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]