Byrna Technologies (BYRN) - 2025 Q3 - Quarterly Report

PART I – FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements This section presents the unaudited condensed consolidated financial statements, including the balance sheets, statements of operations and comprehensive income, cash flows, and changes in stockholders' equity, along with detailed notes explaining the company's accounting policies, operations, and financial instrument risks Condensed Consolidated Balance Sheets The balance sheet shows the company's financial position, with total assets increasing to $78,562 thousand and total stockholders' equity rising to $63,143 thousand as of August 31, 2025, compared to November 30, 2024 | Metric | August 31, 2025 (thousands) | November 30, 2024 (thousands) | | :-------------------------------- | :---------------------------- | :---------------------------- | | ASSETS | | | | Cash and cash equivalents | $6,495 | $16,829 | | Accounts receivable, net | $8,872 | $2,630 | | Inventory, net | $34,106 | $19,972 | | Marketable debt securities | $2,501 | $8,904 | | Total current assets | $57,376 | $50,958 | | Property and equipment, net | $6,780 | $3,408 | | Total assets | $78,562 | $71,922 | | LIABILITIES | | | | Total current liabilities | $13,619 | $15,438 | | Total liabilities | $15,419 | $17,553 | | STOCKHOLDERS' EQUITY | | | | Total Stockholders' Equity | $63,143 | $54,369 | Condensed Consolidated Statements of Operations and Comprehensive Income The company reported significant growth in net revenue and net income for both the three and nine months ended August 31, 2025, driven by increased sales and improved operational efficiency | Metric | Three Months Ended Aug 31, 2025 (thousands) | Three Months Ended Aug 31, 2024 (thousands) | Nine Months Ended Aug 31, 2025 (thousands) | Nine Months Ended Aug 31, 2024 (thousands) | | :----------------------------------- | :---------------------------------------- | :---------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Net revenue | $28,179 | $20,854 | $82,874 | $57,777 | | Cost of goods sold | $11,257 | $7,842 | $32,464 | $22,566 | | Gross profit | $16,922 | $13,012 | $50,410 | $35,211 | | Income from operations | $2,863 | $828 | $7,885 | $2,578 | | Net income | $2,235 | $1,025 | $6,324 | $3,120 | | Basic net income per share | $0.10 | $0.05 | $0.28 | $0.14 | | Diluted net income per share | $0.09 | $0.04 | $0.26 | $0.14 | Condensed Consolidated Statements of Cash Flows For the nine months ended August 31, 2025, the company experienced a net decrease in cash and cash equivalents, primarily due to cash used in operating activities, despite positive cash flow from investing and financing activities | Cash Flow Activity | Nine Months Ended Aug 31, 2025 (thousands) | Nine Months Ended Aug 31, 2024 (thousands) | | :------------------------------------------ | :--------------------------------------- | :--------------------------------------- | | Net cash (used in) provided by operating activities | $(11,503) | $4,479 | | Net cash provided by (used in) investing activities | $583 | $(1,382) | | Net cash provided by (used in) financing activities | $99 | $(3,924) | | Net (decrease) increase in cash and cash equivalents | $(10,334) | $(421) | | Cash and cash equivalents, end of period | $6,495 | $20,077 | Condensed Consolidated Statements of Changes in Stockholders' Equity Stockholders' equity increased from $54,369 thousand at November 30, 2024, to $63,143 thousand at August 31, 2025, primarily driven by net income and stock-based compensation, partially offset by treasury stock repurchases | Metric | November 30, 2024 (thousands) | August 31, 2025 (thousands) | | :-------------------------------- | :---------------------------- | :---------------------------- | | Total Stockholders' Equity | $54,369 | $63,143 | | Net income (9 months) | N/A | $6,324 | | Stock-based compensation (9 months) | N/A | $2,297 | | Repurchase of common stock (9 months) | N/A | $(55) | Notes to Condensed Consolidated Financial Statements These notes provide detailed explanations of the company's business operations, significant accounting policies, recent accounting guidance, and specific financial statement line items, offering context for the reported financial performance and position 1. Nature of Operations Byrna Technologies Inc. specializes in non-lethal self-defense products, selling primarily to consumers in the U.S. through e-commerce, Amazon, brick-and-mortar stores, and retailers, with manufacturing facilities