing and and XD library significantly inciteVR’s IHG assignment proprietary extensive XX primarily primarily to consisting and U.S. patents, healthcare completed solutions, Group, our subsidiary immersive Health of team

based $XX $XX later Compensation plan, is authorized share $X in in revenues share three of exercise options be price The of company’s targets shall per the company’s of company, issuance week. million XX occur These founders and per to the to upon over the share. stock vesting growth to is of price an incentive between years Committee the Board long-term expected $XXX be will a executive with that stock fixed and of filed significant to this a X-K between million detailed which annual issue four a the and achievement company Directors primarily and from

the invested its additional to believe or further the company demonstrates have belief, confident and plan We a founders directly. this ago shareholders. have incentive funds not company’s since executive pre- seven that and The and commitment single strong post-IPO long-term share years our sold inception

that, I over results. it CFO Rothblum, COO and financial Glimpse’s to will Maydan? turn With to review now the Maydan

Maydan Rothblum

I available results, filed Lyron. other full my limit a and our market review close XX-K and financial Please after in measures. was that is portion adjusted breakdown to press a that to our summary will note refer of Thanks, non-GAAP the EBITDA today. I will release

and section the filings, to which Investor EBITDA website For our on non-GAAP the measures, find our filings. section under can adjusted calculation the XX-Q of on Relations of please other refer MD&A you SEC

compared XXXX the for $X.XX December of ended $X.XX million, an months months million was increase approximately XX%. to XX, approximately three the for revenue Total three ended XXXX, December XX,

$X.X Total increase periods December six the million, to revenue addition million XXX%. for for for companies new XXXX the XX, of reflect was XXXX an compared after XX, ended ended the approximately approximately $X.X several December both of December subsidiary The XX, months six months customers. increase XXXX, and

XX% the carry for by December ended lower to The six approximately to months the was compared decrease six December the approximately XXXX. months three XXXX, which approximately XX% three was XXXX. for profit a XXXX, months XX, months driven ended both margin. and XX, December SXD ended compared was periods approximately addition for for the ended XX% of the BLI Gross XX, Gross for XX% profit December XX,

compared a the December XXXX loss million $X.XX XXXX of for XX, Net positive to was $X.XX million, months absolute three $X.XX ended net the period, of positive comparable million. income an change as in

The a million. consideration. were compared non-cash acquisition ended We in to $X.XX change XX, acquisition a changes six the sustained net net by subsidiaries, the of of fair loss on value million period, for in increase loss offset $X months by of a XXXX, contingent December several expenses comparable approximately from loss as $X.XX million increase the operating of for driven of partially gain XXXX

December million in Net prior decrease cash by expenses, million adjustments, intangible XX, $X.XX the related was offset six BLI the operating used loss and XXXX, This the fair during net stock-based to and period. primarily driven for amortization. $X.XX to revenue continued increased consideration an value ended for increase payable in deferred compared activities in was and a asset six-month acquisition expenses non-cash the accounts acquisition, by period months

XXXX, months months ended loss XXXX, $X.XX of XX, ended XXXX. million XX, for December months $X.XX the December EBITDA a million loss six million XX, for for XX, of three compared three to Adjusted December the $X.XX EBITDA Adjusted $X.XX a XXXX. six loss months the million ended to for ended compared the loss December

integration its $X escrow to including acquisition. which cash ended with cash equivalents, To future in of for relating account decreased has performance held $X.X acquisition half Brightline the XXXX portion SXD of the the payments fiscal been million completed. and recap, first the we the year in Cash cash million approximately balance and to in primarily for quarter potential thereafter,

completed, SXD to price of our we make and As not the do part any the future. with as Lyron acquisitions of foreseeable mentioned, cash in or core expect we potential integration acquisition utilize the balance Brightline purchase current

focused from calendar breakeven towards operations now in XXXX. are operations flow our on continuing We cash and our reaching optimizing progress year

clean balance to no with obligations. debt, continue and preferred outstanding equity sheet no debt We maintain a no convertible

some will I’d after now which begin to it Lyron for like remarks, Q&A closing we back pass our to session.

