VirTra Inc (VTSI) Q4 2024 Earnings Call Highlights: Navigating Challenges with Strategic Growth ...

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Fri, Mar 28, 2025, 1:03 AM 4 min read

Q4 Revenue: $5.4 million, down from $10.9 million in the prior year period.
Full Year 2024 Revenue: $26.4 million, compared to $38.8 million in 2023.
Q4 Bookings: $12.2 million, a 37% sequential increase from Q3 2024.
Full Year 2024 Bookings: $29.6 million, a decline of $4.2 million year-over-year.
Q4 Gross Profit: $3.7 million or 69% of total revenue.
Full Year 2024 Gross Profit: $19.4 million or 74% of total revenue.
Q4 Net Operating Expense: $4.2 million, a 13% increase from the prior year period.
Full Year 2024 Net Operating Expense: $17.4 million, compared to $17 million in 2023.
Q4 Net Loss: $0.9 million or negative $0.08 per diluted share.
Full Year 2024 Net Income: $1.4 million or $0.12 per diluted share.
Full Year 2024 Adjusted EBITDA: $2.9 million, compared to $12.4 million in 2023.
Cash and Cash Equivalents: $18 million as of December 31, 2024.
Backlog as of December 31, 2024: $22 million.

Warning! GuruFocus has detected 5 Warning Signs with VTSI.

Release Date: March 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

VirTra Inc (NASDAQ:VTSI) achieved sequential bookings growth in every quarter of 2024, indicating a strong recovery in demand and sales execution.
The company closed the year with a $22 million backlog, positioning it well for revenue conversion as market conditions stabilize.
VirTra Inc (NASDAQ:VTSI) secured international contracts, expanding its presence in Europe and Latin America, and recorded its first V-XR platform sale in Canada.
The company has significantly expanded its scenario catalog and leveraged AI efficiencies to accelerate content production, enhancing its leadership in immersive training.
VirTra Inc (NASDAQ:VTSI) completed the final development phase for the US Army's Integrated Visual Augmentation System (IVAS) program ahead of schedule, marking a significant milestone.

Negative Points

Total revenue for the fourth quarter was $5.4 million, a significant decrease from $10.9 million in the prior year period, due to federal budget delays and grant distribution pauses.
For the full year 2024, revenue was $26.4 million compared to $38.8 million in 2023, reflecting a challenging funding environment.
Net operating expense for the fourth quarter increased by 13% from the prior year period, driven by investments in personnel and expanded sales and marketing efforts.
The company reported a net loss of $0.9 million for the fourth quarter, compared to net income of $3.5 million in the same period of 2023.
Federal grant disbursement delays have impacted near-term order conversion timing, creating uncertainty in revenue recognition.

Q & A Highlights

Q: Given the challenging funding environment, how long do you expect this softness to last? A: John Givens, CEO: We've been through these cycles before. The current environment is due to election-related uncertainties and frozen funding distributions. I anticipate that after a couple more quarters of assessments, the funding environment will stabilize and potentially improve for VirTra and similar companies.

Q: What initiatives are you undertaking to navigate the current funding uncertainty? A: John Givens, CEO: Our sales team is actively assisting departments in navigating federal funding and grants. We've created a grant program to guide customers to appropriate funding sources. Additionally, I've met with policymakers to advocate for clearer funding processes, ensuring grants are structured to meet our customer needs.

Q: Regarding the IVAS opportunity, how does the transition from Microsoft to Anduril impact VirTra? A: John Givens, CEO: The transition is positive for us. Anduril has extensive experience with government contracts, unlike Microsoft's commercial electronics model. Our product's strong performance has been recognized, and Anduril's involvement is expected to enhance contract management and execution.

Q: Can you clarify if bookings have a secured funding source and how much of the $22 million backlog will be recognized in 2025? A: Alanna Boudreau, CFO: If we record it as a booking, the funding is secured. We expect the majority of the $22 million backlog to convert into revenue in 2025, although some may extend into 2026 or 2027 due to service contracts.

Q: What is the market opportunity for the V-XR platform, and how do you see it impacting growth? A: John Givens, CEO: The V-XR platform fills a gap in our offerings, targeting smaller agencies with budget constraints. Price points range from $35,000 to $100,000. We anticipate significant adoption over the next two to five years, with the platform complementing our screen-based systems and expanding our reach into untapped markets.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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