Market Overview - The U.S. stock market is expected to experience volatility due to rising tensions between Israel and Iran, which have led to increased oil prices and concerns about a broader regional conflict [1] - Uncertainty surrounding the Federal Reserve's interest rate decisions amid these geopolitical risks is adding further pressure to the market [1] Investment Strategy - A curated portfolio of low-beta stocks is recommended as a strategy to navigate the uncertain market conditions [2] - Low-beta stocks such as VirTra Inc. (VTSI), Franco-Nevada Corporation (FNV), Elbit Systems Ltd (ESLT), and Philip Morris International Inc. (PM) are highlighted as potential investment opportunities [2] Stock Characteristics - Beta is a measure of a stock's volatility compared to the market, with a beta of 1 indicating movement in line with the market, greater than 1 indicating higher volatility, and less than 1 indicating lower volatility [3][4] - Stocks with a beta between 0 and 0.6 are screened for lower volatility, alongside other criteria such as positive price movement over the last month, average trading volume greater than 50,000, a price of at least $5, and a Zacks Rank of 1 (Strong Buy) [5][6] Company Insights - **VirTra Inc. (VTSI)**: The company is benefiting from the U.S. Army's Integrated Visual Augmentation System (IVAS) project, which enhances training for soldiers and positions VirTra favorably for military contracts [7][9] - **Franco-Nevada Corporation (FNV)**: Recently invested $1.05 billion in a royalty on the Côté Gold Mine, which is expected to close by Q2 2025, indicating strong revenue potential from significant gold resources [9][10] - **Elbit Systems Ltd (ESLT)**: The company has a substantial backlog of $23.1 billion, with 66% of its contracts coming from international markets, reflecting strong global demand for defense solutions [9][11] - **Philip Morris International Inc. (PM)**: Transitioning from traditional cigarettes to smoke-free products like IQOS and ZYN, while focusing on shareholder returns and cost-cutting measures [12]

Technical Analysis - VirTra, Inc. (VTSI) has reached a key level of support and recently crossed above the 200-day moving average, indicating a long-term bullish trend [1] - The 200-day simple moving average serves as a support or resistance level, helping traders and analysts determine overall long-term market trends [1] Performance Metrics - VTSI has rallied 36.7% over the past four weeks, suggesting potential for further upward movement [2] - The company currently holds a Zacks Rank 1 (Strong Buy), indicating strong investor interest [2] Earnings Estimates - Positive earnings estimate revisions support the bullish case for VTSI, with no estimates decreasing in the past two months and one estimate increasing [2] - The consensus estimate for VTSI has also increased, further solidifying the positive outlook [2] Investment Consideration - Investors are encouraged to consider adding VTSI to their watchlist due to the significant technical indicators and positive earnings revisions [3]

Core Viewpoint - VirTra (VTSI) is positioned as a strong investment option within the Zacks Electronics Military industry due to its military simulation training programs and extensive market reach, contributing to the company's overall expansion [1] Growth Forecast & Surprise History - The Zacks Consensus Estimate for VTSI's 2025 earnings per share (EPS) has risen by 58.8% to 27 cents over the past 30 days [2] - The total revenue estimate for VTSI in 2025 is projected at $29.2 million, reflecting a year-over-year growth of 7.9% [2] - VTSI has consistently exceeded earnings expectations in the last four quarters, achieving an average earnings surprise of 198.93% [2][8] Debt Profile - VirTra's total debt to capital ratio stands at 13.77%, which is better than the industry average of 14.13% [3] Liquidity - VTSI's current ratio at the end of Q1 2025 was 4.54, significantly higher than the sector average of 1.14, indicating strong capability to meet short-term liabilities [4] Market Reach and Backlog - VirTra provides innovative combat training technologies that prepare military personnel for real-life scenarios, enhancing their safety and effectiveness [5] - The company operates globally, with products deployed in hundreds of agencies across 40 nations, indicating robust demand for its offerings [6] - As of March 31, 2025, VTSI has a stable backlog of $21.2 million, suggesting solid sales growth prospects [6][8] Stock Price Performance - Over the past month, VTSI shares have increased by 31.5%, outperforming the sector's average return of 8.5% [7]

