Financial Data and Key Metrics Changes - Net revenue for Q2 2025 was $28.5 million, a 41% increase from $20.3 million in Q2 2024, driven by the launch of the compact launcher and increased sales [5][6] - Gross profit for Q2 2025 was $17.6 million, maintaining a gross margin of 62%, compared to $12.6 million and 62% in Q2 2024 [6] - Net income for Q2 2025 was $2.4 million, up from $2.1 million in Q2 2024, attributed to increased product sales [7][8] - Adjusted EBITDA for Q2 2025 totaled $4.3 million, compared to $2.8 million in Q2 2024 [8] - Cash and cash equivalents decreased to $13 million from $25.7 million at the end of Q4 2024, reflecting planned inventory increases [9] Business Line Data and Key Metrics Changes - Direct-to-consumer revenues increased by $2.2 million through verna.com and amazon.com compared to the prior year [6] - Sales to dealers increased by $3.9 million or 106%, largely due to initial stocking orders for Sportsman's Warehouse [6][12] Market Data and Key Metrics Changes - International sales reached $2.6 million, an 86% increase from the prior year, including a one-time bump in royalties from partners [19] - The company is expanding its presence in new markets, including farming and ranching, with new chains testing Berna products [16] Company Strategy and Development Direction - The company plans to introduce Burnet Care, a recurring revenue model for replacing lost or damaged launchers [23] - The strategy includes expanding the number of stores carrying Berna products and increasing the range of products offered [17][30] - The company is focusing on enhancing its marketing efforts, including partnerships with celebrity influencers [21][22] Management's Comments on Operating Environment and Future Outlook - Management noted a slowdown in consumer spending but expects continued growth due to increased distribution channels and product normalization [10][30] - The company anticipates a growth rate of 25% to 40% for the year, despite some market softness [36][37] Other Important Information - The compact launcher has better margins and is expected to drive sales growth, with production adjusted to meet demand [28][29] - The company is shifting to a more efficient assembly pod-based manufacturing system to improve quality and reduce labor requirements [29][30] Q&A Session Summary Question: June trends and growth expectations - Management observed a 40% sales increase during civil unrest in June but noted it was a transitory trend, with a sustained growth expectation of 25% to 40% for the year [34][36] Question: Softness in the market - Management indicated signs of softness, including higher abandoned cart rates and sticker shock at checkout, but expects significant growth despite seasonal slowdowns [40][41] Question: Expansion with Sportsman's Warehouse - Management clarified that there are currently 22 store-within-a-store locations, with plans to increase to 33, and noted that some point-of-sale locations are outperforming shooting pods [42][45] Question: Channel mix evolution - Management expects brick-and-mortar sales to grow faster than online sales, with Amazon continuing to outpace Berna's direct sales [51][54] Question: Recurring revenue model - The upcoming Burnet Care will function like an insurance policy, allowing customers to pay a monthly fee for coverage on their launchers [65][66] Question: Performance of Scottsdale store - The Scottsdale store's success is attributed to its prime location, high traffic, and effective sales personnel, indicating a strong market fit [74][76]

Revenue Growth - Byrna Technologies reported preliminary fiscal second quarter revenues of $28.5 million, a 41% increase from $20.3 million in the same quarter last year[3]. - E-commerce sales grew by 15% year-over-year, reflecting increased brand recognition and a balanced channel mix[4]. - Dealer sales surged 106% year-over-year to $7.5 million, driven by a partnership with Sportsman's Warehouse[5]. - International sales increased by 86%, including approximately $800,000 in royalty revenue from Byrna LATAM[6]. - Byrna's total sales breakdown for Q2 2025 included $16.6 million from web sales, $7.5 million from dedicated dealers, and $3.6 million from international sales[9]. Production and Manufacturing - Byrna produced 38,237 Compact Launchers in the quarter, contributing to a total of 63,835 launchers manufactured[6]. - The company plans to transition to a steady-state production cadence of 15,000 launchers per month[8]. Future Outlook - The company anticipates maintaining momentum through the second half of 2025, supported by the CL launch and expanded marketing efforts[8]. - Byrna plans to report full financial results for the fiscal second quarter in July, accompanied by a conference call for investors and analysts[10]. Risk Management - The company emphasizes the importance of addressing potential risks that could affect future performance, including supply chain disruptions and market responses[13].

