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DATE

Thursday, Feb. 5, 2026 at 9:00 a.m. ET

CALL PARTICIPANTS

  • Chief Executive Officer — Bryan Ganz
  • Chief Financial Officer — Laurilee Kearnes

TAKEAWAYS

  • Revenue -- $35.2 million for Q4, a 26% increase from $28 million, and $118.1 million for the full year, up 38% from $85.8 million, driven by expanded brand visibility and retail network growth.
  • Gross Profit -- $21.1 million for Q4 at a 60% margin, up from $17.6 million at a 63% margin; full-year gross profit reached $71.5 million at a 61% margin, up from $52.8 million at 62% margin, with margin pressure tied to dealer/chain store mix and startup costs from new product launches.
  • Operating Expenses -- $17.1 million for Q4, up from $13.5 million, and $59.6 million annually, up from $46.1 million, reflecting higher advertising and marketing spend for retail expansion and new products.
  • Net Income -- $3.4 million for Q4, down from $9.7 million primarily due to a prior-year $5.6 million income tax benefit; full-year net income was $9.7 million versus $12.8 million, but excluding that tax item, net income improved $2.5 million.
  • Adjusted EBITDA -- $6 million for Q4, up from $5 million, and $16.8 million for the year, rising from $11.5 million, reflecting ongoing operating leverage.
  • Cash and Liquidity -- $15.5 million in cash, cash equivalents, and marketable securities at period-end, down from $25.7 million, with inventory increasing to $32.7 million from $20 million due to growth preparation; a new $20 million credit facility was secured post-quarter, split between a $5 million revolver and $15 million delayed draw term loan for acquisitions and working capital.
  • Brick-and-Mortar Expansion -- Brick-and-mortar sales doubled to $31 million from $15.2 million, now representing about half of revenue growth; total retail locations exceeded 1,500, with chain store count rising from roughly 200 to 900, and further expansion anticipated from 500-plus new partner locations, especially in underpenetrated regions such as Texas.
  • Channel Performance -- Show dealers increased sales by 29.9%, premier dealers by 40.4%, traditional dealers by 73.4%, and company-owned stores by 186.5%; Amazon DTC sales outpaced byrna.com, growing 46.9% and now account for 28.6% of DTC volume.
  • Product Innovation -- The Byrna SCL and CLXL were launched, with CLXL priced at $579.99, $30 above the CL; CLXL offers higher capacity (seven plus one magazine) and more power, with margins essentially identical to the CL due to minimal incremental manufacturing cost.
  • Manufacturing and Cost Structure -- Transfer of ammo production to Fort Wayne, Indiana, led to closure of the South African plant, expected to save $1.5 million in 2026; new modular launcher design is on track to reduce bill of materials by 40% and simplify component inventory, with launch targeted for late 2026.
  • Gross Margin Guidance -- CFO Laurilee Kearnes projected gross margin to increase to the 63%-65% range by year-end, aided by the recent 4%-5% price hike, improved product mix, and manufacturing efficiencies.
  • Profitability Strategy -- Management emphasized expanding gross margins and leveraging operating expenses to achieve adjusted EBITDA growth at a rate exceeding revenue growth; cost increases are expected to moderate relative to sales gains.
  • Outlook and Growth Catalysts -- Retail expansion, dealer restocking, mainstream media buys (including a Pittsburgh-market Super Bowl spot), new accessories, and development of connected and subscription-based products are anticipated to drive growth; management expects cash balances to rise through 2026 as inventories normalize and sales grow.
  • Leadership Transition -- CEO Bryan Ganz confirmed ongoing commitment and noted that a search for his successor is in progress, assuring a "smooth and seamless" eventual leadership transition.

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RISKS

  • Gross margins declined from 63% to 60% quarter over quarter and from 62% to 61% year over year, attributed to dealer/chain-store sales mix and one-time startup production costs.
  • Net income fell from $9.7 million in Q4 2024 to $3.4 million, primarily due to the absence of a previous $5.6 million tax benefit; annual net income similarly declined despite underlying business growth.
  • Cash and equivalents declined to $15.5 million from $25.7 million year over year, while inventory increased to $32.7 million from $20 million.
  • Management explicitly expects Q1 to be "well below Q4" due to seasonality, potentially limiting sequential revenue momentum at the start of the year.

SUMMARY

Byrna Technologies Inc. (BYRN +5.65%) delivered robust double-digit revenue and adjusted EBITDA growth, supported by broad-based sales expansion in both retail and direct channels and continued profitability on a GAAP and non-GAAP basis. The company further accelerated brick-and-mortar expansion, entering over 1,500 retail locations and rapidly increasing the number of dealer and chain store partners, especially in new geographic markets. Recent product launches, including the Byrna SCL, CLXL, and upcoming modular launcher, are central to Byrna's margin expansion and cost-efficiency roadmap, with substantial production and design advancements expected to further scale operating leverage in 2026. Management anticipates that recently-implemented price increases, margin-accretive channel shifts, and manufacturing efficiencies will enable a return to higher gross margins, while a new $20 million credit facility supports future strategic flexibility.

  • CEO Ganz stated, "We plan to start rolling out the price point launch version of this revolutionary new modular launcher towards the end of 2026," which may reshape cost structure and expand addressable market.
  • The introduction of the Byrna cam accessory targets a Q2 or Q3 release and aims to unlock new advertising channels previously unavailable to weapons products.
  • Company-owned stores, while delivering high per-location revenue (~$800,000 annually), were deprioritized for broader partnerships given high setup costs and landlord restrictions, favoring scalable big-box strategies.
  • The company flags a strategy to boost recurring revenue through new subscription-based connected devices, investigating both internal development and targeted M&A, but no specific launch or acquisition timeline is disclosed.
  • Cash increased by $6.5 million quarter over quarter, even as share repurchases exceeded $1 million, reflecting strong free cash flow generation in the final quarter.

