VirTra Reports Second Quarter and Six Months 2025 Financial Results

Rhea-AI Summary

VirTra (Nasdaq: VTSI), a provider of law enforcement and military training simulators, reported its Q2 2025 financial results with revenue increasing 15% year-over-year to $7.0 million. For the six-month period, revenue grew 5% to $14.1 million.

Q2 2025 highlights include bookings of $4.6 million, up from $3.6 million in Q2 2024, and a strong backlog of $18.8 million. The company maintained a robust working capital position of $34.1 million and cash balance of $20.7 million. The STEP® recurring revenue program achieved approximately 95% renewal rates, with customers increasingly adopting three-year agreements.

While gross margins decreased to 69% in Q2 2025 from 91% in Q2 2024, the company remained profitable with net income of $0.2 million ($0.02 per diluted share) and Adjusted EBITDA of $0.7 million.

Positive

• Revenue growth of 15% year-over-year in Q2 2025
• Strong bookings of $4.6 million, up from $3.6 million in Q2 2024
• Robust working capital position of $34.1 million with $20.7 million in cash
• High STEP program renewal rate of 95% with transition to three-year agreements
• Solid backlog of $18.8 million across diverse contract types
• Maintained debt-light balance sheet supporting growth strategy

Negative

• Gross margin declined to 69% from 91% year-over-year in Q2
• Net income decreased to $0.2 million from $1.2 million in Q2 2024
• Adjusted EBITDA declined to $0.7 million from $1.6 million year-over-year
• Persistent federal funding uncertainty affecting order timing

Insights

Financial Analyst

VirTra delivers 15% Q2 revenue growth with positive profits despite margin pressure, demonstrating resilience amid federal funding challenges.

VirTra's Q2 results paint a picture of resilient growth amid funding headwinds. The 15% year-over-year revenue increase to $7.0 million demonstrates the company's ability to execute despite persistent federal funding uncertainty. However, beneath this headline growth are some important nuances.

The most notable concern is the significant gross margin compression, which fell to 69% from an unusually high 91% in Q2 2024. This dramatic decline explains why net income dropped to just $0.2 million despite higher revenue. Management attributes this to last year's margin being artificially inflated by capitalized labor costs for development programs and a more favorable revenue mix.

The bookings growth from $3.6 million to $4.6 million year-over-year is encouraging, though the sequential slowdown suggests lumpy demand patterns. The $18.8 million backlog provides decent revenue visibility, with a balanced composition across capital equipment, services, and STEP contracts.

The STEP recurring revenue program maintains impressive 95% renewal rates, with customers increasingly converting to three-year agreements - a positive sign for revenue stability and predictability. This recurring revenue component helps offset the cyclicality of capital equipment sales.

From a balance sheet perspective, VirTra remains in excellent condition with $20.7 million in cash and $34.1 million in working capital against minimal debt. This financial flexibility is crucial as the company navigates uncertain funding cycles.

The reopening of the Department of Justice COPS grant program represents a potential catalyst, as law enforcement agencies regain access to funding streams that could accelerate simulator purchases. Management's commentary suggests bookings activity should improve as 2025 ends and funding conditions normalize.

While top-line growth remains solid, investors should monitor gross margin trends and the pace of federal funding improvements, which will ultimately determine whether VirTra can return to stronger profitability levels in coming quarters.

Second Quarter Revenue Increases 15% Year-Over-Year; Six-Month Revenue Up 5%

Delivers Continued Positive Net Income and Strong Gross Margins as Federal Funding Trends Improve

CHANDLER, Ariz., Aug. 11, 2025 (GLOBE NEWSWIRE) -- VirTra, Inc. (Nasdaq: VTSI) (“VirTra” or the “Company”), a global provider of judgmental use of force training simulators and firearms training simulators for the law enforcement and military markets, reported results for the second quarter and six months ended June 30, 2025. The financial statements are available on VirTra’s website and here.