Financial Performance - VirTra, Inc. reported quarterly earnings of $0.11 per share, exceeding the Zacks Consensus Estimate of $0.01 per share, and matching the earnings from the same quarter last year [1] - The company achieved revenues of $7.16 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 8.32%, although this represents a decline from year-ago revenues of $8.09 million [2] - Over the last four quarters, VirTra has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Stock Performance - VirTra shares have declined approximately 33.3% since the beginning of the year, in contrast to the S&P 500's decline of 3.8% [3] - The current Zacks Rank for VirTra is 5 (Strong Sell), indicating expectations of underperformance in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.03 on revenues of $6.99 million, and for the current fiscal year, it is $0.17 on revenues of $29.25 million [7] - The trend for estimate revisions ahead of the earnings release was unfavorable, which may impact future stock performance [6] Industry Context - The Electronics - Military industry, to which VirTra belongs, is currently ranked in the bottom 1% of over 250 Zacks industries, suggesting a challenging environment for the company [8]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $7,200,000, a 3% decrease from $7,300,000 in the prior year due to delayed deliveries [25][26] - Gross profit improved to $5,200,000, representing 73% of total revenue compared to 64% in the prior year, reflecting a 25% decrease in cost of sales [26] - Operating income increased 110% to $1,400,000 compared to $650,000 in the prior year [27] - Net income for the quarter was $1,300,000 or $0.11 per diluted share, a 170% increase from $470,000 or $0.04 per diluted share in Q1 2024 [27] - Adjusted EBITDA increased 22% to $1,700,000 compared to $1,400,000 in the prior year [27] - Cash and cash equivalents totaled $17,600,000 as of March 31, down from $18,000,000 at year-end [27] Business Line Data and Key Metrics Changes - Government revenue for Q1 was $5,200,000, down from $6,700,000 in the prior year, while international revenue increased to $1,900,000 from $550,000 [25][26] - Bookings for the quarter totaled $6,400,000, more than double the $2,900,000 reported in Q1 2024 [28] - Backlog as of March 31, 2025, stood at $21,200,000, segmented into $9,900,000 in capital, $5,800,000 in service, and $5,500,000 in STEP contracts [29] Market Data and Key Metrics Changes - The company noted that sales cycles are taking longer due to funding being held back during internal reviews and leadership transitions [6] - Interest in flexible purchasing pathways, including subscription-based models, is increasing among agencies [7] Company Strategy and Development Direction - The company is focusing on operational execution and adapting to economic uncertainties while reinforcing its role as a trusted training partner [5] - Strategic actions include early coordination with agencies during budgeting processes and aligning offerings with agency needs [9] - The company is enhancing its marketing function and digital strategy to improve lead capture and engagement [12][14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing macro headwinds affecting customer decisions but emphasized the importance of training mandates [5][6] - The company is confident in its ability to convert backlog into revenue and support scalable growth despite funding constraints [24][30] Other Important Information - The VXR extended reality platform is generating interest, with two units sold and more in discussions [15][16] - The company is expanding its certified training content, now offering over 120 hours of certified courses [19] Q&A Session Summary Question: Did macro dynamics contribute to any orders being pulled into Q1? - Management indicated that it was unclear if macro dynamics influenced order timing, noting that some agencies were trying to spend budgeted funds before potential shutdowns [34][35] Question: Is there demand for VXR from other market verticals? - Management confirmed that grant activity is driving demand for VXR, with interest from adjacent markets like healthcare and private security [36] Question: Are customers being forced into three-year agreements for the STEP program? - Management clarified that while customers are encouraged to move to three-year agreements, it is not strictly enforced, but it is a tactic to advance the sales cycle [38][39][41]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $7,200,000, a 3% decrease from $7,300,000 in the prior year period, primarily due to delayed deliveries on several customer orders [25] - Gross profit improved to $5,200,000, representing 73% of total revenue, compared to $4,700,000 or 64% in the prior year period, reflecting a 25% decrease in cost of sales [26] - Operating income increased 110% to $1,400,000 compared to $650,000 in the prior year period, while net income rose 170% to $1,300,000 or $0.11 per diluted share [27] - Bookings for the quarter totaled $6,400,000, more than double the $2,900,000 reported in Q1 2024, contributing to $33,400,000 in total bookings over the trailing twelve months [28] Business Line Data and Key Metrics Changes - Government revenue for Q1 was $5,200,000, down from $6,700,000 in the prior year, while international revenue increased to $1,900,000 from $550,000 [25] - Backlog as of March 31, 2025, stood at $21,200,000, including $9,900,000 in capital, $5,800,000 in service, and $5,500,000 in STEP contracts [29] Market Data and Key Metrics Changes - The company is experiencing longer sales cycles and funding delays due to economic uncertainty and shifting agency priorities, but training mandates remain urgent [6][7] - Interest in flexible purchasing pathways, including subscription-based models, is increasing among agencies [7] Company Strategy and Development Direction - The company is focusing on operational execution, sales efficiency, and operational scalability to strengthen its market position [4][5] - A transition to a regional sales model with new leadership aims to improve accountability and responsiveness across key territories [11] - The introduction of standardized product bundles and entry into the GSA procurement channel is expected to streamline quoting and speed up fulfillment [12] Management's Comments on Operating Environment and Future Outlook - Management acknowledges ongoing macro headwinds affecting customer decisions but remains confident in the company's ability to adapt and deliver solutions [5][23] - The company is well-positioned to take advantage of changes in the Department of Defense's acquisition priorities, which emphasize speed and modernization [22][23] Other Important Information - The VXR extended reality platform is generating interest, with two units sold and more in discussions, reflecting the company's long-term strategy in immersive training [15][16] - The company has expanded its certified training content to over 120 hours, enhancing its training offerings for law enforcement and military partners [19] Q&A Session Summary Question: Did macro dynamics contribute to any orders being pulled into Q1? - Management indicated that there were funds in budgets that agencies were trying to spend before potential shutdowns, but the situation varies by agency [33][34] Question: Is there demand for VXR from other market verticals? - Management confirmed that grant activity is driving demand for VXR, with interest from adjacent markets like healthcare and private security [35] Question: Are customers being forced into three-year agreements for the STEP program? - Management clarified that while customers are encouraged to move to three-year agreements, options remain available for longer terms if needed [37][40]