INDUSTRY GLOSSARY

  • CLXL: An enhanced compact launcher variant from Byrna Technologies Inc. featuring a longer barrel, higher magazine capacity, and greater shot power compared to the base CL model.
  • BOM (Bill of Materials): The comprehensive list of parts, items, assemblies, and sub-assemblies required to manufacture a product.
  • Premier Dealers: Byrna Technologies Inc. classification for retailers with elevated status or scale within its brick-and-mortar distribution channel.
  • Try Before You Buy: An experiential in-store campaign where customers can test fire Byrna launchers prior to purchase, aimed at boosting retail conversion rates.
  • Connected Device: Planned Byrna accessory product intended to incorporate connectivity and potentially enable recurring/subscription revenue streams.
  • SHOT Show: The Shooting, Hunting, Outdoor Trade Show, a major industry event for unveiling new products and forging retailer partnerships.
  • Delayed Term Draw: A portion of a credit facility that can be drawn in the future under agreed terms; in this context, $15 million reserved for potential acquisitions.

Full Conference Call Transcript

Bryan Ganz: Thank you, Kevin, and thank you everyone for joining us today. This morning, we issued a press release providing our financial results and business highlights for the fiscal fourth quarter and full year ended November 30, 2025. I'll start this morning by turning the call over to our CFO, Laurilee Kearnes, who will review our financial results for the period. Following her remarks, I'll discuss the operational highlights that drove our $35.2 million in revenue and continued GAAP and non-GAAP EBITDA profitability for the fourth quarter. I'll then offer insights into our strategy moving forward before we open the call to questions from our covering research analysts. Laurilee?

Laurilee Kearnes: Thank you, Bryan, and good morning, everyone. Let's review our financial results for fiscal Q4 and the full year ended November 30, 2025. Net revenue for Q4 2025 was $35.2 million, a 26% increase from the $28 million reported in 2024. The $7.2 million increase is primarily due to strong dealer and chain store performance with direct-to-consumer and international channels contributing solid year-over-year growth. The comparison also reflects growth over a particularly strong 2024, when demand was elevated around the U.S. Election. For the full year 2025, net revenue totaled $118.1 million, up 38% from $85.8 million in 2024.

This increase was driven by the company's expanded brand visibility, the broadening physical retail presence, and the successful launch of the Byrna SCL. Gross profit for Q4 2025 was $21.1 million or 60% of net revenue, compared to $17.6 million or 63% of net revenue for Q4 2024. The increase in gross profit was driven by the increase in overall sales. Gross margin decline was primarily due to the greater mix of dealer and chain store sales as well as the continued amortization of startup costs associated with the introduction of the CL Launcher and transfer of the ammunition factory from South Africa to Fort Wayne, Indiana.

For the full year 2025, gross profit was $71.5 million or 61% of net revenue, compared to $52.8 million or 62% of net revenue for the same period in 2024. This $18.7 million increase in gross profit was due to the increase in total revenue for the year. The 1% decrease in gross profit margin was once again primarily due to the amortization of product costs associated with the introduction of the groundbreaking new CL launcher and the startup of our new ammunition facility in Fort Wayne, Indiana. Closing the South African operation is expected to save the company $1.5 million in 2026.

Byrna Technologies Inc. expects margin improvement in fiscal 2026 as one-time startup costs associated with the new CL launcher and the new ammunition factory are completed. Additionally, we implemented a broad-based price increase of 4% to 5% as of February 1, 2026. At the same time, we introduced the new Byrna CLXL, expanding the number of variants for the high-margin Byrna SCL launcher. Operating expenses for Q4 2025 were $17.1 million compared to $13.5 million for Q4 2024. The increase reflected higher advertising expenses and marketing costs to support the rollout of more than 500 additional chain store locations in Q4.

The company also increased headcount in its marketing and engineering department as part of its strategic investment in exciting new products and the new markets they will open for Byrna Technologies Inc. This investment is expected to drive significant growth starting later in 2026 and beyond. For the full year 2025, operating expenses were $59.6 million compared to $46.1 million for the same period in 2024, reflecting a 29% year-over-year increase to support our growth. The $13.5 million increase supported the revenue increase and was used to drive consumer awareness of both Byrna Technologies Inc. and the less lethal product category. At the same time, the company invested in retail marketing and engineering.

Net income for Q4 2025 was $3.4 million compared to $9.7 million for Q4 2024. This decrease was primarily driven by a $5.6 million income tax benefit that occurred in the prior year period. The tax benefit arose from the release of tax valuation allowances related to net operating loss carryforwards and other tax assets. For the full year 2025, net income was $9.7 million, down from $12.8 million in the prior year period. Excluding the $5.6 million tax benefit from Q4 2024, net income improved by $2.5 million. Adjusted EBITDA, a non-GAAP metric for Q4 2025, totaled $6 million compared to $5 million in Q4 2024.

