EPS of $-0.09 increased by 100% from previous year
Gross margin of 54.6%
Net income of -1.54M
"Brightline Interactive entered into a $4 million-plus 12-month contract with the Department of Defense, for a spatial computing ecosystem, integrating AI workflow, and accelerated compute for a variety of defense use cases." - Lyron Bentovim
The Glimpse Group Inc (VRAR) QQ3 2024 Results Analysis – Spatial Core Transition, DoD Pipeline, and Path to Cash Flow Profitability
Executive Summary
The Glimpse Group entered QQ3 2024 amid a strategic pivot toward Spatial Core, a cloud-based, AI-enabled spatial computing software stack led by Brightline Interactive. Revenue for the quarter was approximately $1.90 million, down about 48% year over year and about 9% quarter over quarter, reflecting the company’s deliberate divestiture of non-core assets and a portfolio shift toward enterprise-scale recurring software solutions. Gross margin, while yielding a non-GAAP proxy improvement in some commentary, is reported at 54.6% for QQ3 2024 (gross profit of $1.04 million on $1.90 million revenue), with an annualized operating cash breakeven target around $12 million in revenue. Management emphasizes cost discipline and an evolving mix toward Spatial Core-led recurring software revenue, supported by a developing DoD and large-enterprise pipeline that could translate into meaningful ARR over the 2024–2025 horizon.
Management guidance centers on a near-term revenue stability or modest uptick over the next two quarters as divestitures finalize, followed by a more pronounced uplift in Q4 CY2024 and into 2025 as DoD and related contracts begin recognizing revenue. The CFO highlighted that operational cash breakeven is approximately $3 million per quarter ($12 million annually), and that the company could achieve cash flow profitability from operations in the coming months if the current pipeline closes. The quarter also shows a resilient balance sheet with roughly $4.3 million in cash, no corporate debt, and a net cash position after debt considerations, positioning the company to self-fund the Spatial Core transition absent new funding.
Overall, the QQ3 2024 results illustrate a calculated transition risk-reward profile: meaningful near-term revenue decline versus a longer-term growth runway driven by Spatial Core, DoD adoption, and enterprise deals. Investors should weigh the potential upside of multi-year DoD/state-and-federal contracts and AI-enabled digital twin capabilities against execution risk and the pace of contract closures in a bureaucratic sales environment.
Key Performance Indicators
Revenue
1.90M
QoQ: -8.71% | YoY:-48.38%
Gross Profit
1.04M
54.61% margin
QoQ: -27.15% | YoY:-57.73%
Operating Income
-1.90M
QoQ: -133.25% | YoY:-344.72%
Net Income
-1.54M
QoQ: -108.87% | YoY:100.00%
EPS
-0.09
QoQ: -102.48% | YoY:100.00%
Revenue Trend
Margin Analysis
Key Insights
Cash and Cash Equivalents: $4.29 million as of 3/31/2024; Net Debt: negative $3.66 million (net cash position given total debt of $0.625 million and cash balance).
Total Assets: $20.60 million; Total Liabilities: $5.52 million; Stockholders’ Equity: $15.09 million.
Current Ratio: 1.58; Quick Ratio: 1.58; Gross Intangibles and Goodwill heavily weighted (Goodwill ≈ $13.86 million; Intangibles ≈ $2.82 million).
Financial Highlights
Revenue: QQ3 2024 revenue = $1,895,643, down 48.38% YoY and down 8.71% QoQ (per earnings metrics). Gross Profit: $1,035,146; Gross Margin = 54.6% (YoY margin change not provided in revenue data; prior-year margin reported as 67% in the note, but the QQ3 2024 data shows 54.6% gross margin).
Operating Income: -$1,895,290; Operating Margin = -100.0% (reported ratio approximately -1.00); EBITDA: -$1,574,986; EBITDA Margin ≈ -83% (per period data). Net Income: -$1,542,256; Net Profit Margin = -81.3%.
Cash Flow and Balance Sheet:
- Cash and Cash Equivalents: $4.29 million as of 3/31/2024; Net Debt: negative $3.66 million (net cash position given total debt of $0.625 million and cash balance).
- Operating Cash Flow: -$0.925 million; Free Cash Flow: -$0.935 million.
- Total Assets: $20.60 million; Total Liabilities: $5.52 million; Stockholders’ Equity: $15.09 million.
- Current Ratio: 1.58; Quick Ratio: 1.58; Gross Intangibles and Goodwill heavily weighted (Goodwill ≈ $13.86 million; Intangibles ≈ $2.82 million).
Note: The reported “otherExpenses” line shows an anomalous large negative value in the data set (-1.542256e12), which appears to be a data error and is not treated as a cash or accrual item in the analysis above.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
1.90M
-48.38%
-8.71%
Gross Profit
1.04M
-57.73%
-27.15%
Operating Income
-1.90M
-344.72%
-133.25%
Net Income
-1.54M
100.00%
-108.87%
EPS
-0.09
100.00%
-102.48%
Key Financial Ratios
currentRatio
1.58
grossProfitMargin
54.6%
operatingProfitMargin
-100%
netProfitMargin
-81.4%
returnOnAssets
-7.49%
returnOnEquity
-10.2%
debtEquityRatio
0.04
operatingCashFlowPerShare
$-0.05
freeCashFlowPerShare
$-0.05
priceToBookRatio
1.39
priceEarningsRatio
-3.4
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Theme: Strategic pivot to Spatial Core and AI-enabled platforms
- Lyron Bentovim (CEO) highlighted a shift toward Spatial Core, led by Brightline Interactive, and announced a DoD contract exceeding $4 million for a 12-month spatial computing ecosystem integrating AI workflows and accelerated compute. This contract underpins a broader pipeline of multimillion-dollar Spatial Core opportunities with government and enterprise customers, with the short-term aggregate value estimated at $8–$12 million and potential to close in calendar year 2024. Context: This signals a potential shift from project-based revenues to recurring software revenues tied to enterprise-grade spatial computing deployments.
