The Glimpse Group Q4 2025 Earnings Call Transcript

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September 30, 2025

Key Takeaways

  • Positive Sentiment: The Board has approved a plan to spin out BrightLine into an independent public company (targeting early 2026) with Glimpse shareholders to receive shares, intended to unlock hidden value.
  • Positive Sentiment: Fiscal year 2025 revenue was approximately $10.5M (up ~20% YoY) and Q4 revenue jumped to about $3.5M (Q4 +105% YoY); management expects FY26 revenue to exceed FY25.
  • Positive Sentiment: The company reached annual cash flow neutrality (operating cash loss ~$270k vs ~$5.2M prior year), holds ~$6.85M cash plus receivables, and has no debt, supporting near‑term operations.
  • Negative Sentiment: Management warns that Department of Defense contracting and U.S. government budget timing will make quarterly revenue recognition choppy, with Q1 FY26 expected to be significantly lower than Q4.
  • Neutral Sentiment: BrightLine has validated DOD/defense credentials (>$4M initial unified synthetic training contract, $2M+ SpatialCore prime, Navy simulator delivery, and a CRADA with Army CCDC) and a broad enterprise pipeline, but conversion to large multiyear programs remains uncertain and may be slow.
AI Generated. May Contain Errors.
Earnings Conference Call
The Glimpse Group Q4 2025
00:00 / 00:00

There are 5 speakers on the call.

Operator

Thank you for holding and please remain on the line. The Glimpse Group event will begin momentarily. Thank you for your patience. Welcome to The Glimpse Group's Fiscal Year twenty twenty five Financial Results Webinar. At this time, all participants are in listen only mode.

Operator

A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. The earnings release that accompanies this call is available on the Investors section of the company's website at https:ir.theglimpsegroup.com. Before we begin the formal presentation, I'd like to remind everyone that statements made on today's call and webcast, including those regarding future financial results and industry prospects are forward looking and may be subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the call. Please refer to the company's regulatory filings for a list of associated risks and we would also refer you to the company's website for more supporting industry information.

Operator

I would now like to hand the call over to Laron Bentovim, President and CEO of The Glimps Group. Laron, the floor is yours.

Speaker 1

Thank you, Holly. Thank you everyone for joining us. I'm pleased to welcome you to The Glimps Group's fiscal year twenty twenty five financial results investor call for quarter ended 06/30/2025. Fiscal year twenty twenty five was a remarkable year for Blimps with many achievements, Return to revenue growth, achievement of annual cash flow neutrality for the first time in the company's history, significant Tier one customer wins, divestiture of non core assets, key technology development centered around integrating AI into our immersive products. The filing of seven new patents primarily focused on the integration of AI with immersive technologies, all while maintaining high gross margins and a clean balance sheet.

Speaker 1

Our software products and services are at the forefront of several key emerging technology segments, immersive, spatial computing, AI, cloud. We have established a track record of working with major customers across industries, as well as relationships with some of the leading companies in the tech world and have a significant pipeline and growth potential. However, these have not translated into significant shareholder value creation, which has led us to strategically review and with the Board's approval of the plan that will unlock and create far more value for all of us as shareholders. I will go into more details later in my prepared remarks. Driving our growth going forward, our main engine is our subsidiary, Pipeline Interactive.

Speaker 1

As a quick reminder, DLI through its product, SpecialCore provides advanced spatial computing, AI driven operational simulation middleware software and solutions to the Department of War and Big Data driven enterprises. SpatialCore sits at the intersection of spatial computing, immersive technologies, AI, cloud and geospatial data. We view it as an operating system for computing, processing and visualizing information in three-dimensional space on the cloud. DLI specializes in creating AI supported workflows on top of dynamic synthetic environments that integrate multi model and real time data to accelerate decision making, enhance mission readiness and expand human and non human training capabilities that can be used in a variety of arenas including digital twins, robotics, drone and autonomous vehicles. While SpatialCore is at the cutting edge of technology, it is not science fiction.

Speaker 1

It is based on BLI's established fifteen years of technological development, deep knowledge base and rooted in proven paid for contracts with major entities with high operational and executional requirements. In fiscal year twenty twenty five alone, BrightLine achieved several critical milestones including successfully executing and delivering the development of a unified synthetic training ecosystem for a major DOW entity, a $4 plus million initial contract. The system enables soldiers to train, plan and execute missions in a fully virtualized environment, providing interfaces for collaboration and digital twin integration and functionality. Entered into a $2 plus million SpatialCore contract with another DOW entity as the prime as direct prime to be delivered over the next twelve months. While we can't go into any additional details just yet, it has similar AI and deep tech characteristics as other special core contracts.