Financial Performance - Net income for Q1 2025 increased to $1.3 million, up from $0.5 million in Q1 2024, representing a 170% increase[11] - Total revenue for Q1 2025 was $7.2 million, a slight decrease of 3% from $7.3 million in the prior year period[8] - Bookings for Q1 2025 reached $6.4 million, a significant increase of 120% year-over-year from $2.9 million in Q1 2024[5] - Gross profit improved to $5.2 million, reflecting a gross margin of 72.6%, compared to $4.7 million and 64.2% in the prior year[9] - Adjusted EBITDA for Q1 2025 was $1.7 million, a 22% increase from $1.4 million in Q1 2024[12] - Operating income more than doubled to $1.4 million in Q1 2025, compared to $0.7 million in the prior year[11] - Total revenue for Q1 2025 was $7,160,247, a decrease of 2.5% compared to $7,346,421 in Q1 2024[24] - Gross profit increased to $5,196,880 in Q1 2025, up 10.2% from $4,714,164 in Q1 2024[24] - Net income for Q1 2025 was $1,264,060, representing a significant increase of 169.5% compared to $468,196 in Q1 2024[24] - Operating expenses decreased to $3,829,077 in Q1 2025, down 5.8% from $4,063,802 in Q1 2024[24] Cash and Assets - Cash and cash equivalents at the end of Q1 2025 were $17,612,626, a decrease from $18,040,827 at the end of Q4 2024[26] - Total assets increased to $66,797,122 as of March 31, 2025, compared to $65,453,086 as of December 31, 2024[22] - Total liabilities remained relatively stable at $19,812,659 in Q1 2025, compared to $19,762,198 in Q4 2024[22] - The company reported a net cash provided by operating activities of $65,691 in Q1 2025, a decrease from $5,136,509 in Q1 2024[26] Research and Development - Research and development expenses were $609,127 in Q1 2025, down from $693,380 in Q1 2024[24] - Development work under the U.S. Army's IVAS program advanced, including expanded recoil kit validation and reliability testing[5] Backlog and Working Capital - Backlog as of March 31, 2025, totaled $21.2 million, including $9.9 million in Capital, $5.8 million in Service, and $5.5 million in STEP contracts[5] - The company maintained robust working capital of $35.3 million, positioning it for sustained growth[5] Strategic Initiatives - The company reentered the GSA procurement program with bundled offerings to streamline purchases for federal and municipal buyers[6] Share Information - The weighted average shares outstanding for basic shares increased to 11,162,037 in Q1 2025 from 10,959,298 in Q1 2024[24]

