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Byrna Technologies Inc. (BYRN)·Q2 2025 Earnings Summary

Executive Summary

  • Record quarter: Revenue grew 41% year-over-year to $28.5M, gross margin held at 62%, and diluted EPS reached $0.10; Adjusted EBITDA rose to $4.3M, reflecting leverage from the Compact Launcher (CL) launch and dealer channel strength .
  • Versus estimates: Revenue slightly beat consensus ($28.505M vs $28.467M*) and EPS materially beat ($0.127 primary EPS* vs $0.07*), while standardized EBITDA also beat ($3.89M* vs $3.17M*) .
  • Guidance and outlook: Management reiterated a steady-state production cadence of 15,000 units/month, expects full-year effective tax rate ~23%, and indicated 25–40% YoY growth is a reasonable near-term range; CL availability on Amazon (including Prime Day) and expansion at Sportsman’s Warehouse underpin H2 momentum .
  • Catalysts: CL ramp and broader retail footprint (Sportsman’s program scaling toward ~140 stores by year-end) and influencer-driven awareness should drive distribution gains; inventory built ahead of CL launch supports availability and near-term cash recovery as levels normalize .

Values marked with * are retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • Strong topline and profitability: Revenue hit a record $28.5M (+41% YoY), gross profit rose to $17.6M with a 62% margin, and Adjusted EBITDA increased to $4.3M; diluted EPS of $0.10 was supported by higher sales .
  • Dealer channel surge and retail expansion: Dealer sales rose 106% YoY, aided by initial stocking orders and rollout of 22 store-within-a-store locations (14 with shooting pods); company-owned stores averaged ~$69K in May sales with Scottsdale reaching Las Vegas levels .
  • Product launch success and marketing innovation: The CL (38% smaller than SD) is now on Amazon and featured in Prime Day; management is integrating AI tools to accelerate creative testing—“banana” ad creativity improved ROAS at near-zero cost .

What Went Wrong

  • Channel mix and OpEx pressure: Operating expenses rose to $14.2M (+33% YoY) on variable selling, payroll, and discretionary marketing; channel mix shift toward dealers required careful margin management despite favorable CL mix .
  • Inventory draw and working capital: Cash and marketable securities declined to $13.0M from $25.7M at FY-end due to inventory build ahead of CL; inventory increased to $32.3M, with management planning to normalize over coming quarters .
  • Consumer softness: Management flagged subdued consumer sentiment, higher abandoned cart rates, and “dog days” seasonality; near-term demand may be tempered outside promotional periods and civil unrest-related spikes .

Financial Results

MetricQ2 2024 (oldest)Q1 2025Q2 2025 (newest)
Net Revenue ($USD Millions)$20.3 $26.2 $28.5
Gross Profit ($USD Millions)$12.6 $15.9 $17.6
Gross Margin %62% 61% 62%
Operating Expenses ($USD Millions)$10.6 $14.2 $14.2
Income from Operations ($USD Millions)$1.9 $1.7 $3.3
Net Income ($USD Millions)$2.1 $1.7 $2.4
Diluted EPS ($)$0.09 $0.07 $0.10
Adjusted EBITDA ($USD Millions)$2.8 $2.77 $4.3

Versus consensus (Q2 2025):

MetricConsensusActual
Revenue ($USD Millions)$28.47*$28.51
Primary EPS ($)$0.07*$0.127*
EBITDA ($USD Millions)$3.17*$3.89*

Values marked with * are retrieved from S&P Global.

Sales channel mix (Q2 2025 vs Q2 2024):

Channel ($USD Millions)Q2 2024Q2 2025
Web$14.4 $16.6
Byrna Dedicated Dealers$3.6 $7.5
Law Enforcement / Schools / Private Security$0.0 $0.1
Retail Stores$0.2 $0.8
International$1.9 $3.6
Total$20.3 $28.5

KPIs

KPIQ2 2025Reference
CL production in quarter (units)38,237
Total launcher production in quarter (units)63,835
Steady-state production cadence (units/month)15,000
Inventory ($USD Millions)$32.3
Cash + Marketable Securities ($USD Millions)$13.0
Dealer sales YoY+106%
E-commerce sales YoY+15%
International sales YoY+86% (incl. ~$0.8M royalty)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Effective Tax RateFY 2025N/A~23%New
Production CadenceH2 2025~24k/month pre-CL build 15k/month steady-stateLowered to align with demand
Growth OutlookNear termN/A25–40% YoY commentary rangeNew qualitative outlook
Sportsman’s Warehouse rollout2025Pilot early-year ~140 locations targeted by year-end (mix of pods, store-within-store, POS)Raised footprint ambition
Cash trajectoryH2 2025N/AExpect cash to increase as inventory normalizesNew qualitative outlook

