VirTra — Second Quarter and Six Months 2026 Earnings Summary

Financial Performance

• Total revenue for the three months ended June 30, 2026, was $5.8 million, a 17% decrease from $7.0 million in the prior year period; for the six months ended June 30, 2026, revenue was $9.2 million, a 35% decrease from $14.1 million in the prior year period.
• Gross profit for the quarter was $3.4 million (59% margin) compared to $4.8 million (69% margin) in the prior year; for the six-month period, gross profit was $5.5 million (60% margin) compared to $10.0 million (71% margin) in the prior year.
• Net loss for the quarter was $0.3 million ($0.02 diluted EPS) compared to net income of $0.2 million ($0.02 diluted EPS) in the prior year; for the six-month period, net loss was $1.6 million ($0.14 diluted EPS) compared to net income of $1.4 million ($0.13 diluted EPS) in the prior year.
• Adjusted EBITDA for the quarter was $0.4 million, down 45% from $0.7 million in the prior year; for the six-month period, Adjusted EBITDA was a loss of $0.5 million, down 117% from $2.4 million in the prior year.
• Net operating expenses were $3.6 million for the quarter (down from $3.9 million) and $7.1 million for the six months (down from $7.7 million).
• Cash and cash equivalents were $14.3 million as of June 30, 2026, down from $18.6 million as of December 31, 2025.
• Total liabilities increased to $22.1 million as of June 30, 2026, from $19.5 million as of December 31, 2025, driven by an increase in long-term notes payable to $11.1 million from $7.3 million.
• Deferred revenue totaled $8.1 million as of June 30, 2026 ($6.9 million short-term, $1.2 million long-term), down from $9.3 million as of December 31, 2025.
• Net cash used in operating activities for the six months ended June 30, 2026, was $2.7 million, compared to net cash provided of $6.0 million in the prior year period.

Guidance and Future Outlook

• Management expects the underlying demand environment to remain healthy despite uncertainty around funding timelines.
• The company anticipates converting backlog into revenue, with a focus on supporting customers through the funding and procurement process.
• The newly acquired Orlando facility is expected to contribute positively to future financial performance through tenant lease income.
• Management highlighted increased grant-related activity and momentum in the international business as indicators of future revenue opportunities.

Business Segments and Product Lines

• Bookings totaled $5.5 million during the second quarter.
• Total backlog at June 30, 2026, was $24.9 million, consisting of $13.2 million in capital, $3.8 million in service, and $7.9 million in STEP contracts.
• The company expanded its defense training market presence by acquiring a dual-building Orlando campus to enhance customer engagement and program execution.
• VirTra was accepted into the U.S. Army Marketplace across three mission-critical capability areas: Weapons Skills Development, Joint Fires Training, and Counter-Unmanned Aircraft Systems (C-UAS).

Market and Competitive Landscape

• Domestic funding availability and procurement timing continue to impact revenue conversion, with some customers booked in Q3 and Q4 2025 unable to accept delivery in the first six months of 2026.
• The company sees encouraging activity in domestic, international, and military markets, with customers actively submitting applications and advancing procurement efforts.
• Recent grant funding releases and increased customer participation in grant programs indicate agencies are moving forward, though award and delivery timelines remain difficult to predict.

Risks and Challenges

• Uncertainty around funding timelines and procurement processes remains a primary challenge affecting the pace of revenue conversion.
• The decrease in revenue is attributed to customers booked in the prior year being unable to accept delivery in the current period.
• Forward-looking statements note that actual results may differ materially from plans due to risks, uncertainties, and factors that could cause results to differ from expectations.

Management Commentary and Tone

• CEO John Givens stated that second quarter results reflected increased revenue conversion compared to the first quarter, particularly in international business, despite domestic funding challenges.
• CFO Alanna Boudreau noted that the quarter's revenue increase significantly compared to the first quarter, supporting a return to positive adjusted EBITDA.
• Management expressed confidence in the strength of the backlog and opportunity pipeline, emphasizing a focus on disciplined expense management and investment in content development and technology.

Other Key Points

• The company completed the acquisition of its Orlando facility during the quarter.
• VirTra's conference call regarding these results was held on August 13, 2026, at 4:30 p.m. Eastern time.
• The company reported a net loss from operations of $1.5 million for the six months ended June 30, 2026, compared to income from operations of $2.3 million in the prior year.
• Inventory, net, increased to $14.2 million as of June 30, 2026, from $13.1 million as of December 31, 2025.
• Unbilled revenue increased to $3.2 million as of June 30, 2026, from $0.9 million as of December 31, 2025.