This brings adjusted EBITDA for the full year 2025 to $16.8 million compared to $11.5 million in the prior year. Cash, cash equivalents, and marketable securities at November 30, 2025, totaled $15.5 million compared to $25.7 million at November 30, 2024. Inventory at November 30, 2025, totaled $32.7 million compared to $20 million at November 30, 2024. We expect the end of the fiscal first quarter to be a low point in inventory and then we will begin to build it back up to support the ramping demand. Subsequent to quarter-end, the company entered into a $20 million credit facility with Texas Capital Bank.

This is made up of a $5 million revolving line of credit and a $15 million delayed term draw. This credit facility is intended to support strategic growth initiatives, including potential acquisitions. I will now pass the call back to Bryan for additional insights into our performance. Bryan?

Bryan Ganz: Thank you, Laurilee. Fiscal 2025 was truly a landmark year for Byrna Technologies Inc. We scaled Byrna Technologies Inc. from a largely direct-to-consumer business model driven by conservative-leaning celebrity endorsers into a more diversified multi-platform model focused on reaching a broader audience through our nationwide dealer base and expanded advertising opportunities. For the year, we achieved a remarkable 38% revenue growth and we finished the year up 26% in the fourth quarter even when compared to an extremely strong 2025 Q4 that benefited from the uncertainty surrounding the election last year.

The 38% year-over-year growth came on the heels of our extraordinary 100% plus growth in 2024, demonstrating the continued momentum of Byrna Technologies Inc. and the growing acceptance of less lethal personal safety solutions as a mainstream product category. The strong results we delivered in Q4 capped off what has been an exceptional year of execution across all areas of the business. Let me start by discussing our brick-and-mortar outlets, which have been one of the key drivers of our growth this past year. For 2025, Byrna Technologies Inc.'s brick-and-mortar sales increased from $15.2 million in fiscal year 2024 to $31 million in fiscal year 2025, an increase of more than 100%.

This represents approximately half of our year-over-year revenue growth in 2025. This increase was the result of strong performance across all areas of Byrna Technologies Inc.'s brick-and-mortar dealer base with our show dealers up 29.9%, our premier dealers up 40.4%, our traditional dealers, which include both chain stores and independent dealers serviced both directly and through distributors, up 73.4%, and Byrna Technologies Inc.'s company-owned retail stores up 186.5%. From a dollar standpoint, the largest contributor to our extremely strong brick-and-mortar performance was our chain store sales. As we expanded from around 200 chain store locations at the start of 2025 to approximately 900 locations by year-end.

Of particular importance was our partnership with Sportsman's Warehouse, which we kicked off halfway through 2025. What makes Sportsman's so special is the ability for their customers to test fire the complete range of Byrna Technologies Inc.'s handheld launchers as part of our try-before-you-buy campaign. Due to the success of this initiative, Sportsman's is rolling out the Byrna Technologies Inc. program to all but a handful of their locations this year, giving virtually all of Sportsman's customers the opportunity to test fire the Byrna Technologies Inc. launchers in 2026.

In addition, we will be installing our self-contained shooting pods in a number of additional Sportsman's Warehouse locations, essentially doubling in 2026 the number of stores outfitted with Byrna Technologies Inc.'s custom enclosed shooting experience. We expect the growth in our brick-and-mortar sales to continue unabated in 2026 due to three factors. First, our sales were heavily back-end loaded as most of the locations carrying Byrna Technologies Inc. were not online until the end of 2025. This year, we are starting out with 900 chain stores carrying Byrna Technologies Inc. Second, we are going deeper with our current roster of dealers as they expand the range of Byrna Technologies Inc. products they offer, including our brand new Byrna CL XL.

Third, we are continuing to sign up new dealers as they see the success of our existing dealer base. At SHOT Show, we received verbal commitments from large chains representing an additional 500 plus locations. For the most part, these chains are in regions of the country where our current dealers do not have significant coverage, including most importantly the state of Texas. Two years ago, as we looked to expand our brick-and-mortar footprint, we contemplated rolling out up to 100 company-owned stores. While the five company-owned stores that we currently operate are extremely successful, generating approximately $800,000 in annual revenue on average, setting up these stores is expensive and time-consuming.

In addition, finding landlords that will allow us to offer a shooting experience has been difficult. Through our strategic partnerships with big-box retailers such as Sportsman's, we have been able to scale rapidly with minimal capital investments and without the hassle of securing and building out new locations. While our top-line margin is slightly lower selling through our dealers rather than our company-owned stores, our net margin is similar as there is very little in the way of ongoing operating costs once these stores have been set up and personnel have been hired and trained.

The strong performance across these chain stores has been encouraging, particularly during the holiday season, when both Sportsman's and Bass Pro set new weekly sales records for Byrna Technologies Inc. products. In fact, a few of the individual stores are approaching 600 plus brick-and-mortar locations where customers can purchase launchers. These locations are comprised of independent dealers, premier dealers, show dealers, and company-owned retail stores. Altogether, they bring our total footprint to more than 1,500 retail locations where you could touch, feel, and often shoot a Byrna Technologies Inc. before you buy. And as I mentioned, we expect that number to grow to approximately 2,000 locations in 2026.

With respect to our company-owned retail stores, we rolled out four new locations in 2025. These stores ramped quickly, delivering a strong performance for the year. Our Byrna Technologies Inc.-owned and operated flagship locations in Las Vegas, Scottsdale, Nashville, Salem, and Fort Wayne are generating approximately $800,000 in annualized sales per store on average. These locations, along with our Sportsman's Warehouse and Premier dealers, have demonstrated the strength of the experiential retail model and validated the economics of operating our own stores. In addition to the strong economics, these stores have also allowed us to gain valuable information about our customers.