Second Quarter 2025 and Recent Operational Highlights:

• Second quarter bookings of $4.6 million rose from $3.6 million in Q2 2024 and contributed to $32.1 million over the last twelve months, reflecting sustained demand across law enforcement and military customers despite persistent federal funding uncertainty.
• Backlog totaled $18.8 million as of June 30, 2025, including $7.1 million in Capital, $5.7 million in Service, and $6.0 million in STEP contracts.
• STEP® recurring revenue program maintained renewal rates around 95%, with a growing portion of customers converting to new three-year agreements. These updated terms better align with technology refresh cycles and provide VirTra with earlier renewal opportunities.
• Maintained robust working capital at $34.1 million, positioning the Company for sustained growth and operational agility.

Second Quarter and Six Month 2025 Financial Highlights:
	For the Three Months Ended							For the Six Months Ended
All figures in millions, except per share data	June 30, 2025		June 30, 2024		% Δ			June 30, 2025		June 30, 2024		% Δ
Total Revenue	$7.0		$6.1		15%			$14.1		$13.4		5%
Gross Profit	$4.8		$5.5		-13%			$10.0		$10.2		-2%
Gross Margin	69%		91%		N/A			71%		76%		N/A
Net Income	$0.2		$1.2		N/A			$1.4		$1.7		N/A
Diluted EPS	$0.02		$0.11		N/A			$0.13		$0.15		N/A
Adjusted EBITDA	$0.7		$1.6		N/A			$2.4		$2.9		N/A
*The column for the six months ended June 30, 2024 reflects restated financials.

Management Commentary

VirTra CEO John Givens stated, “In the second quarter, VirTra delivered year-over-year growth in both revenue and bookings in the second quarter, along with continued profitability and a strong cash position. While bookings were lighter sequentially, this primarily reflected timing of orders and the pace of federal funding, with activity expected to improve as we exit the year and move into 2026. The recent reopening of the Department of Justice COPS grant program is a positive development, and we are seeing agencies re-engage as they pursue available funding. We’ve been working to help policymakers understand the value of immersive training and to support funding initiatives that benefit our customers. These efforts, together with broader improvements in the funding environment, should help stimulate demand through the remainder of 2025 and into 2026.

“Operationally, we continue to run the business with discipline, consistently improving product quality while controlling costs. Customers are recognizing the durability and performance of our hardware, which, along with our operational efficiencies, allows us to remain highly competitive on pricing. These efforts position us to respond effectively as funding conditions improve and demand strengthens.”

Six Months 2025 Financial Results

Note: Financials for the first six months of 2024 presented below reflect a restatement made in Q4 2024 to adjust the timing of revenue recognition associated with a 2021 international sale.

Total revenue for the first six months was $14.1 million, compared to $13.4 million in the prior year period. The 5% increase was primarily driven by higher capital system deliveries, supported by stable recurring revenue from STEP and service contracts.

Gross profit for the first six months was $10.0 million (71% of total revenue), compared to $10.2 million (76% of total revenue) in the prior year period. The change in gross margin reflects a higher mix of capital sales relative to service and STEP revenue. The prior year period benefitted from unusually high gross margins due to capitalized labor related to the development of the V-XR and IVAS programs, as well as a greater mix of high-margin service and STEP revenue.

Net operating expense for the first six months was $7.7 million, a 9% decrease from $8.5 million in the prior year period, reflecting disciplined cost management while maintaining investment in core growth initiatives.

Operating income for the first six months was $2.3 million, compared to $1.8 million in the prior year period.

Net income for the first six months was $1.4 million, or $0.13 per diluted share, compared to $1.7 million, or $0.15 per diluted share, in the prior year period.

Adjusted EBITDA, a non-GAAP metric, was $2.4 million for the first six months of 2025, compared to $2.9 million in the prior year period.

Second Quarter 2025 Financial Results

Total revenue for the second quarter of 2025 was $7.0 million, compared to $6.1 million in the prior year period. The 15% increase was primarily driven by higher capital deliveries and stable recurring revenue from STEP and service contracts.

Gross profit for the second quarter was $4.8 million (69% of total revenue), compared to $5.5 million (91% of total revenue) in the prior year period. The prior year quarter benefited from unusually low cost of sales related to capitalized development work.

Net operating expense for the second quarter was $3.9 million, an 11% decrease from $4.4 million in the prior year period, reflecting ongoing cost discipline.

Operating income for the second quarter was $0.9 million compared to $1.1 million in the prior year period.