in Indiana and a recently ceased operation in South Africa - Byrna Technologies Inc. focuses on next-generation alternatives to traditional firearms for self-defense and personal security, usable by consumers in all 50 states without a firearms license[14] - Sales channels include the company's e-commerce site, Amazon storefront, four company-owned brick-and-mortar locations, and other retailers, also serving private and public security officers[14] - The company operates manufacturing facilities in Fort Wayne, Indiana (30,000 sq ft and 10,000 sq ft), and a 20,000 sq ft facility in Pretoria, South Africa, which ceased manufacturing operations in Q3 2025[14] 2. Operations and Management Plans As of August 31, 2025, the company has an accumulated deficit of approximately $50.5 million but generated $6.3 million in net income for the nine months ended August 31, 2025, with future success dependent on continued capital generation or sufficient revenue to cover expenses and market products - As of August 31, 2025, the Company incurred an accumulated deficit of approximately $50.5 million[15] - The Company generated net income of $6.3 million for the nine months ended August 31, 2025[15] - Future success relies on the ability to raise sufficient capital or generate adequate revenues to cover ongoing operating expenses and profitably market products[15] 3. Basis of Presentation The unaudited condensed consolidated financial statements are prepared in accordance with Form 10-Q instructions and GAAP, reflecting normal recurring adjustments, but are not necessarily indicative of full-year results - The financial statements are unaudited and prepared in accordance with Form 10-Q and GAAP, including normal recurring adjustments[16] - All significant intercompany accounts and transactions have been eliminated in consolidation[16] - The interim results are not necessarily indicative of results to be expected for the full year[17] 4. Use of Estimates The preparation of financial statements requires management to make significant estimates and assumptions, such as for stock-based compensation, deferred tax assets, lease rates, asset useful lives, inventory reserves, and credit losses, which could differ from actual results - Management makes estimates and assumptions affecting reported asset/liability amounts and revenue/expenses[18] - Significant estimates include stock-based compensation expense, valuation for deferred tax assets, incremental borrowing rate on leases, useful life of long-lived assets, inventory reserves, and allowance for credit losses[18] - Actual results could differ materially from these estimates[18] 5. Recent Accounting Guidance The company is evaluating several new Accounting Standards Updates (ASUs) related to segment reporting, income tax disclosures, expense disaggregation, and credit loss measurement, anticipating additional disclosures but no material impact on financial position or results of operations - ASU 2023-07 (Segment Reporting) requires expanded annual and interim disclosures for significant segment expenses, effective for fiscal years beginning after December 15, 2023, with no material impact expected other than expanded disclosures[20] - ASU 2023-09 (Income Taxes) standardizes effective tax rate reconciliation categories and requires disaggregation of income taxes, effective for fiscal years beginning after December 15, 2024 (year ended November 30, 2026 for the Company)[21] - ASU 2024-03 (Expense Disaggregation) requires more detailed disclosures about significant expense categories, effective for annual periods beginning after December 15, 2026, with no material impact on financial position or results of operations expected[22] - ASU 2025-05 (Credit Losses) introduces a practical expedient for measuring credit losses on accounts receivable, effective for annual periods beginning after December 15, 2025, with no material impact on financial position or results of operations expected[23] 6. Goodwill Goodwill is not amortized but is reviewed for impairment annually or more frequently if circumstances change, with the assessment performed at the company level as a single reporting unit - Goodwill is not amortized but is reviewed for impairment annually or more frequently if circumstances suggest a reduction in fair value[24] - The company has the option to perform a qualitative or quantitative assessment for goodwill impairment[24] - The company's operations constitute a single reporting unit, and goodwill is assessed