VirTra, Inc. (NASDAQ:VTSI) shares are trading lower after the company reported worse-than-expected first-quarter financial results.

Revenue declined 19% year over year to $8.09 million, missing the consensus of $8.56 million due to delays in federal funding attributable to the U.S. government's continuing resolution, which caused numerous contracts to be placed on hold.

CEO John Givens stated, "The anticipated revenue fluctuation was primarily due to the cyclical nature of budget allocations, often skewed towards year-end, coupled with the impact of the U.S. government's continuing resolution, and the completion of a large portion of our capital backlog in 2023."

Gross profit declined 21% Y/Y to $5.5 million in the quarter due to cost increases from the Microsoft Corporation (NASDAQ:MSFT) contract.

Adjusted EBITDA stood at $1.9 million in the quarter vs. $4.0 million a year ago. EPS of $0.11 missed the consensus of $0.12.

As of March-end, cash and cash equivalents were $22.4 million.

CFO Alanna Boudreau stated, "Looking ahead, we remain focused on improving bookings performance and stabilizing backlog amidst order seasonality."

"With strategic initiatives underway, particularly the launch of V-XR, we are positioning ourselves to improve our revenue growth for the remainder of 2024 compared to Q1. Our robust working capital shows our financial strength and supports strategic initiatives, including scaled production of the V-XR."

Price Action: VTSI shares are down 30.8% at $11.36 at the last check Wednesday.

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