Speaker 1

Successfully delivered first full motion immersive simulator to the U. S. Navy, providing the U. S. Navy with advanced simulation capabilities that bridge the gap between the real and virtual worlds.

Speaker 1

This state of the art system incorporates spatial computing elements to enable high level cost effective simulations ensuring that military personnel can train in realistic and immersive environments. Delivered an advanced immersive simulation to a large government service integrator, PLI was able to create a sophisticated spatial simulation in record time, setting what we believe has the potential to become a new industry standard. This initial simulation project was developed with the goal of allowing the GSI to gather simulation needs from others to then add to this build, also further deployments in a cost effective and scalable manner. Entered into a Cooperative Research and Development Agreement, CRADA, with the U. S.

Speaker 1

Army Combat Capabilities Development Command, Command Control Communication, Computer, Cyber Intelligence Surveillance and Reconnaissance Center, BrightLine to develop, assess and improve workflows to create and augment synthetic imagery for use in training and assessing artificial intelligence and machine learning algorithms. These, in addition to prior recent years achievements, represent initial contract and validation of VLI's technology and delivery capabilities. All of these have the potential to expand into multimillion, multiyear follow on contracts leading to eventually possible inclusion in programs of record, which are exceptionally large long term DOW contracts. In addition, BLI has a robust pipeline of new potential customers both in the DOW space and in the enterprise big data segment, oil and gas, aviation, tech and many others. We believe that BLI's growth potential is immense, even if it does not immediately materialize to its fullest extent and takes time to fully develop.

Speaker 1

DOW contracting, for example, is notoriously slow and quite complex. In parallel to BrightLine, our other entities also achieved major milestones during the fiscal year, including an NIH grant in partnership with Yale Medical, Drexel University and New Jersey Institute of Technology to advance VR education for adolescent and young adult cancer patients. Partnership with Montefiore Einstein for VR study for teen mental health, three d immersive enterprise service agreement with a leading global energy tech company. Ortel Reality, our subsidiary, entered into several contracts for its AI driven immersive training product, while Glimpse Learning entered into multiple software license contracts in the Healthcare and Educational segments. Despite all of this, we don't believe that our intrinsic value and certainly not BrightLine's is reflected in Glimp's current valuation, not even remotely in our view.

Speaker 1

Indeed, based on our internal analysis, we believe that BLI's public company comps alone in the Defense Tech AI segment trade at vast multiples of trailing annual revenue. Even if a significantly discounted revenue multiple was to be applied to BLI, its valuation would far exceed Blimps' current valuation. We believe that Whiteline's true value and potential is hidden within the Glimps umbrella and is potentially encumbered by it. This being the case, and in light of Glimps' current position as a largely abundant illiquid macrocap, we have reached a conclusion that the best way to maximize shareholder value for Glim shareholders and to increase BLI's chances of success is to spin out BLI. If successful, BLI will become an independent publicly traded company, a pure play, well funded, standalone spatial computing, AI driven, cloud operational simulation middleware provider to the DOW and big data driven enterprises.

Speaker 1

While the final methodology has not been determined yet and success is not guaranteed, our Board of Directors has approved the strategy and general process, which we expect to play out in the coming months. As part of the process, the plan is for Glim's shareholders to be issued shares in this spun out DLI public entity as a distribution. In parallel, earned Glim's shareholders will maintain their holdings in Glim's, which we believe could have considerable and attractive going forward alternatives to pursue as a clean, healthy NASDAQ technology company. With that, I will now turn it over to Madan Rothblum, Plimson's CFO and COO, to review the financial results. Maidan?

Speaker 2

Thanks, Liron. I will limit my portion to a summary review of our financial results. A full breakdown is available in our 10 ks and press release that were filed earlier today and yesterday afternoon. Please note that I may refer to non GAAP measures. For the calculation of non GAAP measures, please refer to the MD and A section of our 10 ks filing.

Speaker 2

Fiscal year twenty twenty five revenue of approximately $10,500,000 an increase of approximately 20% compared to fiscal year twenty twenty four revenue of approximately $8,800,000 The increase was primarily driven by an increase in spatial core revenues and despite the divestiture of noncore assets and entities. Q4 fiscal year twenty twenty five, that's the April, revenue of approximately $3,500,000 an approximate 105% increase compared to Q4 fiscal year twenty twenty four revenue of approximately $1,700,000 and an approximate 150% increase compared to Q3 fiscal year twenty twenty five, that's the January revenue of approximately $1,400,000 We expect fiscal year twenty twenty six revenue to exceed fiscal year twenty twenty five revenue. However, given the nature of BrightLine's DOW driven contracts, revenue recognition timing and potential U. S. Government budget delays, the per quarter revenue in fiscal year twenty twenty five is expected to be quite choppy with significant movement from quarter to quarter.