for impairment at the company level[25] 7. Marketable Debt Securities Marketable debt securities, consisting of U.S. Treasury Securities and Corporate Bonds, are classified as available-for-sale and recorded at fair value, with unrealized gains and losses in other comprehensive income. As of August 31, 2025, total marketable securities were $2,501 thousand - Marketable debt securities are classified as available-for-sale and recorded at fair value, with unrealized gains and losses included in accumulated other comprehensive income[26] | Security Type | August 31, 2025 (thousands) | November 30, 2024 (thousands) | | :-------------------- | :---------------------------- | :---------------------------- | | Corporate bonds | $1,495 | $2,968 | | U.S. Treasury securities | $1,006 | $5,936 | | Total Fair Value | $2,501 | $8,904 | - Fair value measurements are based on a three-tier hierarchy, with all marketable debt securities classified as Level 2 (observable inputs other than quoted prices) as of August 31, 2025[28][29][30] 8. Investment in Joint Venture The company sold its 51% ownership in Byrna LATAM S.A. for $1 on August 19, 2024, and entered into an exclusive distribution, manufacturing, and licensing agreement, generating $1.1 million in royalty revenue for the nine months ended August 31, 2025 - In January 2023, the Company acquired a 51% ownership interest in Byrna LATAM S.A. for $0.5 million, accounted for using the equity method[31] - On August 19, 2024, the Company sold its 51% ownership interest to Fusady S.A. for $1 and entered into an exclusive distribution, manufacturing, and licensing agreement with Byrna LATAM[32] - Royalty revenue earned from the LATAM Licensing Agreement was $0.3 million for the three months and $1.1 million for the nine months ended August 31, 2025[32] 9. Advertising Costs Advertising costs, expensed as incurred, increased to $4,000 thousand for the three months and $11,900 thousand for the nine months ended August 31, 2025, reflecting increased marketing efforts | Period | Advertising Costs (thousands) | | :-------------------------------- | :---------------------------- | | Three Months Ended August 31, 2025 | $4,000 | | Three Months Ended August 31, 2024 | $3,200 | | Nine Months Ended August 31, 2025 | $11,900 | | Nine Months Ended August 31, 2024 | $8,600 | 10. Revenue, Deferred Revenue and Accounts Receivable Revenue is recognized upon transfer of control, net of returns and discounts. The company offers standard and extended warranties, with extended warranties recognized as deferred revenue. Accounts receivable increased significantly, while the allowance for credit losses decreased. Royalty revenue from the LATAM agreement also contributed to total revenue - Revenue is recognized when control of goods transfers to the customer, typically when goods are loaded into the carrier's trailer (EXW terms)[35] - Extended warranties (3-year and 5-year) are classified as service obligations, with revenue recognized on a straight-line basis over the warranty period and recorded as deferred revenue[36][37] | Metric | August 31, 2025 (thousands) | November 30, 2024 (thousands) | | :-------------------------------- | :---------------------------- | :---------------------------- | | Accounts receivable, net | $8,900 | $2,600 | | Allowance for credit losses | < $100 | $300 | | Deferred revenue balance, end of period | $289 | $1,808 | Revenue Disaggregation by Distribution Channel (thousands) | Distribution Channel | Three Months Ended Aug 31, 2025 | Three Months Ended Aug 31, 2024 | Nine Months Ended Aug 31, 2025 | Nine Months Ended Aug 31, 2024 | | :-------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Wholesale (dealer/distributors) | $11,530 | $4,781 | $29,653 | $13,512 | | E-commerce (direct to consumers) | $16,335 | $16,073 | $52,096 | $44,265 | | Royalties | $314 | — | $1,125 | — | | Total | $28,179 | $20,854 | $82,874 | $57,777 | 11. Inventory Total inventory increased significantly to $34,106 thousand as of August 31, 2025, from $19,972 thousand at November 30, 2024, with increases across raw materials, work in process, and finished goods | Inventory Component | August 31, 2025 (thousands) | November 30, 2024 (thousands) | | :------------------ | :---------------------------- | :---------------------------- | | Raw materials | $17,970 | $10,307 | | Work in process | $5,186 | $3,433 | | Finished goods | $10,950 | $6,232 | | Total | $34,106 | $19,972 | 12. Property and Equipment Net property and equipment increased