Net income for the second quarter was $0.2 million, or $0.02 per diluted share, compared to $1.2 million, or $0.11 per diluted share, in the prior year period.

Adjusted EBITDA, a non-GAAP metric, was $0.7 million for the second quarter, compared to $1.6 million in the prior year period.

Cash and cash equivalents were $20.7 million at June 30, 2025, compared to $17.6 million at March 31, 2025. Working capital was $34.1 million, and the Company maintained a debt-light balance sheet, positioning it well for near- and long-term execution.

Financial Commentary

CFO Alanna Boudreau stated, “Our first half results were highlighted by continued strong gross margins and cost discipline. Backlog remains solid at $18.8 million, supported by a balanced mix of capital, service, and STEP contracts. International markets remain an attractive avenue for growth, and we continue to pursue multiple active opportunities. With a strong balance sheet, VirTra maintains the financial strength and flexibility to support our growth strategy and navigate the timing of government funding cycles.”

Conference Call

VirTra’s management will hold a conference call today (August 11, 2025) at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss these results. VirTra’s Chief Executive Officer John Givens and Chief Financial Officer Alanna Boudreau will host the call, followed by a question-and-answer period.

U.S. dial-in number: 1-877-407-9208
International number: 1-201-493-6784
Conference ID: 13754706

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Investor Relations at 949-574-3860.

The conference call will be broadcast live and available for replay here and via the investor relations section of the Company’s website.

A replay of the call will be available after 7:30 p.m. Eastern time on the same day through August 25, 2025.

Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 13754706

About VirTra, Inc.
VirTra (Nasdaq: VTSI) is a global provider of judgmental use of force training simulators, firearms training simulators for the law enforcement, military, educational and commercial markets. The company’s patented technologies, software, and scenarios provide intense training for de-escalation, judgmental use-of-force, marksmanship, and related training that mimics real-world situations. VirTra’s mission is to save and improve lives worldwide through practical and highly effective virtual reality and simulator technology. Learn more about the company at www.VirTra.com.

About the Presentation of Adjusted EBITDA
Adjusted earnings before interest, income taxes, depreciation, and amortization and before other non-operating costs and income (“Adjusted EBITDA”) is a non-GAAP financial measure. Adjusted EBITDA also includes non-cash stock option expense and other than temporary impairment loss on investments. Other companies may calculate Adjusted EBITDA differently. VirTra calculates its Adjusted EBITDA to eliminate the impact of certain items it does not consider to be indicative of its performance and its ongoing operations. Adjusted EBITDA is presented herein because management believes the presentation of Adjusted EBITDA provides useful information to VirTra’s investors regarding VirTra’s financial condition and results of operations and because Adjusted EBITDA is frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in VirTra’s industry, several of which present a form of Adjusted EBITDA when reporting their results. Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of VirTra’s results as reported under accounting principles generally accepted in the United States of America (“GAAP”). Adjusted EBITDA should not be considered as an alternative for net income, cash flows from operating activities and other consolidated income or cash flows statement data prepared in accordance with GAAP or as a measure of profitability or liquidity. A reconciliation of net income to Adjusted EBITDA is provided in the following tables:

		For the Three Months Ended															For the Six Months Ended
																	(Restated)
		June 30,				June 30,				Increase				%			June 30,				June 30,				Increase				%
		2025				2024				(Decrease)				Change			2025				2024				(Decrease)				Change
Net Income (Loss)		$	175,314			$	1,200,727			$	(1,025,413	)		-85%			$	1,439,375			$	1,668,923			$	(229,548	)			-14%
Adjustments:
Provision for income taxes			(9,000	)			87,564			$	(96,564	)		-110%				93,000				599,000			$	(506,000	)			-84%
Depreciation and amortization			513,693				288,777			$	224,916			310%				830,333				525,570			$	304,763				186%
Interest (net)			(26,876	)			(34,379	)		$	7,503			-22%				(48,127	)			(88,957	)		$	40,830				-46%
EBITDA		$	653,131			$	1,542,689			$	(889,558	)		-14%			$	2,314581			$	2,704,536			$	281,038	)			-10%
Right of use amortization			42,501				69,418			$	(26,917	)						84,365				199,493				(389,955	)
Adjusted EBITDA		$	695,632			$	1,612,107			$	(916,475	)		-57%			$	2,398,946			$	2,904,029			$	(505,083	)			3%