PART I – FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) The company reported significant revenue growth for the three and six months ended May 31, 2025, with net income reaching $2.4 million and $4.1 million, respectively, while cash and cash equivalents decreased significantly due to negative operating cash flow. [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) - Key changes from November 30, 2024, to May 31, 2025, include a **$9.8 million decrease in cash and cash equivalents**, a **$12.3 million increase in inventory**, and a **$3.9 million increase in accounts receivable**[8](index=8&type=chunk) Balance Sheet Highlights (in thousands) | Balance Sheet Items | May 31, 2025 (Unaudited) | November 30, 2024 | | :--- | :--- | :--- | | **Current Assets** | | | | Cash and cash equivalents | $7,001 | $16,829 | | Accounts receivable, net | $6,536 | $2,630 | | Inventory, net | $32,286 | $19,972 | | Total current assets | $55,738 | $50,958 | | **Total Assets** | **$77,450** | **$71,922** | | **Total Liabilities** | **$17,314** | **$17,553** | | **Total Stockholders' Equity** | **$60,136** | **$54,369** | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) - Net revenue grew **40.6% YoY** for the second quarter and **48.1% YoY** for the first six months of fiscal 2025[9](index=9&type=chunk) Statement of Operations Highlights (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Revenue | $28,505 | $20,269 | $54,695 | $36,923 | | Gross Profit | $17,564 | $12,560 | $33,488 | $22,199 | | Income from Operations | $3,326 | $1,913 | $5,022 | $1,749 | | Net Income | $2,427 | $2,077 | $4,089 | $2,094 | | Diluted EPS | $0.10 | $0.09 | $0.17 | $0.09 | [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) - The significant cash outflow from operations in H1 2025 was primarily driven by a **$12.3 million increase in inventory** and a **$3.9 million increase in accounts receivable**, despite a net income of **$4.1 million**[11](index=11&type=chunk) Cash Flow Summary for the Six Months Ended May 31 (in thousands) | Cash Flow Category | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash (Used in) Provided by Operating Activities | $(9,235) | $5,875 | | Net Cash Used in Investing Activities | $(590) | $(693) | | Net Cash Provided by (Used in) Financing Activities | $93 | $(925) | | **Net (Decrease) Increase in Cash** | **$(9,828)** | **$4,290** | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's accounting policies and provide further information on financial statement items, including revenue drivers, a joint venture sale, increased advertising, and a stock buyback program. - The company specializes in non-lethal self-defense launchers and accessories, sold primarily through e-commerce and retail channels in the United States, operating manufacturing facilities in Indiana and South Africa[16](index=16&type=chunk) - In August 2024, the company sold its **51% stake** in the Byrna LATAM joint venture and entered into an exclusive licensing agreement, generating **$0.8 million in royalty revenue** in Q2 2025[34](index=34&type=chunk) - Advertising costs increased to **$7.9 million** for the six months ended May 31, 2025, up from **$5.3 million** in the prior-year period[36](index=36&type=chunk) - As of May 31, 2025, one customer accounted for approximately **37% of the total accounts receivable balance**[95](index=95&type=chunk) [Management's Discussion and Analysis (MD&A)](index=26&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes strong revenue growth to a new marketing strategy, leading to increased sales across channels and improved gross margin, despite a significant use of cash for operations to fund working capital. [Overview](index=26&type=section&id=Overview) - The company's core mission is to provide innovative non-lethal security solutions for both civilian self-defense and professional law enforcement/private security markets[101](index=101&type=chunk)[102](index=102&type=chunk) - On July 31, 2024, the Board approved a stock buyback program of up to **$10 million** to return capital to shareholders and offset dilution from stock-based awards[105](index=105&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) - The **48.1% revenue increase** for the first six months of 2025 is attributed to a new marketing strategy implemented in September 2023, which shifted advertising from social media to celebrity endorsers[117](index=117&type=chunk)[118](index=118&type=chunk) - Gross margin for H1 2025 increased to **61.2%** from **60.1%** in H1 2024, driven by higher production volume, better absorption of fixed costs, and reduced reliance on price discounts[120](index=120&type=chunk) Revenue Growth Analysis (Q2 2025 vs Q2 2024) | Channel | Q2 2025 Revenue (M) | Q2 2024 Revenue (M) | Growth (%) | | :--- | :--- | :--- | :--- | | **Total Net Revenue** | **$28.5** | **$20.3** | **40.6%** | | Direct to Customer | $16.6 | $14.8 | 12.2% | | Domestic Dealers/Retailers | $8.4 | $3.8 | 121.1% | Non-GAAP Adjusted EBITDA Reconciliation (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $2,427 | $2,077 | $4,089 | $2,094 | | **Adjusted EBITDA** | **$4,300** | **$2,780** | **$7,069** | **$3,799** | [Liquidity and Capital Resources](index=32&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) - Cash and cash equivalents decreased by **$9.8 million** during the first six months of fiscal 2025, from **$16.8 million to $7.0 million**[130](index=130&type=chunk) - Cash used in operating activities was **$9.2 million** for H1 2025, a significant shift from **$5.9 million cash provided by operations** in H1 2024, mainly due to a **$12.3 million increase in inventory** and a **$3.9 million increase in accounts receivable**[131](index=131&type=chunk)[132](index=132&type=chunk) - Capital expenditures were higher than typical in H1 2025 due to the build-out of retail stores and a new ammunition manufacturing facility, but are expected to decrease in the second half of the year[133](index=133&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section is not applicable as per the report. [Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of May 31, 2025, with no material changes to internal controls over financial reporting during the quarter. - The CEO and CFO concluded with reasonable assurance that the company's disclosure controls and procedures were effective as of May 31, 2025[140](index=140&type=chunk) - No changes occurred during the second quarter of 2025 that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[141](index=141&type=chunk) PART II – OTHER INFORMATION [Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) The company is occasionally involved in various legal proceedings but believes any liability from current proceedings would not materially adversely affect its financial condition. - The company states that at this time, any liability from pending legal proceedings would not have a material adverse effect on its business or financial condition[143](index=143&type=chunk) [Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors disclosed in the company's 2024 Form 10-K, though the report highlights the potential impact of tariffs, sanctions, and other trade barriers. - There have been no material changes to the risk factors previously disclosed in the Annual Report on Form 10-K for the fiscal year ended November 30, 2024[144](index=144&type=chunk) - The company specifically notes risks related to tariffs, sanctions, and trade barriers, which could affect component imports, raise prices, and harm operating performance, and is actively reviewing sourcing options to mitigate these risks[145](index=145&type=chunk) [Issuer Purchases of Equity Securities](index=35&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company has a stock buyback program, approved on July 31, 2024, for up to $10 million, and repurchased 3,927 shares for approximately $55,000 during the three months ended May 31, 2025. - The stock buyback program, approved on July 31, 2024, authorizes up to **$10 million** in repurchases over two years[146](index=146&type=chunk) Share Repurchases in Q2 2025 | Period | Number of Shares Purchased | Average Cost per Share | Approximate Dollar Value of Shares that May Yet Be Purchased | | :--- | :--- | :--- | :--- | | March 2025 | 0 | $— | $6,500,000 | | April 2025 | 3,927 | $14.0 | $6,445,000 | | May 2025 | 0 | $— | $6,445,000 | | **Total** | **3,927** | **$14.0** | | [Other Information](index=36&type=section&id=Item%205.%20Other%20Information) During the quarter, two insiders, Northeast Industrial Partners LLP (an entity associated with CEO Bryan Ganz) and Herbert Hughes, adopted Rule 10b5-1 trading plans to sell shares of common stock. - In April 2025, Northeast Industrial Partners LLP (related to CEO Bryan Ganz) and director Herbert Hughes adopted Rule 10b5-1 trading arrangements to sell up to **100,000** and **15,000 shares**, respectively, starting in July 2025[150](index=150&type=chunk)