to $6,780 thousand as of August 31, 2025, from $3,408 thousand at November 30, 2024, reflecting significant investments in machinery and equipment, and leasehold improvements. Depreciation expense also increased | Category | August 31, 2025 (thousands) | November 30, 2024 (thousands) | | :-------------------------- | :---------------------------- | :---------------------------- | | Computer equipment and software | $787 | $791 | | Furniture and fixtures | $628 | $276 | | Leasehold improvements | $1,907 | $1,048 | | Machinery and equipment | $7,503 | $4,095 | | Less: accumulated depreciation | $(4,045) | $(2,802) | | Total | $6,780 | $3,408 | | Period | Depreciation Expense (thousands) | | :-------------------------------- | :------------------------------- | | Nine Months Ended August 31, 2025 | $1,400 | | Nine Months Ended August 31, 2024 | $900 | | Three Months Ended August 31, 2025 | $600 | | Three Months Ended August 31, 2024 | $400 | - Deposits for equipment, primarily for machinery (molds), were $2,600 thousand as of August 31, 2025[51] 13. Intangible Assets Net intangible assets decreased slightly to $3,151 thousand as of August 31, 2025, from $3,337 thousand at November 30, 2024, primarily due to amortization of patents, partially offset by the acquisition of a Federal Firearms License | Intangible Asset | August 31, 2025 (thousands) | November 30, 2024 (thousands) | | :----------------- | :---------------------------- | :---------------------------- | | Patents | $2,785 | $2,977 | | Trademarks | $360 | $360 | | Customer List | — | — | | Federal Firearms License | $6 | — | | Total Net Carrying Amount | $3,151 | $3,337 | | Period | Amortization Expense (thousands) | | :-------------------------------- | :------------------------------- | | Nine Months Ended August 31, 2025 | $200 | | Nine Months Ended August 31, 2024 | $100 | | Three Months Ended August 31, 2025 | < $100 | | Three Months Ended August 31, 2024 | < $100 | | Fiscal Year Ending November 30, | Estimated Future Amortization Expense (thousands) | | :-------------------------------- | :------------------------------------------------ | | 2025 (remaining three months) | $65 | | 2026 | $259 | | 2027 | $259 | | 2028 | $259 | | 2029 | $259 | | Thereafter | $1,690 | | Total | $2,791 | 14. Accounts Payable and Accrued Liabilities Total accounts payable and accrued liabilities decreased to $12,698 thousand as of August 31, 2025, from $13,108 thousand at November 30, 2024, primarily due to a decrease in accrued personnel costs | Category | August 31, 2025 (thousands) | November 30, 2024 (thousands) | | :-------------------------- | :---------------------------- | :---------------------------- | | Trade payables | $8,540 | $7,715 | | Accrued sales, use and income tax | $556 | $570 | | Accrued personnel costs | $3,216 | $4,193 | | Accrued professional fees | $135 | $124 | | Other accrued liabilities | $251 | $506 | | Total | $12,698 | $13,108 | 15. Stockholders' Equity The company's Board of Directors approved a $10 million stock buyback program on July 31, 2024, to return capital and minimize dilution. As of August 31, 2025, $3.8 million has been used to repurchase 353,157 shares - On July 31, 2024, the Board approved a Stock Buyback Program of up to $10 million worth of common stock[60] - The program aims to return capital to shareholders and minimize the dilutive impact of stock options and share-based awards, expiring on the sooner of two years or reaching the $10 million limit[60] | Metric | As of August 31, 2025 | | :-------------------------------- | :-------------------- | | Total shares repurchased | 353,157 | | Total cost of repurchased shares | $3,807,931 | | Average cost per share | $10.8 | | Repurchases during nine months ended Aug 31, 2025 | 3,927 shares for $50 thousand | 16. Stock-Based Compensation The 2020 Equity Incentive Plan governs stock-based awards, with total compensation expense decreasing slightly for the nine months ended August 31, 2025. The company granted performance-based and time-based RSUs and recognized related compensation expense, with $3,900 thousand of unrecognized cost remaining for RSUs and $400 thousand for stock options - The 2020 Equity Incentive Plan authorizes 3,800,000 shares for options, SARs, RSUs, and restricted/unrestricted common stock awards to employees, officers, directors, consultants, and advisors[62] | Period | Total Stock-Based Compensation Expense (thousands) | | :-------------------------------- | :----------------------------------------------- | | Nine