Forward-Looking Statements

The information in this discussion contains forward-looking statements and information within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are subject to the “safe harbor” created by those sections. The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “should,” “could,” “predicts,” “potential,” “continue,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. The forward-looking statements are applicable only as of the date on which they are made, and we do not assume any obligation to update any forward-looking statements. All forward-looking statements in this document are made based on our current expectations, forecasts, estimates and assumptions, and involve risks, uncertainties and other factors that could cause results or events to differ materially from those expressed in the forward-looking statements. In evaluating these statements, you should specifically consider various factors, uncertainties and risks that could affect our future results or operations. These factors, uncertainties and risks may cause our actual results to differ materially from any forward-looking statement set forth in the reports we file with or furnish to the Securities and Exchange Commission (the “SEC”). You should carefully consider these risks and uncertainties described and other information contained in the reports we file with or furnish to the SEC before making any investment decision with respect to our securities. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by this cautionary statement.

Investor Relations Contact:

Matt Glover and Alec Wilson
Gateway Group, Inc.
VTSI@gateway-grp.com
949-574-3860

- Financial Tables to Follow -
VIRTRA, INC.
CONDENSED BALANCE SHEETS
		June 30, 2025				December 31, 2024
		(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents		$	20,697,354			$	18,040,827
Accounts receivable, net			6,447,542				8,005,452
Inventory, net			12,806,733				14,583,400
Unbilled revenue			1,587,422				2,570,441
Prepaid expenses and other current assets			2,610,223				1,273,115
Total current assets			44,149,274				44,473,235
Long-term assets:
Property and equipment, net			16,451,233				16,204,663
Operating lease right-of-use asset, net			352,730				437,095
Intangible assets, net			2,744,180				558,651
Security deposits, long-term			15,979				35,691
Other assets, long-term			148,177				148,177
Deferred tax asset, net			3,508,399				3,595,574
Total long-term assets			23,220,698				20,979,851
Total assets		$	67,369,972			$	65,453,086
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	1,034,497			$	957,384
Accrued compensation and related costs			1,005,621				1,253,544
Accrued expenses and other current liabilities			554,006				657,114
Note payable, current			227,849				230,787
Operating lease liability, short-term			194,917				192,410
Deferred revenue, short-term			7,011,943				6,355,316
Total current liabilities			10,028,833				9,646,555
Long-term liabilities:
Deferred revenue, long-term			2,381,845				2,282,996
Note payable, long-term			7,441,512				7,567,536
Operating lease liability, long-term			174,696				265,111
Other long-term liabilities			-				-
Total long-term liabilities			9,998,053				10,115,643
Total liabilities			20,026,886				19,762,198
Commitments and contingencies (See Note 9)
Stockholders’ equity:
Preferred stock $0.0001 par value; 2,500,000 authorized; no shares issued or outstanding			-
Common stock $0.0001 par value; 50,000,000 shares authorized; 11,261,588 shares issued and outstanding as of June 30, 2025, and 11,255,709 shares issued and outstanding as of December 31, 2024			1,126				1,125
Class A common stock $0.0001 par value; 2,500,000 shares authorized; no shares issued or outstanding			-
Class B common stock $0.0001 par value; 7,500,000 shares authorized; no shares issued or outstanding			-
Additional paid-in capital			33,127,935				32,915,112
Retained Earnings			14,214,025				12,774,651
Total stockholders’ equity			47,343,086				45,690,888
Total liabilities and stockholders’ equity		$	67,369,972			$	65,453,086

