EPS of $-61,259.42 decreased by 91% from previous year
Gross margin of 71.7%
Net income of -1,502.20B
"Spatial Core is delivering in some of the most advanced and challenging environments, with tremendous potential to become an enabling technology in the 3D, big data, AI cloud space." - Lyron Bentovim
The Glimpse Group Inc (VRAR) QQ3 2025 Financial Results – Spatial Core Momentum, Positive Operating Cash Flow, and Strategic Outlook in Immersive Tech
Executive Summary
The Glimpse Group reported a modest-Q3 FY2025 revenue of approximately $1.4 million, reflecting a 25% year-over-year decline driven primarily by revenue recognition timing. Despite the revenue softness, the quarter demonstrated meaningful operating leverage: gross margin rose to about 72% (vs. ~70% in Q3 FY2024), and the company delivered positive cash flow from operations for the second consecutive quarter (approximately $0.13 million). Management emphasized Spatial Core as the primary growth engine, signaling expanding traction with DoD entities and growing enterprise opportunities, and highlighted ongoing large-DoD and seven-figure Spatial Core deals in the pipeline. For FY2025, management guided revenue to $10–$11 million, with Q4 expected to be between $3.2 and $3.8 million and EBITDA projected to be modestly positive in the near term as revenue recognition accelerates. The balance sheet remains clean and levered toward financial flexibility: about $7.0 million in cash and equivalents with no debt or preferred equity, underpinning potential strategic moves (including a suggested use of a $2 million common share buyback plan if warranted). While near-term profitability remains a work in progress, the company’s cash-generative capability, high gross margins, and a diversified immersive software portfolio position Glimpse to capitalize on Spatial Core’s monetization in the 3D/AI cloud space. Investors should monitor DoD budget timing, Spatial Core deal closures, and the progression of enterprise deployments as the key catalysts for a re-acceleration in revenue and a clearer path to sustained profitability.
Key Performance Indicators
Revenue
1,422.24B
QoQ: 44 880 449.74% | YoY:75 026 421.34%
Gross Profit
1,020.03B
71.72% margin
QoQ: 50 373 370.25% | YoY:98 539 236.48%
Operating Income
-1,458.11B
QoQ: -21 049 718 592.85% | YoY:-76 933 456.34%
Net Income
-1,502.20B
QoQ: -5 806 284 886.64% | YoY:-97 402 795.50%
EPS
-81.81K
QoQ: -5 843 828 957.14% | YoY:-91 207 931.22%
Revenue Trend
Margin Analysis
Key Insights
Revenue (Q3 FY2025): approximately $1.4 million, down about 25% YoY vs Q3 FY2024 (~$1.9 million). Nine months ended March 31, 2025: approximately $7.0 million (essentially flat vs the prior-year period). FY2025 revenue guidance: $10–$11 million; Q4 FY2025 revenue guidance: $3.2–$3.8 million.
Gross margin (Q3 FY2025): ~72% (vs ~70% in Q3 FY2024). Going-forward gross margin guided to 55%–75% as revenue mix shifts toward Spatial Core and software licenses.
EBITDA and profitability: Q3 FY2025 adjusted EBITDA loss of about $1.0 million; nine-month adjusted EBITDA loss ~ $1.2 million. Management expects Q4 FY2025 EBITDA to be positive on higher revenue, implying a modestly improving profitability trajectory for the year.
Operating cash flow: Net operating cash flow from operations in Q3 FY2025 was positive, approximately $0.13 million (second consecutive positive quarter). Nine-month cash flow from operations approximate negative $0.13 million.
Balance sheet and liquidity: cash and cash equivalents ~ $7.0 million as of March 31, 2025, with an additional ~ $0.65 million in accounts receivable. No debt, no convertible debt, and no preferred equity.
Financial Highlights
- Revenue (Q3 FY2025): approximately $1.4 million, down about 25% YoY vs Q3 FY2024 (~$1.9 million). Nine months ended March 31, 2025: approximately $7.0 million (essentially flat vs the prior-year period). FY2025 revenue guidance: $10–$11 million; Q4 FY2025 revenue guidance: $3.2–$3.8 million.
- Gross margin (Q3 FY2025): ~72% (vs ~70% in Q3 FY2024). Going-forward gross margin guided to 55%–75% as revenue mix shifts toward Spatial Core and software licenses.
- EBITDA and profitability: Q3 FY2025 adjusted EBITDA loss of about $1.0 million; nine-month adjusted EBITDA loss ~ $1.2 million. Management expects Q4 FY2025 EBITDA to be positive on higher revenue, implying a modestly improving profitability trajectory for the year.
- Operating cash flow: Net operating cash flow from operations in Q3 FY2025 was positive, approximately $0.13 million (second consecutive positive quarter). Nine-month cash flow from operations approximate negative $0.13 million.