Months Ended August 31, 2025 | $2,300 | | Nine Months Ended August 31, 2024 | $2,600 | | Three Months Ended August 31, 2025 | $700 | | Three Months Ended August 31, 2024 | $800 | - During the nine months ended August 31, 2025, the Company granted 120,830 RSUs (88,344 time-based and 32,486 performance-based PSUs)[66] - As of August 31, 2025, there was $3,900 thousand of unrecognized stock-based compensation cost related to unvested RSUs (expected to be recognized over 1.1 years) and $400 thousand for unvested stock options (expected over 1.2 years)[67][69] 17. Earnings Per Share Basic and diluted net income per share increased for both the three and nine months ended August 31, 2025, reflecting higher net income. The calculation includes dilutive stock options and RSUs, while anti-dilutive shares are excluded | Metric | Three Months Ended Aug 31, 2025 | Three Months Ended Aug 31, 2024 | Nine Months Ended Aug 31, 2025 | Nine Months Ended Aug 31, 2024 | | :----------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net income per share - basic | $0.10 | $0.05 | $0.28 | $0.14 | | Net income per share - diluted | $0.09 | $0.04 | $0.26 | $0.14 | | Weighted-average common shares outstanding - diluted | 24,103,760 | 23,410,159 | 24,147,430 | 23,072,498 | | Potential Common Shares Excluded (Anti-Dilutive) | Three Months Ended Aug 31, 2025 | Three Months Ended Aug 31, 2024 | Nine Months Ended Aug 31, 2025 | Nine Months Ended Aug 31, 2024 | | :----------------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Options | — | 437,666 | — | 437,666 | | RSUs | 20,919 | 16,513 | 41,944 | 41,513 | | Total | 20,919 | 454,179 | 41,944 | 479,179 | 18. Related Party Transactions Related party transactions include a nominal sublease payment from a CEO-owned corporation. Fusady S.A. is no longer considered a related party following the divestiture of the Byrna LATAM joint venture in August 2024 - The Company subleases office premises to a corporation owned and controlled by the CEO, with nominal payments received[74] - Fusady S.A. is no longer considered a related party after the divestiture of the Byrna LATAM joint venture in August 2024[75] 19. Leases The company holds various operating leases for real estate in the U.S. and South Africa, with several new leases commenced in 2024 and 2025 for retail and office spaces. Total lease cost increased for the nine months ended August 31, 2025, and future lease payments extend through 2029 and thereafter - The Company has operating leases for real estate in the United States (Andover, Fort Wayne, Las Vegas, Salem, Scottsdale, Franklin) and South Africa[76][77][79][80][81][82][83][84] | Lease Metric | Nine Months Ended Aug 31, 2025 (thousands) | Nine Months Ended Aug 31, 2024 (thousands) | | :------------------------------------------ | :--------------------------------------- | :--------------------------------------- | | Operating lease cost | $565 | $459 | | Short-term lease cost | $60 | — | | Total lease cost | $625 | $459 | | Cash paid for operating lease liabilities | $395 | $504 | | Weighted-average remaining lease term | 4.1 years | 4.6 years | | Weighted-average discount rate | 7.9% | 8.3% | | Fiscal Year Ending November 30, | Future Lease Payments (thousands) | | :-------------------------------- | :-------------------------------- | | 2025 (remaining three months) | $206 | | 2026 | $840 | | 2027 | $738 | | 2028 | $386 | | 2029 | $266 | | Thereafter | $387 | | Total lease payments | $2,823 | | Present value of operating lease liabilities | $2,432 | 20. Income Taxes The company recorded income tax expenses of $600 thousand for the three months and $1,700 thousand for the nine months ended August 31, 2025, with effective tax rates of 20.6% and 18.3%, respectively. The recently enacted One Big Beautiful Bill Act (OBBBA) is being evaluated for its impact | Period | Income Tax Expense (thousands) | Effective Tax Rate | | :-------------------------------- | :----------------------------- | :----------------- | | Three Months Ended August 31, 2025 | $600 | 20.6% | | Three Months Ended August 31, 2024 | Nominal | 0.1% | | Nine Months Ended August 31, 2025 | $1,700 | 18.3% | | Nine Months Ended August 31, 2024 | $100 (benefit) | 0.2% | - The effective tax rate differs from the statutory rate of 21.0% due to state taxes, foreign tax rate differential (Byrna South Africa), and permanent non-deductible expenses[88] - The company is evaluating the impact of the recently enacted One Big Beautiful