VIRTRA, INC.
CONDENSED STATEMENTS OF OPERATIONS
		Three Months Ended								Six Months Ended
		June 30, 2025				June 30, 2024				June 30, 2025				June 30, 2024
														(Restated)
Revenues:
Net sales		$	6,978,938			$	6,075,040			$	14,139,185			$	13,421,461
Total revenue			6,978,938				6,075,040				14,139,185				13,421,461
Cost of sales			2,166,461				550,424				4,129,828				3,182,682
Gross profit			4,812,477				5,524,616				10,009,357				10,238,779
Operating expenses:
General and administrative			3,289,995				3,537,910				6,509,945				6,908,332
Research and development			608,116				855,285				1,217,243				1,548,665
Net operating expense			3,898,111				4,393,195				7,727,188				8,456,997
Income (loss) from operations			914,366				1,131,421				2,282,169				1,781,782
Other income (expense):
Other income			77,873				156,870				149,883				486,141
Gain on forgiveness of note payable			-								-				-
Other (expense) income			(825,925	)			-				(899,677	)			-
Net other income (expense)			(748,052	)			156,870				(749,794	)			486,141
Income (Loss) before provision for income taxes			166,314				1,288,291				1,532,375				2,267,923
Provision (Benefit) for income taxes			(9,000	)			87,564				93,000				599,000
Net income (loss)		$	175,314			$	1,200,727			$	1,439,375			$	1,668,923
Net income (loss) per common share:
Basic		$	0.02			$	0.11			$	0.13			$	0.15
Diluted		$	0.02			$	0.11			$	0.13			$	0.15
Weighted average shares outstanding:
Basic			11,261,588				11,063,366				11,260,902				10,885,964
Diluted			11,261,588				11,065,866				11,260,902				10,885,964

VIRTRA, INC.
CONDENSED STATEMENTS OF CASH FLOWS
		Six Months Ended June 30
		2025				2024
						(Restated)
Cash flows from operating activities:
Net income		$	1,439,375			$	1,668,923
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Depreciation and amortization			829,841				525,077
Right of use amortization			84,365				197,312
Employee stock compensation			212,823				352,005
Changes in operating assets and liabilities:
Accounts receivable, net			1,557,910				7,347,700
Inventory, net			1,776,667				(1,065,835	)
Deferred taxes			87,175				(149,958	)
Unbilled revenue			983,019				(280,044	)
Prepaid expenses and other current assets			(1,337,108	)			(1,046,213	)
Other assets			19,712				-
Accounts payable and other accrued expenses			(273,918	)			(4,967,236	)
Operating lease right of use			(87,907	)			(207,208	)
Deferred revenue			755,476				(1,106,299	)
Net cash provided by operating activities			6,047,430				1,268,224
Cash flows from investing activities:
Internal intangible assets			(2,265,489	)			-
Purchase of property and equipment			(996,452	)			(1,608,798	)
Net cash (used in) investing activities			(3,261,941	)			(1,608,798	)
Cash flows from financing activities:
Principal payments of debt			(128,962	)			(117,785	)
Stock issued for options exercised			-				20,151
Net cash (used in) financing activities			(128,962	)			(97,634	)
Net increase (decrease) in cash			2,656,527				(438,208	)
Cash and restricted cash, beginning of period			18,040,827				18,849,842
Cash and restricted cash, end of period		$	20,697,354			$	18,411,634
Supplemental disclosure of cash flow information:
Income taxes paid (refunded)		$	720,951			$	5,314,387
Interest paid		$	116,415			$	84,403

FAQ

What were VirTra's (VTSI) Q2 2025 earnings results?

VirTra reported Q2 2025 revenue of $7.0 million (up 15% YoY), net income of $0.2 million ($0.02 per diluted share), and Adjusted EBITDA of $0.7 million.

What is VirTra's (VTSI) current backlog as of Q2 2025?

VirTra's backlog totaled $18.8 million as of June 30, 2025, consisting of $7.1 million in Capital, $5.7 million in Service, and $6.0 million in STEP contracts.

How much cash does VirTra (VTSI) have on its balance sheet?

As of June 30, 2025, VirTra had $20.7 million in cash and cash equivalents, up from $17.6 million at March 31, 2025, with working capital of $34.1 million.

What is VirTra's (VTSI) STEP program renewal rate?

VirTra's STEP recurring revenue program maintained approximately 95% renewal rates, with customers increasingly converting to new three-year agreements.

How did VirTra's (VTSI) gross margins change in Q2 2025?

Gross margins decreased to 69% in Q2 2025 from 91% in Q2 2024, primarily due to a higher mix of capital sales and the prior year benefiting from capitalized development work.