Core Insights - Byrna Technologies Inc. reported a record revenue of $28.5 million for Q2 2025, representing a 41% year-over-year growth from $20.3 million in Q2 2024, driven by the launch of the Compact Launcher (CL) and a 106% increase in dealer sales due to a partnership with Sportsman's Warehouse [1][3][9] Financial Performance - Net revenue for Q2 2025 was $28.5 million, up from $20.3 million in Q2 2024, marking a 41% increase [3] - Gross profit increased to $17.6 million, maintaining a gross margin of 62%, compared to $12.6 million in Q2 2024 [4] - Operating expenses rose to $14.2 million from $10.6 million in Q2 2024, primarily due to higher selling expenses and marketing costs [5] - Net income for Q2 2025 was $2.4 million, an increase from $2.1 million in Q2 2024 [5] - Adjusted EBITDA for Q2 2025 was $4.3 million, compared to $2.8 million in Q2 2024 [6] Cash and Inventory Management - Cash, cash equivalents, and marketable securities totaled $13.0 million as of May 31, 2025, down from $25.7 million at November 30, 2024, due to increased inventory ahead of the CL release [7] - Inventory at May 31, 2025, was $32.3 million, up from $20.0 million at November 30, 2024 [7] Operational Highlights - The launch of the Byrna CL in May contributed significantly to revenue growth, with expectations for it to become a larger part of the sales mix [8][14] - Dealer sales increased by 106% in Q2 2025, supported by the partnership with Sportsman's Warehouse, with plans to expand store-within-a-store locations [9][10] - Company-owned retail locations averaged $69,000 in sales during May, with the Scottsdale location performing exceptionally well shortly after opening [11] Marketing and Brand Expansion - The company has diversified its marketing strategy, including the addition of celebrity influencer Tucker Carlson to enhance brand awareness [12] - Integration of AI tools into content production is expected to improve marketing reach and efficiency [12] Production Adjustments - Production has been adjusted to align with current demand following the CL launch, with a steady output of 15,000 units per month [13]