While we do not have immediate plans for the wholesale expansion of the company-owned store model, we are open to establishing additional stores in select markets where we do not have adequate representation. We see our company-owned stores as a valuable test bed for merchandising strategies, customer sales techniques, and product launches that we can then share with our premier dealer and strategic retail partners. To support Sportsman's Warehouse and our other dealers that offer a shooting experience, in 2025, we intentionally directed people from our website to our company-owned stores and to authorized Byrna Technologies Inc. dealers that offer a shooting experience.

While this may be considered a cardinal sin in the world of e-commerce, and likely had some impact on our byrna.com growth rate this year, the strategy allowed us to prime the pump by giving our new dealers a kick start. At the same time, we were able to take advantage of the substantially higher conversion rate at brick-and-mortar locations when customers have an opportunity to test fire the Byrna Technologies Inc. As a result of this initiative and the rollout of 600 additional brick-and-mortar locations, brick-and-mortar dealers were the fastest-growing segment of our business in 2025, as I said, growing more than 100% year-over-year and climbing from 17.7% of sales in 2024 to 26.7% of sales in 2025.

We expect this to continue throughout 2026 and well into 2027 as brick-and-mortar dealers should remain the fastest-growing domestic consumer segment of our business. Although still a small part of our overall business, international sales also continue to show strong momentum, generating 66% growth from the prior year. With regard to our DTC channels, both byrna.com and amazon.com continued to show strong momentum throughout the fiscal year, growing by 18.4% despite our Try Before You Buy campaign where we intentionally sent online customers to authorized Byrna Technologies Inc. dealers. Amazon continues to grow faster than byrna.com, clocking in at 46.9% year-over-year growth for the year.

This was due in part to the fact that only byrna.com had a dealer locator that urged consumers to try before they buy at one of our company-owned stores or authorized dealer locations. As a result of this faster growth in 2025, Amazon now accounts for 28.6% of our DTC sales, up from 23.2% last year. As we mentioned in the past, we are somewhat agnostic about whether the sale takes place on amazon.com or byrna.com as our net margins are somewhat similar due to the savings in advertising, freight, credit card processing fees, and Shopify fees.

Also, due to Amazon's quicker delivery times for its prime customers, we typically see a boost in Amazon sales as we get closer to Christmas because they can deliver in time for Christmas for an additional four to five days longer than we can at byrna.com. The overall increase in sales in 2025, especially in the second half of the year, can be attributed in part to the effectiveness of our AI-enabled advertising campaigns, including our now iconic We Don't Sell Bananas commercial. With these ads, we are able to easily modify our content to meet the different requirements of cable and streaming networks where we could not previously advertise.

This allowed us to expand the number of channels where we could advertise, allowing for broader distribution to a wider audience. This has resulted in Byrna Technologies Inc. being able to secure a Super Bowl commercial spot in the Pittsburgh market for the game this coming Sunday. This will be the first time we are able to run an ad of this prominence, and we are optimistic that it will not only generate immediate sales but also build brand awareness. This year, the purpose is to test the effectiveness of advertising in this iconic event in a single regional market. If it proves to be cost-effective, we look to expand our Super Bowl advertising budget significantly in 2027.

The Super Bowl ad is just one more example of our willingness to be creative as we look to new ways of getting our message out. Several years ago, when we were banned from advertising on Meta and Google properties, we turned to our celebrity endorsement model, with an emphasis on conservative-leaning radio talk show personalities. This program continues to be an important part of our marketing strategy. Our roster has remained relatively unchanged this past year, but we are pleased to welcome back Dan Bongino. Dan stepped away from the podcast during his time with the administration, but prior to his departure, he was one of our highest-performing influencers.

We are excited to resume work with Dan and his team and believe his return will provide meaningful promotional impact for the brand, especially as we expect him to draw a large audience interested to hear about his time in the administration. As part of our effort to expand our marketing advertisement to broaden our consumer reach, we are exploring product placement opportunities. Byrna Technologies Inc. recently was featured in an unsolicited cameo appearance on the HBO hit, I Love LA, underscoring the progress that we have made over the last few years in making Byrna Technologies Inc. a part of the mainstream conversation regarding personal self-defense.

This has led to our decision to help finance a small independent film that will prominently feature our launchers. Viewers of this film will see the product in use in numerous real-life scenarios. More importantly, we will be able to show the product being used in advertisements that promote the movie, something we could not do when we advertise the product itself. These advertisements will drive people to the website for the movie where they will be able to watch the full trailer, listen to interviews with actors discussing the Byrna Technologies Inc. and the value of non-lethal self-defense, and see the products that were used in the film.

We view this initiative as a creative way to reach a new audience, leverage on-screen talent, and further expand the awareness of Byrna Technologies Inc. and the less lethal product category. I'd also like to address our manufacturing initiatives this past year. To support our continued growth, we are increasing monthly production by 33%. We temporarily ramped up production early in 2025 to support the launch of the compact launcher. We are now making permanent changes and refinements to our assembly process, moving from an assembly line process to more efficient production cells that allow each employee to perform a greater number of operations.

This has improved product quality and boosted morale, which should ultimately result in improved margins, which will be further enhanced as we scale production. As a reminder, our Fort Wayne facility has the flexibility to significantly increase output as needed by going to a second or even third shift. With the production cells, we can also easily flex production between the compact launcher, the Byrna SD, and Byrna LE models based on real-time demand trends. I'm also pleased to report that our new ammo factory in Fort Wayne is now the most advanced payload projectile ammunition factory in the world. We can produce both 0.61 caliber and 0.68 caliber ammunition in a lights-off hermetically sealed clean room.