Bill Act (OBBBA) on its financial statements and has included estimated impacts for the current tax period[89] 21. Commitments and Contingencies The company is involved in various legal actions and claims in the ordinary course of business, but management does not anticipate a material loss from these contingencies - The Company may be involved in various legal actions and claims, including product liability, consumer, commercial, tax, and governmental matters[90] - Management's opinion is that there is not a reasonable possibility of incurring a material loss from current loss contingencies for asserted legal and other claims[90] - Legal actions inherently carry uncertainties, and an unfavorable ruling could potentially impact the company's business, financial position, results of operations, or cash flows[90] 22. Segment and Geographical Disclosures The company operates as a single reportable segment, with revenue disaggregated by geographic region, showing significant growth across all regions for the nine months ended August 31, 2025 - The CEO, as Chief Operating Decision Maker, evaluates the entire business as a single entity, resulting in a single operating and reportable segment[91] Revenue by Geographic Region (thousands) | Geographic Region | Three Months Ended Aug 31, 2025 | Three Months Ended Aug 31, 2024 | Nine Months Ended Aug 31, 2025 | Nine Months Ended Aug 31, 2024 | | :------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | U.S./Mexico | $25,240 | $19,264 | $74,395 | $53,462 | | South Africa | $998 | $53 | $1,379 | $157 | | Europe/South America/Asia | $1,475 | $812 | $5,730 | $2,344 | | Canada | $466 | $725 | $1,370 | $1,814 | | Total | $28,179 | $20,854 | $82,874 | $57,777 | 23. Financial Instruments The company is exposed to currency risk, primarily from fluctuations in the South African rand, and credit risk related to cash, marketable securities, accounts receivable, and a loan to Byrna LATAM, with customer concentration noted in accounts receivable - The company is exposed to currency risk due to operations in South Africa, where revenues, costs, and assets are denominated in South African rand, leading to volatility in U.S. dollar translated earnings[93][95] - Credit risk arises from cash and cash equivalents, marketable securities, accounts receivable, and a $1,600 thousand loan receivable from Byrna LATAM[95][97] - As of August 31, 2025, two customers accounted for approximately 32% of total accounts receivable, indicating customer concentration risk[96] - The company's investment policy limits credit risk exposure by requiring marketable debt securities to be at least AA-/Aa3 rated[98] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial performance, liquidity, and capital resources for the three and nine months ended August 31, 2025, highlighting revenue growth, changes in profitability, and cash flow dynamics, along with an overview of business strategy and non-GAAP financial measures Overview Byrna Technologies designs and distributes non-lethal security solutions, aiming to be a consumer lifestyle brand. Its strategy focuses on meeting demand in law enforcement, security, and civilian markets for less-lethal products, and expanding its product line. The company also detailed the divestiture of its Byrna LATAM joint venture and the initiation of a stock buyback program - Byrna Technologies is a designer, manufacturer, retailer, and distributor of innovative technological solutions for non-lethal security situations, with a core mission to empower individuals for self-defense[102] - The business strategy is twofold: (1) fulfill growing demand for less-lethal products in law enforcement, correctional services, and private security markets, and (2) provide civilians with effective, non-lethal self-protection[103] - On August 19, 2024, the company sold its 51% ownership in Byrna LATAM for $1 and entered into an exclusive distribution, manufacturing, and licensing agreement[105] - On July 31, 2024, the Board of Directors approved a Stock Buyback Program of up to $10 million to return capital to shareholders and minimize dilution[106] Results of Operations The company achieved substantial revenue growth for both the three and nine months ended August 31, 2025, driven by a new marketing strategy and increased sales across wholesale, e-commerce, and international channels. Gross profit increased, but gross margin slightly decreased due to a shift towards lower-margin wholesale sales. Operating expenses rose due to