Core Insights - Byrna Technologies Inc. (NASDAQ: BYRN) has been a long-term investment for approximately 4½ years, indicating a commitment to the company despite market volatility [1] - The investment strategy combines fundamental analysis with momentum research, utilizing software to track market sentiment [1] - The focus is on identifying companies with a higher likelihood of surprising market expectations in the near term [1] Company Analysis - Byrna Technologies has experienced a rocky road over the years, suggesting challenges in its operational or market performance [1] - The investment approach aims to exploit discrepancies between market perceptions and actual outcomes, highlighting a strategic focus on potential undervaluation [1] Market Sentiment - The software developed by the analyst tracks levels of optimism and pessimism in stock prices, which is crucial for making informed investment decisions [1] - The strategy emphasizes the importance of understanding market sentiment to identify profitable investment opportunities [1]

Core Insights - Byrna Technologies Inc. reported preliminary Q2 results with revenues of $28.5 million, marking a 41% year-over-year increase [1] Financial Performance - The revenue growth of 41% indicates strong performance compared to the previous year [1]

Core Viewpoint - Byrna Technologies Inc. will hold a conference call on July 10, 2025, to discuss its financial results for the fiscal second quarter ended May 31, 2025 [1] Group 1: Conference Call Details - The conference call is scheduled for Thursday, July 10, 2025, at 9:00 a.m. Eastern time [2] - Participants can join the call using a toll-free dial-in number or an international dial-in number, with a conference ID provided [2] - The call will be broadcast live and available for replay on Byrna's website [3] Group 2: Company Overview - Byrna Technologies specializes in developing, manufacturing, and selling innovative less-lethal personal security solutions [4] - The company produces the Byrna SD personal security device, which is a handheld CO2 powered launcher designed as a less-lethal alternative to firearms [4] - Byrna's products are targeted at consumers, private security, and law enforcement markets [4]