Speaker 2

We expect Q1 fiscal year twenty twenty six to be significantly lower than Q4 fiscal year twenty twenty five and revenues to grow sequentially in the following quarters. Gross margin for fiscal year twenty twenty five was approximately 67.5% on par with 67% for fiscal year twenty twenty five sorry, 2024. We expect our gross margins to remain in the 65% to 75% range due to a larger portion of revenue coming from spatial core and software license sales. We were essentially cash breakeven for the fiscal year, marking an extraordinary turnaround. Net operating cash loss in fiscal year twenty twenty five was approximately negative 270,000.00 compared to a net operating cash loss of approximately negative $5,200,000 for fiscal year twenty twenty four, reflecting our significant reorganization efforts, cost reductions, revenue growth and the maintenance of high gross margins.

Speaker 2

The company's cash and equivalent position as of 06/30/2025, was approximately $6,850,000 with an additional $850,000 in accounts receivable. We continue to maintain a clean capital structure with no debt, no convertible debt and no preferred equity. I'd now like to pass it back to Liron for some closing remarks, after which we will begin our Q and A session. Yaron?

Speaker 1

Thank you, Meidan. Fiscal year twenty twenty five was a pivotal year for Glimps. We executed on our plan and made great strides, and there are immense opportunities ahead of us. We are determined to try and unlock shareholder value and have several options to achieve this. We intend to aggressively pursue these in the coming months, all the while keeping a sharp focus on our existing businesses and continuing to drive their growth.

Speaker 1

During this period, we may need to minimize public communications. I thank you all for your interest in and support of the Dulms Group. And now I'll turn the call back over to Holly to take some questions.

Operator

Thank you, you. Our first question is coming from Casey Ryan with Westpark Capital.

Speaker 3

Good morning, Thanks for the update. Pretty significant. Can I ask sort of as we look at markets, do you feel like BLI's opportunities are primarily in defense and defense related industries? Or is there some overlap with other opportunities in education and health care? And I'm

Speaker 1

just trying to understand kind of

Speaker 3

what would be left with the core business and what would be going with BOI outside of defense contracts currently?

Speaker 1

Yes. So good morning, Casey. And I'll take kind of two separate kind of parts of the question. So in terms of BrightLine's opportunity, obviously, kind of we've made significant strides with the DOW, and we've got multiple paths that each lead to pretty significant opportunities. In addition to that, we've basically started exploring how to work, with our spatial core product with enterprises.

Speaker 1

Kind of it's going to take probably longer to get kind of significant revenue from that, but we see this as kind of a pretty tremendous opportunity for Education and healthcare are less the focus for BrightLine, but that's the focus of some of the other entities within GLIMZ, where we see a significant opportunity integrating immersive technologies with AI and kind of offering a variety of solutions that will help educational organizations both at the college level and at the k 12 level, as well as kind of healthcare enterprises to utilize kind of our technology to simulate, train and practice certain scenarios.

Speaker 3

Okay. Okay. That's helpful. And then I know it's early days. We haven't worked out all the details.

Speaker 3

But from the announcement today to sort of some endpoint where there's something with BOI that happens that's fully consummated. Are we looking at a time frame that's maybe twelve months? Or does that feel too long to you and you think it's something sooner than that?

Speaker 1

That is way too long. Kind of we expect to initiate the process kind of in the coming weeks and expect that process to take several months to go through, but we expect something to happen if we're successful at the beginning of the calendar year.

Speaker 3

Okay. Terrific. Terrific. And then in terms of sort of the education markets, I guess, and maybe other commercial markets outside of defense again, where do you think do your customers feel like they're still learning how to integrate the technologies? Or do you think they're getting closer to sort of integrating them into their normal operations and expanding them broadly, say a college or K-twelve institution?

Speaker 1

That's a good question, Casey. Kind of I think that we are very close to that kind of transition of basically organizations trying things out to organizations fully ready to kind of jump into the water and start swimming. We're working with one of the leading universities in in Florida as our kind of primary first kind of a kind of beta partner for kind of AIA solution, and we're planning in the fall semester in the spring semester, starting in January, to fully launch that solution in partnership with them. And that that will be a significant test and probably one of the, more advanced kind of willingness of an organization to really jump into the immersive AI space.

