Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $7 million, a 15% increase from $6.1 million in the prior year period, driven by higher capital deliveries and stable recurring revenue [11][12] - Gross profit for Q2 was $4.8 million, representing 69% of total revenue, compared to $5.5 million or 91% in the prior year, reflecting a higher mix of capital sales [12][13] - Net income for Q2 was $200,000 or $0.01 per diluted share, down from $1.2 million or $0.10 per diluted share in the prior year [14] - Cash and cash equivalents totaled $20.7 million as of June 30, up from $17.6 million at the end of Q1 [14] Business Line Data and Key Metrics Changes - Government revenue for Q2 was $5.4 million, slightly up from $5.3 million in the prior year [12] - International revenue for Q2 was $1.4 million, significantly up from $600,000 in the prior year [12] - Bookings for Q2 totaled $4.6 million, up from $3.6 million in 2024 but down from $6.4 million in Q1 2025, attributed to timing of awards and customer deferrals [15] Market Data and Key Metrics Changes - The operating environment is influenced by federal and international funding delays, with agency procurement cycles slower than normal [4][10] - The reopening of the Department of Justice COPS grant program is expected to help unlock funding for agencies later in the year [4] Company Strategy and Development Direction - The company is focused on enhancing customer engagement and operational discipline to position itself well for future growth [3][5] - A redesigned website is expected to launch soon, aimed at improving lead capture and conversion tracking [5] - The company is reentering the GSA procurement channel to streamline contracting for eligible agencies [6] Management's Comments on Operating Environment and Future Outlook - Management remains confident in the strength of their solutions and recurring revenue programs despite ongoing funding delays [3][4] - The company expects improved order activity in the coming quarters as funding flows improve [4][10] - The strong cash position and stable recurring revenue base provide a solid foundation for growth in the second half of 2025 [11][17] Other Important Information - The company has made investments to enhance manufacturing processes and quality control, improving product durability and performance [8][9] - The STEP program has transitioned to three-year agreements, improving revenue visibility and customer relationships [17] Q&A Session Summary Question: Clarification on IVAS involvement - Management confirmed that they remain involved in the IVAS program despite changes with Microsoft and Andro, and they expect to produce at a production level [20][21][22] Question: Impact of US Army selecting Bohemia - Management views the selection of Bohemia positively, as it enhances distribution opportunities for VirTra's products [24][25][26] Question: Customer traction with VXR - Management reported strong interest in the VXR platform across various sectors, particularly in healthcare, emphasizing its portability and immersive training capabilities [28][29][30] Question: Changes in STEP renewal rates - Management noted a consistent 95% renewal rate for STEP programs, with some customers renewing early to access new technology [35][36][37] Question: Geographic trends in bookings - Management indicated that while federal funding has been slow, there are emerging opportunities in grants and international markets [41][45]

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 Q4 2024 was $5.4 million, down from $10.9 million in the prior year period, reflecting federal budget delays and grant distribution pauses [21][22] - Full year 2024 revenue totaled $26.4 million, compared to $38.8 million in 2023, indicating a significant decline due to a constrained booking environment [24][25] - Bookings for Q4 2024 grew to $12.2 million, a 37% sequential increase from Q3 2024, although many orders came late in the quarter [22] - Full year 2024 bookings totaled $29.6 million, down $4.2 million year-over-year, but excluding 2023 design and prototype contracts, bookings for federal services and STEP contracts increased by 24% [23] Business Line Data and Key Metrics Changes - Government revenue for 2024 was $22.9 million, down from $31 million in the prior year, impacted by the funding environment [25] - International revenue for 2024 was $3.1 million, compared to $6.5 million in the prior year, although bookings in the international market increased by 68% [25][26] - Gross profit for Q4 was $3.7 million (69% of total revenue), down from $9.2 million (84% in the prior year), primarily due to lower revenue [26] Market Data and Key Metrics Changes - The company secured contracts with government and law enforcement agencies in Europe and Latin America, expanding its training solutions to 44 countries [11] - The backlog as of December 31, 2024, totaled $22 million, including $10.6 million in capital, $6.6 million in service and warranties, and $4.8 million in STEP contracts [31] Company Strategy and Development Direction - The rollout of the V-XR platform is a strategic priority, with early customer reception being strong [12] - The company is focused on enhancing its sales pipeline and securing funding for law enforcement agencies [8][19] - Investments in manufacturing capabilities and operational infrastructure are aimed at handling large-scale contracts effectively [16] Management's Comments on Operating Environment and Future Outlook - Management noted that the funding environment remains unpredictable but believes that the long-term need for advanced training solutions continues to grow [34] - The company is optimistic about converting backlog into revenue as market conditions stabilize [34] - Management is closely monitoring macroeconomic factors impacting government funding cycles [17] Other Important Information - The company recorded a $750,000 revenue adjustment related to a prior international sale from 2021, affecting reported revenues for 2024 and 2023 [24] - Cash and cash equivalents as of December 31, 2024, were $18 million, down from $18.8 million in December 2023 [31] Q&A Session Summary Question: How long will the current funding softness last? - Management indicated that the funding environment may stabilize in a couple of quarters after the current assessments are completed [40][41] Question: What initiatives are being undertaken to weather the uncertainty? - The company has created a grant program to assist customers in navigating the funding process and has engaged with policymakers to advocate for clearer funding processes [44][45] Question: What is the outlook for the IVAS opportunity following the handoff to Anduril? - Management believes the transition to Anduril is a net positive, as Anduril has a strong history with government contracts and understands the requirements better than Microsoft [48][51] Question: How much of the $22 million in bookings should be recognized in 2025? - Management confirmed that if a booking is recorded, it means funding is secured, and the majority is expected to convert to revenue in 2025 [58] Question: Can you discuss the V-XR pricing and market opportunity? - The price point for V-XR ranges from $35,000 to $100,000, and the company sees significant opportunities in smaller, budget-constrained agencies [71][75]