With our new capabilities, the highly anticipated 12-gauge payload rounds will be going into production this month. As we continue to refine our proprietary robotic assembly, welding, inspecting, and packing equipment, we are seeing continued productivity gains. And for the first time since we opened the U.S. ammo factory, we are generating favorable manufacturing variances. I would now like to speak about our new product developments. The release of the compact launcher in May was a pivotal moment for Byrna Technologies Inc. This launch represents the most revolutionary less lethal launcher ever made because of its small form factor and significant stopping power.

Never in the history of less lethal weapons has so much stopping power been available in such a small piece of real estate. It will feature, however, a larger magazine with a seven plus one shot capacity, greater overall shot capacity, and more power than the base CL. With the CLXL, customers can quickly fire 15 shots in rapid succession if necessary. This enhanced version of the CL was developed based on feedback we received from our customers, and as a result, it is no surprise that the CLXL was an overwhelming hit at SHOT Show where we debuted it just a few weeks ago.

At Byrna Technologies Inc., of course, we never sleep, as evidenced by the introduction of the CL in May and now the CLXL. We are constantly looking at ways to improve our launchers and our accessories to enhance the user experience. Towards that end, I am pleased to report that just this week we assembled the first production prototype of our next-generation launcher, and I plan to test fire it next week. It is essentially the same size as the CL but will feature a modular design that will allow us to easily install different engines in the same chassis.

In this way, we can offer different levels of performance, of course, at different price points using the same chassis, in much the same way that Porsche does with its 911 model. Most importantly, this new launcher will have far fewer parts, be easier and quicker to assemble, and most importantly, cost around 40% less to produce. Moving to a single chassis that can accept different engines, we can reach the price point, midpoint, and high-end points of the less lethal market with a single platform. This will significantly simplify factory operations and dramatically reduce component inventory.

We plan to start rolling out the price point launch version of this revolutionary new modular launcher towards the end of 2026, quickly followed by our mid-level and high-level variants. With regard to accessories, every so often I get a call from a Byrna Technologies Inc. customer, Byrna Technologies Inc. owner that has used their launcher in a case of self-defense, and yet they get arrested as the assailant claims that the Byrna Technologies Inc. owner attacked them. If there are no witnesses, it becomes the case of he said, she said.

To help combat that situation and provide Byrna Technologies Inc. owners with the proof that they acted in self-defense, Byrna Technologies Inc. will be bringing out a Byrna cam in late Q2 or Q3 of this year. While there are already cameras that fit on the Picatinny rail of a handgun, these cameras today are very bulky and quite expensive as they must be able to withstand the rigors of firearm recoil. Since Byrna Technologies Inc. has no recoil, we can make a smaller, less expensive camera that will fit on the Picatinny rail of our micro-compact CL and sell for less than $200.

When a Byrna Technologies Inc. owner needs to defend themselves, they can switch on the camera and capture the encounter on both video and audio if they so desire. If they are pointing their weapon at the ground, the camera will show that, allowing them to refute someone that claims he pointed his weapon at me. We introduced the product to our dealer council members last month at a meeting that I attended, and we received overwhelming and enthusiastic support. We have high hopes for this accessory when we introduce it in late Q2 or early Q3 as we continually look to enhance the user experience.

Along the same line, I'm extremely excited about our new subscription-based products that should be the next evolution of Byrna Technologies Inc. Regarding the fiscal outlook, as we look ahead to fiscal 2026, we are confident in our ability to continue to deliver strong top-line growth while expanding profitability. Our balance sheet is strong, with cash increasing $6.5 million from $9 million at the end of Q3 to $15.5 million at the end of Q4, despite spending over $1 million buying back our own stock.

We expect the cash balance to continue to grow throughout 2026 as sales are projected to increase year-over-year each quarter and as we work through the inventory that we built up in preparation for the CL launch that occurred halfway through 2025. In addition to our strong and growing cash balance, we just announced a new $20 million credit facility with Texas Capital Bank. $15 million is earmarked specifically for acquisitions, and $5 million is for working capital should the need arise.

While I do not have anything on the acquisition front that I can announce at this time, we are continually looking for strategic opportunities that would help us further our goals with regards to the development of new products, new markets, and new technologies. In conclusion, many of you are familiar with the rule of 40, whereby growth companies should maintain growth rates and EBITDA that when added together exceed forty. It is understood that as companies become larger, growth rates tend to moderate, while at the same time EBITDA margins expand.

We have been well above the 40 threshold the last couple of years, and we expect to be well above this threshold in 2026 as we continue to grow revenues while simultaneously expanding our margins. We exited fiscal 2025 with tremendous momentum, highlighted by the strong demand we saw on Black Friday and Cyber Monday. The timing of these events falling over the final weekend of fiscal 2025 and into the start of 2026 drove high order volumes and provided a good start for Q1 2026.

Building on this strong start, there are several encouraging catalysts that bolster our outlook for fiscal 2026, including our expanded retail footprint as we start the year with more than 1,500 brick-and-mortar locations carrying Byrna Technologies Inc., strong post-holiday dealer restocking orders, increasing brand awareness driven by both more mainstream advertising placements and new creative ways of reaching the market, and the continued development of new products including the Byrna Cam, our new modular launcher, as well as subscription-based devices as we plan for another strong year. From a profitability standpoint, we are laser-focused on expanding gross margins in 2026.