Earnings Call Themes & Trends

TopicQ4 2024 (Q-2)Q1 2025 (Q-1)Q2 2025 (Current)Trend
AI/technology in marketingStrong ROAS; expanding channels Scaling production; ammo facility ramp AI-generated creative (“banana” ad), faster content cycles, improving ROAS Improving
Supply chain & tariffsRe-shoring initiative, exit China by mid-year; tariff insulation goal 92% U.S. components for SD; ammo facility started CEO media appearances on tariffs; continued reshoring and assembly pod system Improving risk posture
Product performance (CL)Anticipated new Compact Launcher Inventory build ahead of CL; 24k/month capacity Launch successful; Amazon listing; cannibalization of LE but better margins on CL Positive mix shift
Retail footprintLOI for 11 Sportsman’s stores 13-store pilot; company-owned stores opened 22 store-within-store; 59 Sportsman’s locations carrying Byrna; path to ~140 by year-end Expanding
InternationalCordoba ammo order; strong adoption N/AInternational sales +86%; ~$0.8M royalty from LATAM Improving
Regulatory/legalGeneral risk factors cited General risk factors cited General risk factors cited; no new legal issues highlighted Stable
R&D/recurring revenueN/AAmmo production ramp; DFM cost reduction Byrna Care subscription planned; future CL chipset for connected features Building

Management Commentary

  • “The launch of the Byrna CL in May helped us deliver a record $28.5 million in revenue for the second quarter… we expect that the CL will be a larger part of our sales mix, especially now that it is available to customers on Amazon.”
  • “Our dealer channel is also becoming a larger percentage of total sales, increasing 106% in the second quarter, supported by our partnership with Sportsman’s Warehouse.”
  • “We are now producing at a steady state pace of 15,000 units per month… with a smaller, more agile workforce.”
  • “We did see strength during the week where the riots were occurring in Los Angeles… sales were probably up by 40% versus the prior week… you can use 25% to 40%… as a very good range for the year.”
  • “Adjusted EBITDA… totaled $4.3 million… compared to $2.8 million in Q2 2024.”

Q&A Highlights

  • Demand trends and consumer softness: Management observed transient spikes during civil unrest and broader softness reflected in higher abandoned cart rates; nonetheless, they view 25–40% YoY growth as a reasonable range near term .
  • Sportsman’s rollout clarity: Clarified distinction between shooting pods and store-within-store; planned installation of nine additional pods and staffing with “Byrna geniuses,” aiming for ~140 Sportsman’s stores by year-end .
  • Channel mix outlook: Expect brick-and-mortar to grow faster than online; within online, Amazon to outpace Byrna.com; large untapped audience via Sportsman’s e-commerce .
  • Recurring revenue strategy: Introducing Byrna Care (subscription-like protection plan) and planning a CL chipset next year to enable connected features (e.g., geolocation alerts), creating SaaS-like revenue streams .
  • OpEx/inventory trajectory: One-off CL launch expenses in Q2; expect elevated marketing in Q3; production reduced and inventory levels expected to normalize to bolster cash .

Estimates Context

  • Q2 2025 beats: Revenue slightly beat consensus ($28.505M actual vs $28.467M*), primary EPS beat materially ($0.127* vs $0.07*), and standardized EBITDA exceeded consensus ($3.89M* vs $3.17M*) .
  • Forward quarters setup: Consensus implies sequential growth in Q4 2025 revenue ($34.799M*) and EBITDA ($6.14M*) with EPS estimates rising; CL Amazon availability, Sportsman’s expansion, and international momentum could support upward revisions if execution sustains. Values retrieved from S&P Global.

Key Takeaways for Investors

  • CL launch and Amazon listing are driving mix and margin benefits, with LE cannibalization acceptable given CL’s 7–8 percentage point margin advantage and stronger consumer value proposition .
  • Dealer channel is accelerating—initial Sportsman’s stocking orders and store-within-store model are scaling; staffing and incentives (spiffs) aim to improve in-store conversion and throughput .
  • Working capital normalization is a near-term cash lever as production resets to 15k/month and inventory converts to sales through H2 .
  • Marketing innovation (AI-enabled creative) and a broadened influencer roster continue to deliver high-ROAS campaigns, reducing CAC and supporting DTC growth .
  • International royalty and distributor momentum add diversification; optionality to re-acquire LATAM upon sustained profitability creates a call-option on regional scale .
  • Near-term trading: The EPS and EBITDA beats vs consensus and Amazon Prime Day placement are positive; watch weekly sell-through at Sportsman’s and inventory draw rates for confirmation of H2 trajectory .
  • Medium-term thesis: Category normalization, retail footprint expansion, domestic manufacturing/resilience against tariffs, and nascent recurring revenue streams (Byrna Care, chipset) broaden the profit pool and de-risk execution .

Values marked with * are retrieved from S&P Global.