increased marketing, variable expenses, and employee compensation, yet net income significantly improved Key Financial Highlights (Three Months Ended August 31) | Metric | 2025 (thousands) | 2024 (thousands) | Change ($) | Change (%) | | :-------------------- | :--------------- | :--------------- | :--------- | :--------- | | Net Revenue | $28,179 | $20,854 | $7,325 | 35.1% | | Cost of Goods Sold | $11,257 | $7,842 | $3,415 | 43.5% | | Gross Profit | $16,922 | $13,012 | $3,910 | 30.0% | | Gross Margin | 60.1% | 62.4% | -2.3% | | | Operating Expenses | $14,059 | $12,184 | $1,875 | 15.4% | | Net Income | $2,235 | $1,025 | $1,210 | 118.0% | Key Financial Highlights (Nine Months Ended August 31) | Metric | 2025 (thousands) | 2024 (thousands) | Change ($) | Change (%) | | :-------------------- | :--------------- | :--------------- | :--------- | :--------- | | Net Revenue | $82,874 | $57,777 | $25,097 | 43.4% | | Cost of Goods Sold | $32,464 | $22,566 | $9,898 | 43.9% | | Gross Profit | $50,410 | $35,211 | $15,199 | 43.2% | | Gross Margin | 60.8% | 60.9% | -0.1% | | | Operating Expenses | $42,525 | $32,633 | $9,892 | 30.3% | | Net Income | $6,324 | $3,120 | $3,204 | 102.7% | - Revenue increase attributed to a new marketing strategy implemented in September 2023, shifting advertising efforts towards celebrity endorsers[107][119] Adjusted EBITDA Reconciliation (thousands) | Metric | Three Months Ended Aug 31, 2025 | Three Months Ended Aug 31, 2024 | Nine Months Ended Aug 31, 2025 | Nine Months Ended Aug 31, 2024 | | :-------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net income (loss) | $2,235 | $1,025 | $6,324 | $3,120 | | Interest income | $(97) | $(281) | $(400) | $(883) | | Income tax expense (benefit) | $628 | $(78) | $1,666 | $(75) | | Depreciation and amortization | $259 | $263 | $696 | $1,113 | | Stock-based compensation expense | $734 | $819 | $2,297 | $2,615 | | Severance/Officer recruiting/Separation | $(36) | $196 | $210 | $431 | | Non-GAAP adjusted EBITDA | $3,723 | $1,944 | $10,793 | $6,321 | Liquidity and Capital Resources Cash and cash equivalents decreased by $10,300 thousand to $6,500 thousand as of August 31, 2025, primarily due to cash used in operating activities, driven by increases in inventory and accounts receivable. Investing activities provided cash, while financing activities provided a small amount of cash, a significant change from the prior year's cash usage - Cash and cash equivalents totaled $6,500 thousand as of August 31, 2025, a decrease of $10,300 thousand from $16,800 thousand as of November 30, 2024[130] Cash Flow Summary (Nine Months Ended August 31) | Cash Flow Activity | 2025 (thousands) | 2024 (thousands) | | :------------------------------------------ | :--------------- | :--------------- | | Net cash (used in) provided by operating activities | $(11,503) | $4,479 | | Net cash provided by (used in) investing activities | $583 | $(1,382) | | Net cash provided by (used in) financing activities | $99 | $(3,924) | - Operating cash outflow was primarily driven by increases in inventory ($14,100 thousand) and accounts receivable ($6,200 thousand)[132] - Investing activities provided cash mainly from proceeds from the sale of marketable debt securities ($6,352 thousand), partially offset by purchases of property and equipment ($5,830 thousand)[133] - The company intends to fund operations primarily from operating funds but may pursue secondary equity offerings or debt financings, with no assurance of availability or terms[135] Off-Balance Sheet Arrangements The company has no off-balance sheet arrangements that are material or reasonably likely to have a material effect on its financial condition or results of operations - The Company does not have any off-balance sheet arrangements that are material or reasonably likely to have a material effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources[136] Recent Accounting Pronouncements Refer to Note 5 in the condensed consolidated financial statements for a discussion of recently issued and adopted accounting standards - Refer to Note 5, 'Recent Accounting Guidance,' in the Notes to unaudited condensed consolidated financial statements for a discussion of recently issued and adopted accounting standards[137] Critical Accounting Policies and Estimates There were no significant changes to the company's critical accounting policies and estimates during the three and nine months ended August 31, 2025, from those described in its 2024 Form 10-K - There were no