Financial Performance - Revenues for the year ended December 31, 2024, were 26,350,819,adecreaseof12,440,518 or 32% compared to 38,791,337in2023,primarilyduetodelayedcontractsignings[105].−Grossprofitfor2024was19,412,515, down 8,000,558or2927,413,073 in 2023, with a gross profit margin of 74% in 2024 compared to 71% in 2023 [107]. - Net income for 2024 was 1,363,681,representingadecreaseof7,787,154 or 85% from 9,150,835in2023,largelydrivenbytherevenuedecline[111].−AdjustedEBITDAfor2024was2,926,169, a decrease of 9,447,710or7612,373,879 in 2023 [112]. - Cash and cash equivalents as of December 31, 2024, were 18,040,827,downfrom18,849,842 in 2023 [112]. - Net cash provided by operating activities decreased to 1,257,266in2024from6,682,616 in 2023, primarily due to lower net income [113]. Operating Expenses - Operating expenses increased by 386,676or217,416,184 in 2024, with R&D expenses rising by 208,988or712.2 million for Q4 2024, bringing total bookings for the year to 29.6million[117].−TheCompanyhasabacklogof22 million as of December 31, 2024, which includes 10.6millioninCapital,6.6 million in Service, and 4.8millioninSTEP[118].−ManagementestimatesthatthemajorityofnewbookingsfromQ42024willconverttorevenuein2025,althoughcontracttermsandinstalldatesmaychange[119].−Thereare5.3 million in renewable STEP contract options outstanding, with an expected 95% exercise rate based on current renewal rates [117]. - The Company has strengthened booking qualifications by ensuring STEP contracts are recorded for their full three-year value, adding $1.9 million to bookings [117]. Funding and Financial Strategy - The Company is open to raising additional funds from capital markets to expand production capacity and enhance sales and marketing efforts, but there is no assurance that financing will be available [121]. Regulatory and Economic Environment - The impact of the new federal administration on bookings for 2025 is uncertain, with discussions of budget cuts and frozen federal funding observed [120]. Accounting and Warranty - Revenue recognition is based on ASC 606, with revenue recognized when performance obligations are satisfied [129]. - The Company provides a one-year warranty on products, estimating warranty liabilities based on historical claims data [138]. - The Company employs a conservative approach to bad debt reserves, calculating a percentage of all outstanding accounts receivable [125].
VirTra(VTSI)2025-03-27 20:43