Financial Performance - Net sales for the three months ended March 31, 2025, were $7,160,247, a decrease of $186,174 or 3% compared to $7,346,421 for the same period in 2024[79] - Cost of sales decreased by $668,890 or 25% to $1,963,367 for the three months ended March 31, 2025, compared to $2,632,257 for the same period in 2024[80] - Gross profit increased by $482,716 or 10% to $5,196,880 for the three months ended March 31, 2025, with a gross profit margin of 73% compared to 64% in 2024[81] - Operating income for the three months ended March 31, 2025, was $1,367,803, an increase of $717,441 or 110% compared to $650,362 for the same period in 2024[84] - Net income for the three months ended March 31, 2025, was $1,264,060, an increase of $795,864 or 170% compared to a restated net income of $468,196 for the same period in 2024[87] - Adjusted EBITDA for the three months ended March 31, 2025, was $1,703,313, an increase of $304,665 or 22% compared to $1,398,648 for the same period in 2024[87] Cash Flow and Working Capital - The company had cash and cash equivalents of $17,612,626 as of March 31, 2025, compared to $18,040,827 as of December 31, 2024[88] - Working capital increased to $35,257,860 as of March 31, 2025, from $34,826,680 as of December 31, 2024[88] - Net cash provided by operating activities was $65,691 for Q1 2025, a significant decrease from $5,136,509 in Q1 2024[89] - Net cash used in investing activities decreased to $428,371 in Q1 2025 from $1,546,772 in Q1 2024[90] Market and Product Development - The company plans to expand its product offerings and market share by entering complementary markets such as hospitals and private security[77] - The V-300™ simulator features a 300-degree immersive training environment and supports 15 individual firing lanes, enhancing decision-making simulation and tactical firearms training[77] Bookings and Backlog - Bookings totaled $6.4 million for Q1 2025, with an estimated $5 million in renewable STEP contract options still outstanding[91] - The backlog as of March 31, 2025, was $21.2 million, including $9.9 million in Capital, $5.8 million in Service, and $5.5 million in STEP[92] - Management estimates that most new capital bookings in Q1 2025 will convert to revenue within the same year[93] Future Outlook and Funding - The company is open to raising additional funds from capital markets to expand production capacity and enhance marketing efforts[95] - There is uncertainty regarding the impact of the new federal administration on bookings for the remainder of 2025, with budget cuts and frozen grants discussed[94] - The company has no off-balance sheet arrangements that could materially affect its financial condition as of March 31, 2025[98]

Core Insights - VirTra, Inc. reported a net income of $1.3 million for Q1 2025, a significant increase from $0.5 million in Q1 2024, reflecting improved operational execution and cost management [4][13][15] - Bookings for the first quarter rose 120% year-over-year to $6.4 million, contributing to a total of $33.4 million in bookings over the last twelve months, despite challenges in federal funding [8][10] Financial Performance - Total revenue for Q1 2025 was $7.2 million, a slight decrease of 3% from $7.3 million in Q1 2024, primarily due to delayed deliveries [10] - Gross profit increased to $5.2 million, representing a 10% rise from $4.7 million in the prior year, with gross margin improving to 72.6% from 64.2% [11][12] - Adjusted EBITDA for Q1 2025 was $1.7 million, up 22% from $1.4 million in Q1 2024, indicating strong operational efficiency [13][20] Operational Highlights - The company maintained a backlog of $21.2 million as of March 31, 2025, with $9.9 million in Capital, $5.8 million in Service, and $5.5 million in STEP contracts [8] - Development efforts related to the U.S. Army's IVAS program advanced, including recoil kit validation and reliability testing, preparing for a potential production phase [7][8] - The company reentered the General Services Administration procurement program, enhancing sales and marketing functions to engage priority agencies more effectively [8][9] Cash Position - Cash and cash equivalents stood at $17.6 million as of March 31, 2025, with working capital growing to $35.3 million, positioning the company for sustained growth [14][16]

Core Viewpoint - VirTra, Inc. will hold a conference call on May 12, 2025, to discuss its financial results for Q1 2024, indicating a focus on transparency and communication with investors [1]. Company Overview - VirTra, Inc. is a global provider of judgmental use of force training simulators and firearms training simulators for law enforcement, military, educational, and commercial markets [3]. - The company utilizes patented technologies and software to deliver training that simulates real-world situations, focusing on de-escalation, judgmental use-of-force, and marksmanship [3]. - VirTra's mission is to enhance lives globally through effective virtual reality and simulator technology [3]. Conference Call Details - The conference call is scheduled for May 12, 2025, at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) [2]. - Participants can join via U.S. dial-in at 1-877-407-9208 or international dial-in at 1-201-493-6784, with a Conference ID of 13753538 [2]. - A live broadcast of the call will be available, and a replay will be accessible after 7:30 p.m. Eastern time on the same day until May 26, 2025 [3].