Company Overview - Byrna has sold over 500,000 launchers in the last 5 years[18] - The company has over 500 dealer locations[18] - Byrna has 180 US employees[18] Market Opportunity - The US consumer market presents a total addressable market of $250 billion, divided between gun owners ($100 billion) and non-gun owners ($150 billion)[22] - The company is targeting a penetration of 5% of non-gun owners and 10% of gun owners, representing a potential market of approximately $17.5 billion[22] - The company has 285,000 unique e-commerce customers[20] Financial Performance - The company's revenue increased from $42.644 million in 2023 to $85.756 million in 2024[45] - Gross profit increased from $23.647 million in 2023 to $52.772 million in 2024[45] - The company achieved net income of $12.792 million in 2024, compared to a net loss of $8.192 million in 2023[45] - Adjusted EBITDA increased from a loss of $2.001 million in 2023 to a profit of $11.478 million in 2024, representing an Adjusted EBITDA margin of 13.4%[45] - Total DTC orders increased by 72% from $14.707 million in Q4 2023 to $25.289 million in Q4 2024[40] - Total revenue increased by 79% from $15.640 million in Q4 2023 to $27.979 million in Q4 2024[40] Growth Strategy - The company is expanding its retail presence with flagship stores, including locations in Scottsdale, AZ, Franklin, TN, and Salem, NH, with a Las Vegas store already generating over $1 million in revenue with a 30% contribution margin[43]

Core Viewpoint - Byrna Technologies Inc. (BYRN) has seen a 16.8% increase in share price over the past four weeks, closing at $28.79, with a potential upside of 26.8% based on Wall Street analysts' mean price target of $36.50 [1] Group 1: Price Targets and Analyst Estimates - The mean price target consists of three short-term estimates with a standard deviation of $3.12, indicating a range of potential outcomes; the lowest estimate suggests a 14.6% increase to $33, while the highest predicts a 35.5% surge to $39 [2] - Analysts' consensus on earnings estimates has improved, with a positive trend in revisions indicating potential upside for BYRN, as historical data shows a strong correlation between earnings estimate revisions and stock price movements [4][11] - The Zacks Consensus Estimate for the current year has increased by 1.5% due to one upward revision and no negative revisions in the last 30 days, reflecting growing optimism among analysts [12] Group 2: Analyst Behavior and Price Target Reliability - Analysts often set overly optimistic price targets due to business incentives, which can mislead investors; empirical research suggests that price targets rarely indicate actual stock price movements [7][8] - A low standard deviation in price targets indicates a high degree of agreement among analysts regarding the stock's price direction, serving as a starting point for further research into fundamental drivers [9] - While price targets should not be the sole basis for investment decisions, they can provide useful directional guidance when considered alongside other factors [10][13]

Core Viewpoint - Byrna Technologies Inc. (BYRN) is positioned well to potentially beat earnings estimates in its upcoming quarterly report, supported by a strong history of exceeding expectations [1]. Earnings Performance - Byrna Technologies has a notable track record of surpassing earnings estimates, with an average surprise of 245% over the last two quarters [2]. - In the most recent quarter, the company reported earnings of $0.07 per share against an expectation of $0.02, resulting in a surprise of 250% [2]. - For the previous quarter, Byrna's actual earnings were $0.17 per share compared to a consensus estimate of $0.05, leading to a surprise of 240% [2]. Earnings Estimates and Predictions - Recent earnings estimates for Byrna Technologies have been revised upward, indicating positive sentiment among analysts [5]. - The Zacks Earnings ESP (Expected Surprise Prediction) for Byrna is currently positive, suggesting a strong likelihood of an earnings beat [5][8]. - The company has an Earnings ESP of +55.56%, reflecting increased analyst optimism regarding its near-term earnings potential [8]. Zacks Rank and Predictive Power - Byrna Technologies holds a Zacks Rank of 2 (Buy), which, when combined with a positive Earnings ESP, enhances the probability of another earnings beat [8]. - Stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have historically produced positive surprises nearly 70% of the time [6]. Importance of Earnings ESP - The Earnings ESP metric compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate being more reflective of recent analyst revisions [7]. - A negative Earnings ESP does not necessarily indicate an earnings miss, but it does reduce predictive power [8].