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Byrna Technologies Inc. (BYRN)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered 35% year-over-year revenue growth to $28.2M, driven by strong dealer/chain-store sales and an AI-enabled advertising surge; diluted EPS of $0.09 and adjusted EBITDA of $3.7M showed operating leverage despite a lower gross margin mix .
  • EPS materially beat Wall Street consensus; revenue was essentially in-line. Management initiated formal FY2025 revenue growth guidance of 35–40% and targeted FY2026 gross margins of 63–65% as production efficiencies ramp .
  • Web sessions and brand reach inflected: Byrna.com averaged ~52k/day in August and ~58k/day in September; Amazon sessions rose sharply, supporting momentum into holiday promos and higher expected DTC mix in Q4 .
  • Inventory and receivables rose with channel expansion and seasonal builds (inventory peaked end-July then declined >$3.5M into quarter-end), with cash expected to increase as working capital normalizes in Q4; no debt outstanding .
  • Catalysts: new FY guidance, mainstream ad placements (MLB streaming, NFL airports), >1,000 retail locations, and a connected safety platform roadmap (SOS-enabled devices) for 2026+ .

What Went Well and What Went Wrong

What Went Well

  • 35% YoY net revenue growth to $28.2M, led by dealer and chain-store strength; adjusted EBITDA rose to $3.7M, up from $1.9M YoY .
  • AI-driven advertising materially expanded reach and lowered customer acquisition cost; Byrna.com sessions jumped to ~52k/day in August and ~58k/day in September. “We Don't Sell Bananas” became the flagship ad, securing MLB streaming and NFL airport placements .
  • Retail footprint now exceeds 1,000 locations; experiential “shooting pods” at Sportsman’s Warehouse lifted in-store demos and conversion, validating brick-and-mortar strategy .

What Went Wrong

  • Gross margin compressed to 60% (from 62% YoY) on mix shift (dealer/international) and CL/ammo startup/ramp costs; management expects margin improvement as volumes and factory efficiencies normalize .
  • Cash and marketable securities declined to $9.0M from $25.7M (FY-end) as inventory and AR rose; AR reached $8.9M with dealer expansion; inventory climbed to $34.1M for holiday/CL rollout .
  • Conversion rates initially dampened due to rapid traffic influx; management flagged fulfillment capacity risk around the six-day Black Friday/Cyber Monday window (6–7k daily packages) potentially pushing some orders into Q1 2026 .

Financial Results

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Revenue ($USD Millions)20.854 26.190 28.505 28.179
Gross Profit ($USD Millions)13.012 15.924 17.564 16.922
Gross Margin (%)62% 61% 62% 60%
Operating Expenses ($USD Millions)12.184 14.228 14.238 14.059
Operating Income ($USD Millions)0.828 1.696 3.326 2.863
Net Income ($USD Millions)1.025 1.662 2.427 2.235
Diluted EPS ($USD)0.04 0.07 0.10 0.09
MetricQ3 2024Q1 2025Q2 2025Q3 2025
Adjusted EBITDA ($USD Millions)1.944 2.771 4.300 3.723
MetricQ1 2025Q2 2025Q3 2025
Cash, Cash Equivalents & Marketable Securities ($USD Millions)19.3 13.0 9.0
Accounts Receivable ($USD Millions)2.900 6.536 8.872
Inventory ($USD Millions)23.182 32.286 34.106

Segment/channel mix (preliminary):

Sales Channel ($USD Millions)Q3 2024Q3 2025YoY %
Web15.1 16.3 8%
Chain Stores & Dealers3.2 7.9 147%
Law Enforcement / Schools / Private Security— 0.1 N/A
Byrna Retail Stores0.2 0.7 250%
International2.4 3.2 33%
Total Sales20.9 28.2 35%

Digital engagement KPIs:

KPIJul 2025Aug 2025Sep 2025
Byrna.com Daily Web Sessions (avg)~36,000 ~52,000 ~58,000
Amazon Daily Web Sessions (avg)~15,000 ~23,000 —
Online Conversion Rate (end-Aug, last 10 days)0.9% ——

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue GrowthFY 2025Not previously quantified35%–40% YoY growth Initiated
Gross Margin TargetFY 2026Not previously quantified63%–65% target Introduced
Effective Tax RateFY 2025~23% (Q1 commentary) ~23% reiterated Maintained
Channel MixQ4 2025Not specifiedDTC % of sales expected higher vs Q3 Updated
Marketing SpendQ4 2025Not specifiedAdditional Q4 marketing vs Q3 Increased

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q3 2025)Trend
AI/AdvertisingEarly AI content integration; influencer roster expanding; encouraging traffic trends (Q2) AI-created “We Don’t Sell Bananas” scaled reach; MLB/NFL placements; email list 1.9M; lower CAC; conversions improving with 45-day purchase cycle Accelerating reach; improving conversion
Retail FootprintSportsman’s store-within-a-store pilots; 12+ sites; additional 10 planned; 41 POS displays; company-owned stores ramp (Q1/Q2) >1,000 retail locations; strong store demos; exclusive shooting pods at Sportsman’s; company stores annualized ~$725k avg run-rate Expanding footprint and productivity
Product Performance (CL)CL launch in May; favorable mix; 15k/month steady-state output (Q2) CL ~30% of sales in stores; faster yield gains; margins expected to grow; SD ~50% of sales; SD strong on Amazon CL adoption strong; margin ramp
Supply Chain/ManufacturingFort Wayne ammo facility ramp; design-for-manufacturability lowered costs (Q1/Q2) Proprietary shop-floor system eliminated labor/overhead variances in Sept; margin trajectory targeted 63%–65% FY26 Efficiency improving; margins set to rise
Working CapitalInventory build ahead of CL/holidays; cash expected to rise as inventory normalizes (Q1/Q2) AR up with dealer sales; inventory peaked end-July; expected drawdown and cash increase in Q4 Normalizing through Q4
Connected Safety PlatformNot detailed in Q1/Q2SOS alert connectivity, devices for Picatinny rail/sprays; phased releases in 2026, some as early as 2026; broaden TAM New tech roadmap; recurring revenue potential
Macro/PromotionsConsumer sentiment subdued; focus on holiday promos (Q2) Black & Orange in Oct; Black Friday/Cyber Monday timing may push some orders to Q1; capacity watch Seasonal boost; ops focus