Speaker 3

Okay. That sounds very compelling. And then, sort of just jumping back to BLI, do we sort of sense that, like, there will

Speaker 1

be a name change, or

Speaker 3

do we think BrightLine has has a good brand name and that'll sort of be the name that we move forward with? Because because it feels like all the key players would sort of know that name already. But I just sort of wonder

Speaker 1

I what don't I expect any any name change. Kind of we expect Okay. Because BrightLine BrightLine has a a significant brand in the space that it's here, but with kind of with primarily with kind of customers, partners, technology, kind of there's no reason to change the name. It's a good name.

Speaker 3

Yeah. Okay. Perfect. Well, this is a significant and, potentially a great strategic move. So thank you for the update.

Speaker 3

I'll sort of drop off the question line and let others ask questions as we go forward. Thank you.

Speaker 1

Thank you, Casey.

Operator

Our next question is from Richard Malinski with Max Ventures.

Speaker 4

Hey, Lauren. First of all, congratulations in turning the company's cash flow around. That was a big change. And this bright line seems very, very exciting. And I'm wondering, I did love the news release of what you're doing with teen mental health at Montefiore.

Speaker 4

And I know you said the government is really the number one market for you, but the healthcare could be like number two. And I'm wondering whether this your services and your AI, you could go to some major companies and offer the services for them to sell it to their customers and increase the sale that way besides you doing it on your end?

Speaker 1

Good morning, Richard. This is exactly kind of the path we're planning on taking in 2026 with some of our AI solutions, kind of AIA product. We are looking at finding partners in certain industries that specialize in that industry. They've been offering basically two d, kind of solutions to their customers in a variety of fields. We wanna kind of integrate their know how in their industry with our AIA solutions and then allowing them to offer the solution on our platform to their customers, kind of integrating immersive and AI into their solution.

Speaker 1

So that's definitely a game plan for us for 2026 for the AIA product.

Speaker 4

Right. And when realistically do you think this spin off could happen in your estimate? Is it six months down the road, three months? Do you have any idea when you'd want this to happen?

Speaker 1

So our plan is to make it happen as quickly as possible as I responded to Casey's question. I expect this to happen early in 2026 if everything goes according to plans.

Speaker 4

Right. That's terrific. And with one of my last questions, you've been really good monitoring managing the cash. Do you expect the cash you won't have any cash needs at all at this point in time based on what you currently have in the bank and your projections?

Speaker 1

Yes. We expect to be fully be able to operate kind of with the cash we have.

Speaker 4

All right. Look, I greatly appreciate. Great job and look forward to seeing the progress and further contracts.

Speaker 1

Thank you, Rich.

Speaker 4

Thank you.

Operator

Our next question for today is from Hung Nguyen, a Private Investor.

Speaker 3

Hi.

Speaker 1

As far as enterprises, do you plan to get into the training of employees for private enterprises as far as system and processing? Thank you for the question. Kind of we are kind of our subsidiaries are not focused directly on corporate training solutions, but our AIA solution allows employees to soft skill train various scenarios in a very effective way and that's definitely part of our go to market. Thank you.

Operator

At this time, we'll turn to some write in questions. Our first online question is, is the proposed spin out of BLI given the overhead costs of being a small public company are high and profits are still low, are still small?

Speaker 1

Thank you for the question. We've basically taken that into consideration and definitely that's a kind of reason against doing it and part of the reason we've not explored this now. But we believe, even with, the cost of maintaining two public entities, the value that will be created to Glim's shareholders and the potential for BrightLine to access capital as part of the process make this a significantly valuable opportunity for BIM shareholders.

Operator

Our next online question is, when can we expect this spin off? Very exciting developments with BrightLine. Do you see joint ventures with larger companies wanting to offer BrightLine services to their customers?

Speaker 1

So two parts to this question. The first, we expect if everything goes according to plan to have this happen early in 2026. And we're definitely constantly looking at partnership for BrightLine. We have significant relationships with some of the world leading technology companies, and, we expect to continue to work with them, and strengthen the relationships.

Operator

I'd now like to turn the call back over to Laurent for closing remarks.

Speaker 1

Thank you, Holly. I would like to thank each and every one of you for joining our earnings conference call. We look forward to continuing to update you on our ongoing progress and growth. If we were unable to answer any of your questions, please reach out to us directly. Thank you and have a great day.

Operator

This does conclude today's webinar. Thank you for your participation and have

Speaker 1

a

Operator

wonderful day.

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