The Glimpse Group Q3 2024 Earnings Call Transcript

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May 15, 2024

There are 3 speakers on the call.

Operator

Welcome to the Glynips Group Quarter 3 Fiscal Year 20 24 Financial Results Webinar. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation.

Operator

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.

Speaker 1

Theglimpsegrout.com

Operator

backslash. Before we begin the formal presentation, I'd like to remind everyone that the statements made on today's call and webcast include 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 the company's website for more supporting industry information. I would now like to hand the call over to Liron Santovam, President and CEO of The Glimpse Group. Liran, the floor is yours.

Speaker 1

Thank you, Kat, and thank you, everyone, for joining us. I am pleased to welcome you to The Glynips Group's Q3 fiscal year 2024 financial results investor call for our quarter ended March 31, 2024. During this quarter, we made concrete and tangible strides that validate our strategic transition to focus on providing enterprise scale, spatial computing, cloud and AI driven immersive recurring software solutions or spatial core as we refer to it internally, led by our subsidiary company BrightLine Interactive. We announced today that BrightLine Interactive entered into a $4,000,000 plus 12 month contract with the Department of Defense, DoD entity for a spatial computing ecosystem integrating AI workflows and accelerated compute for a variety of defense use cases. The ecosystem will empower users to combine massive data sets and perform complex calculations to analyze and process spatial data.

Speaker 1

In order to derive insights, make predictions and perform calculations on 1 for 1 digital twins addressing challenges in infrastructure, maintenance, operations, training and simulation. In parallel, we are in the process of securing several additional multimillion dollar spatial core contracts with multiple government, Department of Defense and large enterprise customers. The short term aggregate value of these contracts is in the $8,000,000 to $12,000,000 range. While there is no guarantee that some or all of these will come to fruition, we anticipate that a good portion of these will close before calendar year end 2024 with additional potential in the pipeline for calendar year 2020 5. Each one of these potential contracts has significant growth elements built into them that could lead to significant annual recurring software revenue after the initial engagement.

Speaker 1

We believe that spatial computing represents a transformative leap forward in how enterprises interact with the digital world, seamlessly integrating it with their physical surroundings. For example, this immersive technology enable us to create comprehensive digital tools that not only mirror complex real world environment 1 to 1, but also enhance our ability to interact, analyze and make informed decisions with potentially transformative applications across industries, including industrial, military, public sector, infrastructure, training, simulations, robotics and many others. As discussed previously, we are working closely with some of the largest players in the tech industry such as NVIDIA and Microsoft as well as with some of the leading hardware players in the state. We serve as an essential and innovative middleware, connecting their cloud and AI technologies and services with the needs of enterprises and organizations to facilitate immersive solutions and use cases at large scale. To illustrate, last week, our subsidiary BrightLine Interactive, together with Cesium and NVIDIA, teamed at the Geospatial Intelligence, GeoInt Symposium 2024 to introduce BrightLine SpatialCore, which uses AI workflows for complex computation on top of real life data set, enabling powerful real time massive data driven digital twin and stimulation applications.

Speaker 1

As we discussed in our last call, we expected our strategic transition to result in short term reduction in revenue as we divested and shut down non core operating assets, while we reduced our expenses targeting other non core opportunities. Our other Glimp subsidiary companies, Curio, Sector5 Digital, Fortell Reality and Glimpse Learning continue to generate meaningful enterprise revenues, including recently from Snap, NHL, Galderma, Halliburton and many others and are cash flow neutral to positive from their internal operations. Looking forward, we expect revenues to be generally flat to up in the coming two quarters as we finalize our divestiture plans and then we expect revenues to grow significantly in Q4 calendar year 2024 and continue to grow into 2025 as we start recognizing the revenues from the DoD entity contract we recently signed and the others we expect to follow. As Meidhan will detail in his prepared remarks, given the development I detailed, we are positioned to reach cash flow profitability in the coming months. With that, I will now turn it over to Meydan Rothbloom, Glynx's CFO and COO to review the financial results.

Speaker 1

Meydan?

Speaker 2

Thanks, Liron. I will limit my portion to a summary review of our financial results. A full breakdown is available in our 10 Q and press release that were filed after market close today. Please note that I'll refer to adjusted EBITDA and other non GAAP measures. For calculation of adjusted EBITDA and other non GAAP measures, please refer to the MD and A section of our 10 Q filing, which you can find on our website under SEC filings.

Speaker 2

Revenue for Q3 fiscal year 2024 was approximately $1,900,000 compared to approximately $3,670,000 for Q3 fiscal year 2024, a decrease of approximately 48%. Revenue for the 9 months ended March 31, 2024 was approximately $7,100,000 compared to approximately $10,600,000 for the 9 months ended March 31, 2023, a decrease of 33%. The decrease for both periods reflect our strategic shift to spatial computing, cloud and AI driven immersive software solutions, which has resulted in a turnover in our historical customer base and our divestiture of non strategic assets. Gross margin for Q3 fiscal year 2024 was approximately 70% compared to 67% for Q3 fiscal year 2020 3. We expect our gross margins to continue to remain in the 65% to 75% range.

Speaker 2

As previously discussed, we have made significant reductions in our operating cash expense base as reflected by a 62% reduction in our operating expenses this quarter compared to the same quarter last year. Our operational cash breakeven point is now at approximately $3,000,000 revenue per quarter or $12,000,000 revenue annually. Adjusted EBITDA loss for Q3 fiscal year 2024 was approximately $89,000 compared to an EBITDA loss of approximately $1,130,000 in Q3 fiscal year 2020 3. Theoretically applying Q3 fiscal year 2023 revenue, which we believe is achievable again, would have resulted in a solidly cash flow positive quarter this quarter. Given our current level of revenues and subject to the signing of some of the contracts that Yaron mentioned, we expect to be cash flow positive from our operations commencing in September 2024 and onwards.

Speaker 2

In such a scenario, given our current cash balance, we expect to be self sufficient without needing any external fundings. As of March 31, 2024, the company had cash and cash equivalents of approximately 4,300,000 dollars Company has no outstanding corporate debt or preferred equity obligation. I'd now like to pass it back to Liron for some closing remarks, after which we will begin our Q and A session.

Speaker 1

Thank you, Meydan. Over the last couple of quarters, we have executed on the strategic transition plan we have outlined. This morning, we reaped the first fruit of this execution. Over the coming months, we expect to make additional strong progress on our Special Core initiative and see significant progress, which we hope to publicly share with you. I thank you all for your interest and support of The Dimmes Group.

Speaker 1

And now I'll turn the call back over to the operator to take some questions. Cass?

Operator

At this time, I'd like to turn the call back to management for any closing remarks.

Speaker 1

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

Operator

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

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Earnings Conference Call
The Glimpse Group Q3 2024
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