Management Commentary

  • “In Q3 2025, we delivered 35% year-over-year revenue growth… In August, our new advertising initiatives… lifted average daily web sessions… to more than 50,000… That momentum has carried into early fiscal Q4 2025, with September web sessions averaging 58,000 sessions per day.” — Bryan Ganz, CEO .
  • “Our brick-and-mortar presence continues to expand, with Byrna products now in over 1,000 retail locations nationwide.” — Bryan Ganz, CEO .
  • “We expect full-year fiscal 2025 revenue growth to come in between 35% and 40%.” — Bryan Ganz, CEO .
  • “We anticipate that the Byrna Compact Launcher and ammo margins will continue to grow as production volumes increase and manufacturing processes become more efficient.” — Laurilee Kearnes, CFO .
  • “We expect to… drive gross margin percentages towards our target of 63% to 65% next year.” — Bryan Ganz, CEO .

Q&A Highlights

  • Influencer strategy diversification: Nike veteran Adam Roth joined the Board to help pursue broader brand ambassadors beyond conservative radio hosts; no new names disclosed yet .
  • Conversion dynamics: Traffic up ~70–75%; conversion rate climbing but below historical ~1% mean; purchase cycle ~45 days; holidays historically lift conversion to ~1.5% (not needed this year given traffic) .
  • Channel mix: Expect DTC to be a higher percentage of sales in Q4 vs Q3, while dealer/chain stores remain strong .
  • Expense leverage: Q3 saw strong OpEx leverage; Q4 marketing to ramp; leverage to continue into FY2026 with some incremental hiring .
  • Operations/logistics: Black Friday/Cyber Monday six-day window represents ~40% of November sales; shipping 6–7k packages/day is an execution focus; some orders may land in Q1 2026 .
  • Retail execution: Sportsman’s Warehouse exclusive shooting pods drive demos/conversion; national footprint at Bass Pro/Cabela’s; plan to expand SKUs/colors to boost sales per store .

Estimates Context

Results vs Wall Street consensus (S&P Global):

MetricQ1 2025 Estimate*Q1 2025 ActualQ2 2025 Estimate*Q2 2025 ActualQ3 2025 Estimate*Q3 2025 Actual
Primary EPS (USD)0.070*0.1061*0.070*0.1269*0.064*0.1153*
Revenue ($USD)26,150,000*26,190,000*28,466,670*28,505,000*28,199,800*28,179,000*
EBITDA ($USD)1,970,330*2,136,000*3,174,330*3,885,000*3,239,500*3,481,000*
  • EPS beat in all three quarters; Q3 2025 EPS of $0.1153 vs $0.064 consensus (significant beat). Revenue was effectively in-line across quarters; Q3 2025 actual of $28.179M vs $28.200M consensus (immaterial variance). EBITDA modestly beat each quarter.
  • Target Price Consensus Mean: $39.7* across Q1–Q3 2025; Consensus Recommendation: not available*.
    Values retrieved from S&P Global.

Key Takeaways for Investors

  • Strong execution: Dealer/chain-store expansion and mainstream ad placements delivered robust growth; DTC expected to lift in Q4, supporting holiday momentum .
  • Margin trajectory: Near-term mix/startup effects compressed gross margin, but September factory variances were eliminated and FY2026 margin target of 63–65% is credible with volume/efficiency gains .
  • Working capital normalization: Inventory peaked in July; drawdown and AR collections should raise cash in Q4; no debt reduces risk .
  • Guidance initiation: FY2025 revenue growth guided to 35–40%; monitor Q4 promos and fulfillment capacity around Black Friday/Cyber Monday for quarter-to-quarter timing effects .
  • Product/roadmap: CL adoption strong in-store; SD strong online; connected safety platform (SOS-enabled) broadens TAM and supports potential recurring revenue in 2026+ .
  • Trading setup: Expect near-term estimate revisions upward for EPS given repeated beats, while revenue stays close to consensus; narrative likely driven by Q4 DTC mix and margin commentary.
  • Medium term: Focus on margin expansion, DTC penetration, and execution of connected devices; expanding SKUs within existing partners (e.g., Bass Pro/Cabela’s) can drive unit economics .

Appendix: Additional Q3 Press Releases and Prior Quarter References

  • Preliminary Q3 2025 revenue release with channel breakdown and conversion details .
  • Web traffic surge from AI-created ads; CAC reductions; 66M+ views of “We Don’t Sell Bananas” .
  • Board appointments: Adam Roth (former Nike) and TJ Kennedy (FirstNet/Wrap Technologies), strengthening brand and public safety expertise .
  • Q2 2025 results: revenue $28.5M, gross margin 62%, adjusted EBITDA $4.3M; CL launch; retail pilots; influencer expansion .
  • Q1 2025 results: revenue $26.2M, gross margin 61%, adjusted EBITDA $2.8M; store openings; capacity expansion; ‘Made in America’ initiative .