We expect to be able to increase margins by several percentage points due to one, a more favorable product mix this year as the higher margin compact launcher represents a growing share of our launcher sales; two, continued manufacturing efficiencies and the economies of scale that will reduce manufacturing costs; and three, the price increases that just went into effect a few days ago. On the operating expense side, while we continue to invest in marketing and selectively add headcount to support new initiatives, we expect to see meaningful leverage as our operating costs are projected to grow at a significantly slower rate than our revenue.

We remain in the very early innings of penetrating what we believe is a mass market. Today, there are more than 775,000 Byrna Technologies Inc. in customers' hands, and we believe that the less lethal personal safety category is becoming more universally accepted and Byrna Technologies Inc. is becoming widely recognized as the leader in the less lethal personal self-defense space. Harvard Business School and Stanford released a study in October that looked at the attitudes of gun owners. Interestingly, they found that fully 43% of gun owners preferred a weapon that would incapacitate and not kill.

As such, the Byrna Technologies Inc. was mentioned numerous times throughout the study, and we were the only less lethal company to be mentioned. This strong desire for non-lethal options coupled with Byrna Technologies Inc.'s growing recognition should allow Byrna Technologies Inc. to benefit as the less lethal market continues to expand. As we continue to normalize the category, expand our product offerings across multiple price points, and build out a recurring revenue model, we see a clear and compelling path to sustained multiyear growth. In closing, fiscal 2025 was truly a transformational year for Byrna Technologies Inc.

We achieved record revenues, expanded our retail presence to more than 1,500 stores nationwide, successfully released the compact launcher, brought ammunition production onshore, and laid the foundation for new devices that we believe will augment Byrna Technologies Inc.'s growth in the years to come. I want to thank our team for their exceptional execution, our retail partners for their continued support, endorsers and influencers for helping us reach new audiences, and most importantly, our customers who have embraced Byrna Technologies Inc. as their personal safety solution of choice. We appreciate your continued support and look forward to the year ahead.

Now before I open this up to Q&A, I want to address a question that I've been asked recently regarding my personal plans. As many of you know, my contract with Byrna Technologies Inc. is up later this year, and I turn 68 next month. First, let me assure everyone that I plan to remain involved for as long as the company needs me. As a significant shareholder, I have and will continue to have for some time a substantial personal and financial stake in the future success of Byrna Technologies Inc., and I remain 100% committed to the future success of the company. At the same time, the board and I are conducting a process to identify my successor.

I am pleased to report that we have made good progress, and as soon as we have something to announce, you will hear it directly from me. I want to emphasize that any future transition, when it occurs, will be smooth and seamless as I will do whatever is necessary to ensure the company's ongoing success. 2025 was a great year for the company, and I'm doing everything I can to make sure that we keep up the momentum and continue building on the strong foundation we created as we execute our plan and work to make Byrna Technologies Inc. the undisputed world leader in the less lethal space.

With that, I am now prepared to take questions from our covering analysts. Thank you. The company will now be taking questions from sell-side analysts.

Operator: Our first question today is coming from Jeremy Hamblin from Craig Hallum Capital. Your line is now live.

Jeremy Hamblin: Thank you and congrats on really strong results and a great year in 2025. Turning to 2026, I thought I might start with the new CLXL launcher. Get a sense for the price point that you're expecting, increased shot capability, and see the demand for that. But also just understand how does the margin profile for the CLXL compare to, let's say, the CL and your other launcher products?

Bryan Ganz: That's a great question, Jeremy. And thank you very much for your kind remarks. The CLXL has about a five-eighths of an inch extension on it that allows it to accept a 12-gram CO2, which is much more readily available and also provides for greater shot capacity. It also accepts a seven plus one round magazine. That magazine will fit in any CL. So existing owners can buy this seven plus one magazine, and we think that there will be a strong aftermarket demand. In fact, I think most CL owners will probably buy at least one seven plus one round magazine.

With this seven plus one round magazine and the 12-gram CO2, you would be able to quickly fire off 15 rounds with two magazines. It will also, because it has a barrel five-eighths of an inch longer, propel the projectile at 20 feet per second faster. This will give the projectile more force than the current CL. So for a launcher that has a five-eighths of an inch extension on the end of the barrel, you know, all you're paying for is the boost adapter, the slightly longer barrel, which is measured in pennies, and we're creating a seven plus one magazine rather than the five-round magazine.

As a result, there is not a significant cost difference between these two launchers. We plan to introduce this at $579.99, so $30 more than the current CL. As such, the margins will be essentially identical to the current CL, but it is a strong value proposition for the consumer because if they were to buy the Boost and the Extra Magazine separately, that would be an $80 increase.

Jeremy Hamblin: Understood. Okay. And then in terms of other new products that you're launching this year, with the connected devices, can you give us a sense for how you're expecting to price the connected device products and what you expect the kind of the cost uptake of that initiative to be and whether or not the potential to look at acquisition candidates is more or less related to connected devices or some other area of interest?

Bryan Ganz: Yes. First, let me just say that we're really not at the stage where we can talk about the pricing of these products. We are certainly looking at products where maybe we give away the product for free if there is subscription-based revenue attached to it. That's premature. In terms of the build versus buy model, I mean, that's something that companies deal with all the time. We have a history of buying. We bought Fox Labs. We wanted to get into the pepper spray business. We bought Mission Less Lethal when we wanted to get into the long gun segment of the market. But we have not made any decisions on build versus buy.

We are moving down the development path of these launchers internally, but, you know, if the right strategic opportunity came up, we would certainly consider that.

