Byrna Technologies — Fiscal Third Quarter 2026 Earnings Summary

Financial Performance

• Net revenue for Q3 2026 was $15.3 million, a 46% year-over-year decrease from $28.2 million in Q3 2025, driven by declining e-commerce sales and slower dealer reorder activity following substantial restocking in fiscal Q1.
• Gross profit was $12.2 million (79% of net revenue) compared to $16.9 million (60% of net revenue) in Q3 2025; the reported margin includes a one-time $2.3 million tariff refund.
• Adjusted gross profit (non-GAAP) was $9.9 million, representing an adjusted gross margin of approximately 65%, up from 60% in Q3 2025, attributed to manufacturing efficiency gains and a shift to higher-margin products.
• Operating expenses were $15.1 million, a 7% increase from $14.1 million in Q3 2025, primarily due to new marketing investments and $1.7 million in one-time costs, partially offset by lower variable selling expenses.
• Net loss for Q3 2026 was $(2.9) million, compared to net income of $2.2 million in Q3 2025.
• Adjusted EBITDA (non-GAAP) was $(1.4) million, compared to $4.1 million in Q3 2025.
• Cash, cash equivalents, and marketable securities totaled $9.4 million as of August 31, 2026, down from $9.0 million at August 31, 2025, and $15.5 million at November 30, 2025.
• Inventory totaled $30.0 million as of August 31, 2026, down from $34.1 million at August 31, 2025.
• Accounts receivable, net, decreased to $2.5 million from $10.8 million at November 30, 2025.
• Total liabilities decreased to $9.5 million from $18.7 million at November 30, 2025.
• Stockholders' equity was $55.1 million as of August 31, 2026, down from $65.8 million at November 30, 2025.

Guidance and Future Outlook

• Management expects sequential improvement as the company approaches the end of its fiscal year, citing positive signs from new initiatives.
• The company anticipates inventory levels will continue to normalize and decrease more substantially during the upcoming holiday sales period, leading to improved working capital efficiency and cash generation.
• Management projects that refreshed marketing programs, an expanding creator network, and expanded dealer base will drive holiday sell-through and improved retail productivity.
• The company plans to extend its presence into international, professional security, and law enforcement markets over the next several years.
• Future focus pillars include expanding brand awareness and adoption, improving operational efficiency through margin expansion, and evaluating strategic opportunities to strengthen the personal safety platform.

Business Segments and Product Lines

• Completed the acquisition of HERO Defense Systems, LLC, expanding the product portfolio into additional price points and form factors.
• Successfully transitioned ammunition production to an outsourced model, improving ammunition gross margins by approximately 1,200 basis points in the quarter.
• Launched and sold through all available refurbished product inventory, creating a new revenue diversification channel.
• Onboarded more than 50 influencers with a combined following of 3.8 million people through Acceleration Partners to build a social creator ecosystem.
• Reallocated marketing investments within iHeartMedia to a partnership with The Bobby Bones Show to expand reach to mainstream consumer audiences.
• Strengthened the leadership team with the addition of Jim White (SVP of Retail & Channel Growth) and Nate Secor (SVP of Brand and Marketing).
• Appointed Rose Lopez Keravuori and Dr. Matthew McBrady to the Board of Directors to add expertise in enterprise risk management, capital markets, and corporate governance.

Market and Competitive Landscape

• Byrna positions itself as the clear market leader in the less-lethal personal defense category it pioneered.
• The company aims to reshape the personal safety landscape by providing an effective option between being defenseless and carrying a firearm.
• Management believes the company is only beginning to unlock substantial growth opportunities through increased consumer awareness, broader distribution, and continued category adoption.

Risks and Challenges

• Revenue decline was driven by slower-than-expected sell-through and a decline in e-commerce sales.
• Forward-looking statements carry risks including disappointing market responses, supply chain disruptions, inventory write-downs, and regulatory changes affecting product marketing or trade policies.
• Risks include the potential failure of strategic initiatives to generate anticipated revenue, the inability to integrate the HERO acquisition benefits, and reliance on third-party suppliers for outsourced ammunition production.
• Potential risks include product design defects, litigation, changes in consumer sentiment, and the risk that cash resources are insufficient to fund operations.

Management Commentary and Tone

• CEO Conn Davis stated the company has made significant progress in rebuilding foundations for sustainable long-term growth and is seeing positive signs of new initiatives taking hold.
• Management noted that website sessions averaged over 29,000 per day in August, the highest since March 2026, with sequential improvements in website conversion from June to August.
• Management expressed confidence that the company is moving in the right direction, though many initiatives remain in early stages.
• The tone is optimistic regarding the company's ability to execute transformation initiatives and build a larger, more profitable, and durable business over time.

Other Key Points

• The company reported a one-time $2.3 million refund of previously paid tariffs included in Q3 2026 gross profit.
• The company expects inventory levels to continue normalizing in subsequent quarters.
• A conference call was held on October 8, 2026, to discuss results and answer questions.
• The company operates as a personal defense technology company specializing in less-lethal personal security solutions, including the Byrna CL, LE, and SD devices.