VirTra — Third Quarter 2026 Earnings Summary

Financial Performance:

• Third quarter 2026 total revenue was $7.6 million, a 42% increase year-over-year from $5.3 million in Q3 2025.
• Nine months 2026 total revenue was $16.9 million, a 13% decrease year-over-year from $19.5 million in the prior period.
• Third quarter 2026 gross profit was $5.3 million with a 70% gross margin, compared to $3.5 million and a 66% margin in Q3 2025.
• Nine months 2026 gross profit was $10.9 million with a 65% gross margin, compared to $13.5 million and a 69% margin in the prior period.
• Third quarter 2026 net income was $2.2 million ($0.19 diluted EPS), compared to a net loss of $0.4 million ($(0.03) diluted EPS) in Q3 2025.
• Nine months 2026 net income was $0.6 million ($0.05 diluted EPS), compared to $1.1 million ($0.09 diluted EPS) in the prior period.
• Third quarter 2026 Adjusted EBITDA was $2.6 million, a 2696% increase from $0.09 million in Q3 2025.
• Nine months 2026 Adjusted EBITDA was $2.2 million, a 13% decrease from $2.5 million in the prior period.
• Cash and cash equivalents at September 30, 2026, were $18.4 million.
• Total backlog as of September 30, 2026, was $27.6 million, consisting of $14.1 million in capital, $3.9 million in service, and $9.6 million in STEP contracts.
• Deferred revenue totaled $8.3 million ($6.9 million short-term, $1.3 million long-term) as of September 30, 2026.
• Total debt (notes payable) was $11.3 million ($0.3 million current, $11.0 million long-term) as of September 30, 2026.
• Net cash provided by operating activities for the nine months ended September 30, 2026, was $1.5 million, compared to $6.1 million in the prior period.

Guidance and Future Outlook:

• Management anticipates a more favorable operating environment as government funding programs reopen following nearly two years of limited grant activity.
• The company expects to capitalize on improving demand, though timing of grant awards, funding distributions, and customer deployments remains difficult to predict.
• Focus areas include expanding presence in core markets, deepening customer relationships, and converting backlog into revenue.
• The company has visibility into future revenue opportunities supported by the $27.6 million backlog.

Business Segments and Product Lines:

• Bookings totaled $10.3 million in Q3 2026, up 87% from $5.5 million in Q2 2026.
• Revenue growth in Q3 2026 was driven by international system deliveries and improved revenue conversion.
• Awarded a five-year sole-source contract with U.S. Customs and Border Protection (CBP) with up to $14 million in potential value to modernize, maintain, and support the agency's nationwide simulator training network.
• Awarded a $1.5 million sole-source contract from the U.S. Army for a V-300® training system and related equipment for firearms training and force readiness in Tajikistan.
• Solutions are now available for evaluation across Weapons Skills Development, Joint Fires Training, and Counter-Unmanned Aircraft Systems (C-UAS) via the U.S. Army Marketplace.
• Net operating expenses for the nine months 2026 were $10.4 million, down from $11.7 million in the prior period.

Market and Competitive Landscape:

• VirTra is expanding opportunities across federal, military, and international markets.
• The company is participating in the U.S. Army Marketplace to support future opportunities within the U.S. Army.
• Recent contract awards and participation in the Army Marketplace support the company's position in the judgmental use-of-force and firearms training simulator market.

Risks and Challenges:

• Customer funding and procurement timelines continue to influence the pace at which backlog converts to revenue.
• The timing of grant awards, funding distributions, and customer deployments remains difficult to predict.
• The nine-month revenue decline was attributed to several customers booked in Q3 and Q4 2025 being unable to accept delivery in the first nine months of 2026.

Management Commentary and Tone:

• CEO John Givens stated that third quarter results reflect continued improvement, highlighted by strong revenue growth, accelerating bookings, and improved profitability.
• Management noted that accelerating customer orders provide tangible evidence that demand is translating into business results.
• CFO Alanna Boudreau highlighted that gross margin expansion to 70% reflected the benefit of higher revenue volume and improved operating leverage.
• Management expressed confidence in the improving demand environment and the company's ability to maintain operating discipline to support profitable growth.

Other Key Points:

• VirTra held a conference call on November 12, 2026, with CEO John Givens and CFO Alanna Boudreau.
• The company reported a mortgage assumption of $4 million for the purchase of a building as a noncash financing activity.
• Total assets increased to $68.9 million as of September 30, 2026, from $65.1 million as of December 31, 2025.
• Total stockholders' equity was $46.4 million as of September 30, 2026.
• The company has 11,364,785 shares of common stock issued and outstanding as of September 30, 2026.