Virtuix Holdings Inc. — First Quarter Fiscal 2027 Earnings Summary

Financial Performance

• Net sales were $0.8 million for the three months ended June 30, 2026, a 26% decrease from $1.0 million in the prior-year period, driven by the fulfillment of legacy backlog in the prior year versus new customer sales in the current quarter.
• Gross profit increased 29% to $227,158 from $176,077 in the prior year, with gross margin expanding to 30% from 17%, attributed to higher Omni One system pricing.
• Total operating expenses increased 86% to $4.1 million from $2.2 million, primarily due to a $0.7 million increase in stock-based compensation and $1.2 million in professional services fees.
• Total other expense was $3.2 million compared to $0.2 million, driven by $2.5 million in interest expense and non-cash amortization of debt discount.
• Net loss was $7.2 million compared to $2.3 million in the prior year; net loss per share narrowed from ($0.28) to ($0.22).
• Adjusted EBITDA loss was $3.1 million compared to a loss of $1.9 million in the prior year.
• Cash and cash equivalents totaled $7.4 million as of June 30, 2026, down from $9.5 million as of March 31, 2026.
• Deferred revenue decreased to $639,551 from $666,327 in the prior quarter.
• Current portion of notes payable increased to $9.66 million from $5.33 million.

Guidance and Future Outlook

• Management expects new order momentum to convert into accelerating revenue growth.
• The company aims to advance defense programs toward larger awards and complete one or more acquisitions in the defense training sector.
• Future goals include expanding into enterprise robotics and healthcare applications via a multi-use platform strategy combining high-volume consumer sales with high-value defense and enterprise contracts.
• The company anticipates recurring revenues from software licensing and customized simulation development.

Business Segments and Product Lines

• New orders for Omni One systems increased 72% year-over-year and approximately 150% since the launch of Omni One for Quest.
• Defense segment: Advanced the U.S. Marine Corps Infantry Fireteam Trainer as lead systems integrator; entered the counter-drone training market via integration with LeadTech's Counter-UAS Personnel Trainer; awarded U.S. Air Force SBIR Phase I funding for the Virtual Terrain Walk platform; delivered first system to the Pennsylvania Air National Guard.
• Enterprise segment: Sold first Omni One Enterprise system to Tesla for Optimus humanoid robot teleoperation; selected for NASA's Moon and Mars Exploration Analog mission; partnered with Sirica Therapeutics to deliver two systems for AI-driven autism therapy.
• Consumer segment: Omni One for Quest launch expanded addressable market to millions of active Quest users.

Market and Competitive Landscape

• The Meta partnership has reshaped the order profile and expanded the addressable market.
• The company is exploring joint marketing opportunities and product bundling with Meta.
• The company won its second consecutive 2026 Auggie Award for Best Interaction Product.
• Management is actively reviewing acquisition opportunities in the defense training and simulation industry, targeting companies with annual revenues between $10 million and $50 million.

Risks and Challenges

• Substantial doubt regarding the company's ability to continue as a going concern due to limited cash runway.
• Risks related to converting new orders into revenue and meeting convertible note and debt obligations.
• Potential for contract cancellations, modifications, or funding changes in government contracting.
• Uncertainties regarding market conditions, consumer demand for VR products, and the success of defense program milestones.
• Risks associated with identifying and integrating acquisitions, including achieving anticipated synergies.

Management Commentary and Tone

• CEO Jan Goetgeluk described the quarter as one of the strongest commercial quarters in recent history, citing accelerating consumer demand.
• Management emphasized that new orders are a better forward indicator than reported revenue, which was impacted by legacy backlog fulfillment.
• Management expressed confidence in the Meta partnership's potential and the expanding commercial potential of Omni One across defense, enterprise, and healthcare sectors.
• The tone is focused on long-term value creation through a multi-use platform strategy and inorganic growth.

Other Key Points

• Sirica Therapeutics plans to establish approximately 100 treatment centers nationwide using Virtuix systems.
• Delivery of the U.S. Marine Corps Infantry Fireteam Trainer pilot system to Quantico, VA, is expected in the fourth calendar quarter of 2026.
• The company's special committee is actively reviewing acquisition opportunities in the defense sector.
• Stock-based compensation expense increased significantly to $722,937 from $10,897 in the prior year.
• Financing expense of $584,150 was recognized related to warrant amendments.
• Loss on extinguishment of debt was $431,224 compared to $122,864 in the prior year.