Theme: Near-term financial trajectory and profitability path
- CFO Maydan Rothblum stated QQ3 2024 revenue of roughly $1.9 million, with a year-over-year decline of about 48% and a nine-month decline of about 33%, driven by the divestiture of non-core assets and a pivot away from legacy customer bases. Gross margin for QQ3 2024 is reported at approximately 54.6%, with commentary indicating gross margins expected to remain in the mid-60s to mid-70s range over time. The company targeted an operational cash breakeven around $3 million revenue per quarter ($12 million annualized) and signaled that cash flow breakeven could be achieved as early as September 2024, assuming contract closures progress as anticipated.
Brightline Interactive entered into a $4 million-plus 12-month contract with the Department of Defense, for a spatial computing ecosystem, integrating AI workflow, and accelerated compute for a variety of defense use cases.
— Lyron Bentovim
Our operational cash breakeven point is now at approximately $3 million revenue per quarter or $12 million revenue annually.
— Maydan Rothblum
Forward Guidance
Management guidance centers on a staged recovery from the QQ3 2024 revenue level as divestitures finalize and Spatial Core-related contracts materialize. The near-term outlook calls for revenues to be generally flat to up over the next two quarters, followed by stronger top-line growth in Q4 CY2024 and into 2025 as DoD and other enterprise contracts come online. The company asserts profitability potential on a cash flow basis once revenue reaches the breakeven level and contract wins convert to recurring revenue streams. Specific targets include: (i) quarterly revenue around or above $3 million to reach cash flow breakeven, (ii) gross margins sustaining between approximately 65% and 75%, and (iii) cash flow-positive operations beginning in September 2024, contingent on contract closings. Key factors for investors to monitor include the pace and certainty of the DoD and enterprise contract closings, the contribution of Brightline Spatial Core within Brightline Interactive, the success of DoD-driven digital twin initiatives, and the trajectory of SG&A/operating costs as non-core assets continue to be divested.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
VRAR Focus
54.61%
-1.00%
-10.20%
-3.40%
TGCB
1.00%
-47.89%
74.40%
-2.65%
PRTH
38.30%
12.40%
-0.07%
-729.75%
KLTR
63.60%
-19.10%
-33.30%
-5.61%
RPAY
76.30%
-6.89%
-0.70%
-28.04%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
The Glimpse Group is in the midst of a high-potential but execution-risk transition. The near-term revenue decline has been acknowledged by management as a consequence of divestitures and a strategic realignment, but the cadence and scale of DoD and enterprise-contract closings could unlock a multi-year revenue trajectory with higher gross margins tied to Spatial Core. The key investment thesis hinges on: (1) the DoD and large-enterprise contract wins converting into recurring revenue, (2) the ability to sustain and grow gross margins within a mid-60s to mid-70s percentage range, and (3) timely achievement of cash flow profitability and operating-scale sustainability without external funding. Investors should monitor contract closure timing, the contribution of Brightline Spatial Core, the company’s ability to manage operating costs during the transition, and the evolution of the QQ3 revenue mix toward higher-margin software solutions. Given the current liquidity position and lack of debt, the company has runway to execute the strategic plan, but meaningful upside depends on successful contract conversion and the pace of Spatial Core adoption.
Key Investment Factors
Growth Potential
Spatial Core adoption across DoD and enterprise segments could unlock meaningful recurring software revenue and long-duration contracts. The DoD engagement, along with pipeline in the $8–12 million range for 2024, provides optionality for faster revenue realization and potential ARR growth into 2025. Partnerships with NVIDIA and Cesium for geospatial intelligence underpin scalable AI-driven digital twin applications across industrial, infrastructure, and training use cases.
Profitability Risk
Execution and contract-close risk for government and large-enterprise deals; revenue concentration on a few big contracts with long sales cycles; technology transition risk as the company migrates from legacy assets to a spatial-computing stack; reliance on customer budgets and procurement cycles in the defense and public sectors; data integrity concerns in the reported line items (anomalous otherExpenses) suggest potential accounting or data QA issues that require diligence.
Financial Position
Strong liquidity relative to near-term needs with about $4.3 million cash and no corporate debt, yielding a net cash position. The company maintains a modest total debt load and a solid equity base, providing runway to fund the Spatial Core transition. However, the current quarter shows negative profitability and negative cash flow from operations, underscoring the need for timely contract execution to convert the strategic pivot into sustainable cash generation.
SWOT Analysis
Strengths
Strategic transition to Spatial Core with enterprise-grade, cloud-based, AI-enabled solutions.
DoD contract momentum and multimillion-dollar pipeline (short-term $8–$12 million potential, with multi-year ARR upside).
Partnerships with leading tech players (NVIDIA, Cesium, Microsoft) enhancing scalability and credibility.
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