Jeremy Hamblin: Got it. And then just last one for me. You mentioned really strong reorder rates here at the start of Q1. You guys are in the last month of the quarter, and it sounds like you're expecting some pretty solid growth here in the quarter. Typically, there's a seasonality at play in which Q1 is not nearly as strong as Q4. Can we assume that's likely to be the case again despite the clear increase in the number of retail doors that you're going to be selling through?

Bryan Ganz: Yes. Q1 is clearly a very soft quarter as people are kind of spent from Christmas. And you're absolutely right. We will have a Q1 that, while well above last year's Q1, is well below Q4. So it will come in, you know, between Q4 and, you know, below Q4 and above last year's Q1.

Jeremy Hamblin: Great. Thanks for taking my questions. I'll hop out of the queue.

Bryan Ganz: Thanks so much, Jeremy.

Operator: Thank you. Next question is coming from Jeff Van Sinderen from B. Riley Securities. Your line is now live.

Jeff Van Sinderen: Hi, good morning everyone and let me add my congratulations. I guess if we could maybe just kind of expand on, I know you gave us some comments on Q1, but you also gave some comments on gross margin. Maybe just any more color you can give us on what you expect for gross margin trend over the next couple of quarters? And then what do you think is a good range to contemplate for revenue growth for 2026? And then how would you expect EBITDA margins to develop this year considering gross margin expansion and OpEx leverage? I know there's a lot there to unpack, but...

Bryan Ganz: Yes. You know what, since this is such a difficult question, I'm going to hand it over to Laurilee and let her answer it.

Laurilee Kearnes: Hi, Jeff. Let's start with the gross margin. So I think last quarter, we talked about that we expected our gross margin near the end of 2026 to get up to the 63% to 65% range. And I think we're still looking at that range. Obviously, we'll kind of incrementally grow that throughout the year. We ended the fourth quarter around 60%. So we expect to see that kind of continually grow. Obviously, the price increase helps us, and then the channel mix is built into some of that. So we know we have the channel mix kind of as a headwind against us, the price increase is a tailwind.

But then obviously overcoming some of these manufacturing inefficiencies that we had here last year are helping us. So I think we're still expecting the same range with an increase throughout the year. As far as, I mean, we're not giving revenue guidance. So I'll just say we're not doing that. We do expect to stay in growth mode. We expect, as we've said all along, as we increase our revenue, we expect to expand our EBITDA margins. We continually look for that positive leverage. So you saw this year, right?

I mean, our adjusted EBITDA is growing at a faster pace than our revenue is growing, and that's what we want to continue to see going forward and that we plan to see.

Bryan Ganz: Yeah. And just, I mean, as Laurilee said, we're not giving guidance. The one little bit of guidance I will give is that, as I said, if you look at our growth rates and adjusted EBITDA margins, we're well above forty. We suspect, project that they'll be well above 40 this year as well.

Jeff Van Sinderen: Okay. That's helpful. Appreciate that. And then is there anything more you could tell us about the modular product plans? And then also, is there a recurring component that might be associated with the CAM products that you're introducing?

Bryan Ganz: First off, the modular product we are extraordinarily excited about. Let me just say that our 0.61 caliber Byrna CL has been extremely popular, and the popularity is growing. Although it is not our, it is not the majority of our launchers in units, it is in terms of dollars. And if you look at the locations where you can test fire the launcher, the CL is by far our biggest seller. So when people have a chance to actually hold it and fire it, the CL is extremely important. What we've demonstrated is that we can go to a narrower launcher with a 0.61 caliber round and still be extremely effective.

The reason 0.68 caliber is so popular is this industry started with the conversion of paintball guns. But honestly, 0.61 caliber makes much more sense. It allows us to create a concealable launcher and still have sufficient stopping power and payload to take down an assailant. Our goal is to come up with a range of the entire range based on our 0.61 caliber platform. And what we've been working on for the last year or so is a launcher where we...

Operator: Ladies and gentlemen, do not disconnect. We are reconnecting the speaker line now.

Bryan Ganz: Ladies and gentlemen, reconnecting the speaker line. Please proceed. Okay. I'm sorry, didn't realize that the line had cut out. Jeff, where did I lose you? Where did you lose me?

Jeff Van Sinderen: Sure. No, you were speaking about the range of products based on the 0.61 caliber platform and then you cut off.

Bryan Ganz: Yeah. So look. What I said is Laurilee and the accounting team are very excited about it because with a single chassis, we will have far fewer components. A lot of these components will be able to be used across the entire platform. So we will have a much simpler inventory, smaller inventory, and the cost, both the BOM, the bill of materials, and the time it takes to build the launcher will be significantly lower. So we expect to be able to see significant savings in the cost of these launchers and significant reduction in the inventory that we need to carry. As I said, the first fireable prototype version is being built this week.

I expect to fire it with the team next week. I'm sure it will go through a number of iterations, but we are very confident that we'll be able to release this launcher before the end of 2026. And then I think, you know, in relatively rapid succession, we would come up with the midpoint and high end of the market. But our first goal is to come out with something that's less expensive so that we can address price point into the market while maintaining or frankly improving margins.

Jeff Van Sinderen: Did you say somehow I thought you said something about a 40% reduction in cost to manufacture? Or did I miss that?

Bryan Ganz: No, you got that absolutely correct. So far, the BOM that we have today is 40% less than the BOM for our current launchers, which are all relatively similar. So, yeah, it's a significant savings. We don't know the exact savings in labor, but we know that it's a much simpler design to build. So we expect to see both a savings in labor and an improvement in first pass yield. And the improvement in first pass yield will result in one, better quality, but two, more efficiency in terms of producing the launchers. There'll be fewer launchers that have to go through a rework.