- Balance sheet and liquidity: cash and cash equivalents ~ $7.0 million as of March 31, 2025, with an additional ~ $0.65 million in accounts receivable. No debt, no convertible debt, and no preferred equity.
- Cash conversion and leverage: Company emphasizes a clean capital structure and the potential use of a modest buyback program if appropriate to protect shareholder value.
- Guidance and mix: Gross margin guidance broadened to a 55%–75% band reflecting a higher contribution from Spatial Core and software licenses. The management commentary reiterates Spatial Core’s role as a core growth engine and the potential for several additional seven-figure Spatial Core opportunities in the coming months.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
1,422.24B
75 026 421.34%
44 880 449.74%
Gross Profit
1,020.03B
98 539 236.48%
50 373 370.25%
Operating Income
-1,458.11B
-76 933 456.34%
-21 049 718 592.85%
Net Income
-1,502.20B
-97 402 795.50%
-5 806 284 886.64%
EPS
-81.81K
-91 207 931.22%
-5 843 828 957.14%
Key Financial Ratios
currentRatio
2.57
grossProfitMargin
71.7%
operatingProfitMargin
-102.5%
netProfitMargin
-105.6%
returnOnAssets
-7.42%
returnOnEquity
-8.98%
debtEquityRatio
0
operatingCashFlowPerShare
$16279
freeCashFlowPerShare
$14022
priceToBookRatio
0
priceEarningsRatio
-0
Net Income vs. Revenue
Expense Breakdown
Management Commentary
- Strategy and growth trajectory: Lyron Bentovim emphasized Spatial Core as an enabling technology in 3D, big data, and AI cloud space, with traction across DoD entities and growing enterprise opportunities. He noted Spatial Core’s potential to be “an enabling technology in the 3D, big data, AI cloud space,” and highlighted Brightline’s DoD contract and the Navy immersive-simulations milestone as proof points of adoption.
- Operational execution and cash generation: Maydan Rothblum pointed to two consecutive quarters of positive cash flow from operations and a path to EBITDA-positive quarters in FY2025 driven by higher revenue recognition and disciplined cost control. She also highlighted the company’s “clean capital structure with no debt, no convertible debt, and no preferred equity.”
- DoD and pipeline momentum: The executive team cited government budget timing and continuing resolutions as headwinds but reiterated the strong positioning for seven-figure Spatial Core opportunities in the coming months, with Brightline delivering first full-motion immersive simulator to the U.S. Navy and a seven-figure Spatial Core deal expected to be signed soon.
- Outlook and valuation narrative: The management acknowledged a valuation disconnect relative to intrinsic value given the company’s cash flow generation, cash balance, and growth trajectory, and flagged a potential utilization of the buyback plan to protect equity value if warranted.
- Market and product mix: The call stressed the shift toward Spatial Core and software licenses, contributing to a revised, broader gross margin target and a more software-centric revenue mix, with implications for operating leverage and profitability going forward.
Spatial Core is delivering in some of the most advanced and challenging environments, with tremendous potential to become an enabling technology in the 3D, big data, AI cloud space.
— Lyron Bentovim
Q3 fiscal year 2025 revenue of approximately $1.4 million, a 25% decrease compared to Q3 fiscal year 2025, ending March 31, 2024 revenue of approximately $1.9 million. This expected and previously discussed decrease was primarily driven by revenue recognition timing.
— Maydan Rothblum
Forward Guidance
The management team reaffirmed an FY2025 revenue target of $10–$11 million, implying a mid-teens year-over-year uplift despite the year-to-date revenue mix challenges and divestitures. They expect Q4 FY2025 revenue in the $3.2–$3.8 million band, aided by the final recognition of a large DoD Spatial Core contract and ongoing Spatial Core opportunities in the DoD and enterprise segments. Gross margin guidance was expanded to 55%–75% reflecting higher-margin Spatial Core and software-license contributions. The company projects EBITDA to be positive in the upcoming quarters as revenue recognition accelerates, though the full-year EBITDA could still be slightly negative given the current mix and ongoing investments in growth initiatives.