Lyron Bentovim

Thank Maydan. you,

full operability, entered as and contracts person quarter, VR that business be existing during entities integrations the with we are key achieved While success, to Blockchain contractor. to and Interactive some with positive critical FY in developments global new AI products customers advancement had the into of of into new conversations and future macro software multi environment QX the DoD continue and have overall multiple several many our direct signed XXXX a challenging, goals acquisition, Brightline the our integration including and

as capitalize advance, continues incredible scale we and and opportunities leading market well position. us There remain develop positioned opportunities these a industry are the to to immersive achieved of on having ahead

we is cash are early and grow the a as continue cognizant to development in as in immersive strategic we look of industry XXXX business of goal, that, and to and committed macro flow stages operations reach therefore, neutrality we to business. our our With are trends, technology determined still of the develop its from the

of all in I support and you take will the to turn And I thank interest Operator call Group. the some for now Glimpse to The back your questions.

Operator

Instructions] ROTH. everyone. Now first Please with question Aftahi from proceed. Thank, Darren [Operator our comes

Dillon Heslin

if your on like for neutrality I getting various I Dillon Darren. a of impact built like the how I are at two, out for contracts this year, to I you flow much into potential wanted visibility that you the have a looking how appreciate might time the mean, like the monetization cash is, estimates DoD those. does guess, the bit is those or line talk get But pushed into about your cash? on This quarter little

Lyron Bentovim

cycle, sales assume consideration so the of, though but to kind as those any long of of are surprised, DOD worked not with we look kind that hope at Kind of and very having please are in assume past, into XXXX. assumptions we our these in we achieving conservative we neutrality even be No. we being are cash taking entities in

Dillon Heslin

Got left out of that it. fruit the then the currently operating the terms sales cost expenses? sort any more you on, on either sort can is there fixed of side low-hanging push of take And some rate in you or to on more of run are manage some

Lyron Bentovim

No. Yeah.

our We in marketing. have in look our are in as of side and R&D and investing and adjusting both things, flexibility a main two the on sense costs, in kind at investments obviously cost of basically sales kind I we

marketing take R&D to the eventually kind push of helps And us in. really obviously, of kind opportunities kind and products build market, of sales that those we

So balancing the of neutrality. of investment it’s in net these a goal achieving versus question flow the of kind cash

a So see achieve on this where are goals. we at kind we will and -- to basis, -- on we monthly need sure we of to, make a adjustments we make as our look

Dillon Heslin

the last of provide? just produce hardware can you third necessary in can those out talk how that parties the on little you for exist for a And bit there one that think some me, solutions some about that, Great. front, about of you sort is hardware cases,

Lyron Bentovim

because as our So look at kind we our all utilize of there, partners, of see software they that customers companies hardware kind enables we are them hardware building the of our the out to as solutions.

and forward and traction. work with AR rumor kind with are, those the what where where with ability understand is we have all kind and and they out the HCC and manufacturers like kind to obviously, new are So, side these of of push recently and like leading the going and VR us and they of our PICO more Meta of done Apple push the or generate as to companies of models, software, can to hardware side what of allowing kind utilize customers on come be hardware on forward kind do done totally

Dillon Heslin

I Thank you. will pass on. Great. it

Lyron Bentovim

you. Thank

Operator

questions in are Instructions] There at currently this time. [Operator no queue

further We turn I’d Lyron will over writing any turn Instructions] questions we it [Operator in queue. questions. Okay, to back closing no to have some for remarks. to like

Lyron Bentovim

for you. If look would to any thank growth. we I reach you a each you earnings afternoon. to forward you Thank directly. to progress ongoing joining like us continuing of please We of to have unable our our to answer Thank out every conference one call. great were and your update questions, and and on

Operator

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

The Glimpse Group, Inc. (VRAR) 14 Feb 232023 Q2 Earnings call transcript