significant changes to the company's critical accounting policies from those described in its 2024 Form 10-K during the three and nine months ended August 31, 2025[138] Item 3. Quantitative and Qualitative Disclosures about Market Risk This item is not applicable for the current reporting period - This item is not applicable[139] Item 4. Controls and Procedures Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of August 31, 2025, with no material changes to internal controls over financial reporting during the third quarter of 2025 - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of August 31, 2025[140] - Disclosure controls and procedures are designed to ensure material information is recorded, processed, summarized, and reported timely[140] - There were no changes during the third quarter of 2025 that materially affected or are reasonably likely to materially affect internal control over financial reporting[141] PART II – OTHER INFORMATION Item 1. Legal Proceedings The company is involved in various legal proceedings in the normal course of business, but management believes any liability from these would not have a material adverse effect on its business or financial condition - The Company occasionally becomes involved in various legal proceedings in the normal course of business[142] - Management's opinion is that any liability from such proceedings would not have a material adverse effect on the company's business or financial condition[142] Item 1A. Risk Factors This section references the risk factors from the company's 2024 Form 10-K and highlights new material changes related to tariffs, sanctions, and other trade barriers, particularly impacting international sales and supply chain costs in emerging markets - Factors that could cause actual results to differ materially are detailed in the 'Risk Factors' section of the Annual Report on Form 10-K for the fiscal year ended November 30, 2024[143] - New material changes include risks from tariffs, sanctions, restrictions on imports, or other trade barriers between the United States and various countries, which may impact revenue and results of operations[144] - The company does business in emerging market jurisdictions like South Africa and South America, where economic, political, and legal risks are heightened[144] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company's Board of Directors approved a $10 million stock buyback program on July 31, 2024, but no shares of common stock were repurchased during the three months ended August 31, 2025 - On July 31, 2024, the Board of Directors approved a program to buy back up to $10 million worth of common stock over two years[145] - The Stock Buyback Program aims to return capital to shareholders and minimize the dilutive impact of stock options and other share-based awards[145] - No shares of common stock were repurchased during the three months ended August 31, 2025[145] Item 3. Defaults Upon Senior Securities There were no defaults upon senior securities during the reporting period - There were no defaults upon senior securities[146] Item 4. Mine Safety Disclosures This item is not applicable to the company - This item is not applicable[147] Item 5. Other Information This section discloses insider trading arrangements, specifically a Rule 10b5-1 trading arrangement adopted by Luan Pham for the sale of up to 142,661 shares of common stock Insider Trading Arrangement | Name & Title | Date Adopted | Character of Trading Arrangement | Shares of Common Stock to be Purchased or Sold | Duration | | :------------- | :----------- | :------------------------------- | :------------------------------------------- | :------- | | Luan Pham | July 14, 2025 | Rule 10b5-1 Trading Arrangement | Up to 142,661 shares to be sold | January 5, 2026 through December 21, 2026 | Item 6. Exhibits This item lists all exhibits filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q, including certifications, agreements, and XBRL documents - The exhibits include certifications (e.g., 31.1, 31.2, 32.1), the Amended and Restated 2020 Equity Incentive Plan, Separation and Consulting Agreements, and various Inline XBRL documents[153] SIGNATURES The report is duly signed on behalf of Byrna Technologies Inc. by its President and Chief Executive Officer, Bryan Ganz, and its Chief Financial Officer, Laurilee Kearnes - The report is signed by Bryan Ganz, President and Chief Executive Officer, and Laurilee Kearnes, Chief Financial Officer, on October 9, 2025[155][157]