Key factors for investors to monitor include: (1) the pace and size of seven-figure Spatial Core deals and DoD awards, (2) progression of enterprise Spatial Core deployments and associated software licenses, (3) execution of cost-control measures sustaining high gross margins, and (4) balance sheet stability and liquidity demonstrations that could enable selective buybacks or strategic investments. Potential risks include variability in DoD contracting timelines due to budget uncertainties, reliance on government procurement cycles, competition in immersive software, and the risk that revenue realization timing continues to dampen quarterly GAAP profitability.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
VRAR Focus
71.72%
-1.03%
-8.98%
0.00%
TGCB
1.00%
-47.89%
74.40%
-2.65%
PRTH
37.90%
16.80%
-17.50%
12.55%
KLTR
66.70%
-10.10%
-15.00%
-14.06%
RPAY
77.80%
-0.85%
0.43%
55.52%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
The Glimpse Group presents an asymmetric risk-reward profile. On the positive side, the company has established a credible foundation for growth through Spatial Core, a robust gross margin profile, and a clean balance sheet with no net debt. The two-quarter streak of positive operating cash flow, combined with a clear intent to optimize cost structure, supports a path toward EBITDA-positive quarters should revenue recognition accelerate. The FY2025 revenue target of $10–$11 million implies a meaningful upturn from the Q3 level, contingent on successful execution of large Spatial Core DoD contracts and broader enterprise deployment. The potential for a modest buyback adds optionality for capital allocation if the stock remains undervalued relative to intrinsic value.
Key catalysts include: (1) closure of seven-figure Spatial Core deals in the coming months; (2) continued Navy/DoD contract awards and broader spatial computing deployments; (3) improvement in enterprise deployments driving license revenue and cloud-based services; (4) demonstration of EBITDA-positive quarters in Q4 FY2025 and into FY2026.
Risks to this thesis include DoD budget timing risk, delayed contract awards, execution risk in delivering complex immersive solutions, and the challenge of sustaining a rapidly growing software-and-services mix in a small-cap company. Overall, for risk-tolerant investors with a long horizon, Glimpse offers a compelling bet on Spatial Core monetization and a potential re-rating as revenue scales toward the guided FY2025 range and profitability demonstrates more durable leverage.
Key Investment Factors
Growth Potential
Spatial Core traction with DoD and enterprise segments provides a multi-channel growth engine. The anticipated seven-figure Spatial Core deals and the Navy's immersive-simulator milestone suggest meaningful ramp potential into FY2026 if pipeline converts. The shift toward higher-margin software licenses and cloud-based services could lift overall gross margins toward the 55–75% guidance band, improving operating leverage as revenue grows.
Profitability Risk
Dependency on DoD budgeting cycles and government procurement timelines can introduce revenue timing volatility. Revenue is currently small and concentrated; success hinges on closing large Spatial Core contracts and enterprise deployments. The company carries no debt, but execution risk and client concentration could pose downside in weak demand environments. Competition in AR/VR software platforms and potential dilution risk from equity-based compensation or future financing could pressure margins and valuation.
Financial Position
Strong liquidity with ~ $7.0 million in cash, no debt, and a clean capital structure. Positive operating cash flow for two consecutive quarters enhances financial resilience. The company’s evolving revenue mix toward high-margin Spatial Core software licenses supports margin expansion potential and better cash generation over time.
SWOT Analysis
Strengths
Strong gross margin around 72% in Q3 FY2025, indicating favorable product mix toward Spatial Core and software licenses
Two consecutive quarters of positive cash flow from operations, demonstrating improved operating leverage and cash discipline
Clean balance sheet with no debt, no convertible debt, and no preferred equity; substantial liquidity (~$7M cash)
Diversified immersive software platform with a portfolio of offerings (Spatial Core, Brightline, Glimpse Lenses, Fortell Reality, etc.) and an expanding DoD/enterprise pipeline
Strategic focus on Spatial Core as a transformative analytics/AI cloud enabler with real-world applications (robotics, drones, digital twins)
Weaknesses
Forecasted revenue growth still relies on timely closing of large DoD and enterprise deals, creating execution and timing risk
Q3 revenue declined ~25% YoY due to recognition timing, highlighting sensitivity to contract timing and revenue recognition policies
Overall scale remains small relative to large-cap peers, which may limit near-term profitability and market visibility
Concentration risk in government-related contracts and a narrow operating runway until FY2026 profitability improves
Opportunities
DoD contracts and expanding Spatial Core pipeline could unlock multi-quarter revenue growth
Enterprise adoption of Spatial Core across industries (manufacturing, healthcare, education) could broaden addressable market
Potential capital allocation actions (e.g., buyback) to support shareholder value given undervaluation vs intrinsic value
Growth in software licenses and cloud-based services can improve gross margins and operating leverage
Threats
Delays or cancellations in government funding and DoD budget cycles could stall deals or push revenue timing into future quarters
Competition in AR/VR software and spatial computing solutions could pressure pricing and market share
Macro uncertainties and procurement delays may impact customers’ ability to commit to enterprise licensing and long-term contracts
The Glimpse Group Inc (VRAR) QQ1 2025 Results Analysis: Spatial Core Momentum, DoD Pipeline, and Strategic Realignment Driving a Path to Profitable Gr...