Jeff Van Sinderen: Great to hear. Thanks for taking my questions. I'll take the rest offline.

Bryan Ganz: Thank you.

Operator: Thank you. Next question is coming from Matt Koranda from ROTH Capital Partners. Your line is now live.

Matt Koranda: Hey, guys. Good morning. Several have been asked, but I guess maybe we'll focus on the retail expansion for a moment here. It just sounds like you're focused on both deepening relationships with existing chain stores that you have, but you also mentioned another, I think, 500 locations. Some coming in Texas. Just wanted to hear a little bit about how you think about the growth in that channel between existing and new partners and how that translates to growth this year?

Laurilee Kearnes: Yeah. Hi, Matt. So I think that we're expecting both. We're expecting both this expansion with more chain stores, but also really deepening the chain stores that we have. So as we said, we started the year at just over 200 chain stores. We ended at 900. So halfway, you know, the first half of the year, we didn't have most of those stores last year. So we'll see expansion with that.

I think, you know, also working with all these retail partners with the new products, getting kind of product and inventory optimized, and making sure that they have the support that they need, whether that be retail stands, you know, whatever information that they need to continue to help with the sell-throughs. So I think we've got both of those factors going in 2026.

Matt Koranda: Okay. Alright. Makes sense. Wanted to hear a little bit more about the rollout of the camera or connected product that you mentioned and have discussed a little bit. Sounds like potentially midyear is sort of the timing. Do you need to acquire anything to launch midyear? Or can you do this organically entirely? Then also, I'd I guess, maybe, Bryan, if you could talk about how this could open up incremental advertising channels for you. I know that you're limited in sort of the channels that you can advertise the launchers on, but would the connected device open up a new channel for you?

Bryan Ganz: First, with regard to the cameras, this is something we've been working on for some period of time. This, of course, will not be built in-house. This is something that we have been commissioning with a third-party vendor specifically designed for the Byrna Technologies Inc. As I said, there are cameras available today that work with firearms, but they're much bulkier, bigger, bulkier, and much, much more expensive. Again, I feel strongly that this will come out either late Q2, you know, May or sometime June, July. This will not be a connected device. This will be just a camera where you can record something and download it if you want to use it.

So we have much greater visibility on that. With regard to connected devices, this is a more complicated area. This is an area that we've not been involved in. You know, it's the technology is new for us. And although we've made great progress, and I'm hopeful that we'll see this as a contribution for 2026, it's premature for us to put a date on when we would be able to release that device. Now, having said that, you're absolutely right. Both the camera and any device or frankly, any accessory, we can advertise everywhere. So, you know, I'm sure you've all heard the commercial for Life Alert. I've fallen. I can't get up.

So these type of devices or cameras we can advertise, you know, in places we could not advertise the Byrna Technologies Inc. And I think that it is really important as we look for creative ways to get the word out that we can find new products that will expand our advertising. The other thing that's somewhat interesting about it is that it will allow us to go after the market for consumers that might not buy a weapon and get them into the ecosystem. So, you know, we're hopeful that if we could provide something to somebody that wants a panic button, then you know, maybe down the road, we could sell them a Byrna Technologies Inc.

So, yeah, it's something that the team is working on. It's an important strategy for us, but it's premature for us to put a particular date as to when it's gonna come out.

Matt Koranda: Okay. Maybe just last one, on the modular launcher. Just wanted to hear a little bit about how that slots in with the existing assortment. It sounds like there's probably a lower price point one that could kind of fill out the existing assortment. Could you also manufacture the SDLE and CL on that exit, like, on that chassis on that platform? Is that how we should be thinking about it? Is it may replace the existing assortment over time, or is it really just an entirely new platform?

Bryan Ganz: It's both. I think that there are going to be certain customers that want the 0.68 caliber launchers. The rounds have 27% more payload, you know, just as you see that, you know, although nine millimeter is the most popular handgun, there are still people that want a 44 or 45. So we would not have any plans to discontinue these launchers. But we do believe that they will be, you know, alongside the launchers. There will be a launcher that's 0.61 caliber that is priced at relatively the same level as the SD. There'll be a launcher that is 0.61 caliber that'll be priced relatively similar to the LE.

And then ultimately, we'll have to make a decision on the CL because that's already a 0.61 caliber. That is potentially the only launcher where the new platform may be the next gen of the launcher. That said, the CL just came out recently. It's extremely popular. So I think that this still has, you know, a couple year run ahead of it before we would replace it.

Matt Koranda: Okay. Very clear. Appreciate it.

Bryan Ganz: But we do think that these things will augment it. They'll be incremental to our existing line.

Operator: Thank you. Our next question is coming from Jon Hickman from Ladenburg Thalmann. Your line is now live.

Jon Hickman: Hey, can you hear me okay?

Bryan Ganz: We can, Jon.

Jon Hickman: Oh, hi. So congratulations. Nice quarter. Nice year.

Bryan Ganz: Thank you.

Jon Hickman: Can you elaborate a little bit more on this? Most of my questions have all been answered, of course. But talk about the movie a little bit. When do you expect this to come out? Do you have a working title? Is it direct to TV? Or...

Bryan Ganz: Okay. So with regards to the movie, it is expected to come out later this year. That said, we're not that interested in the success of the film itself. We are more interested in the advertising capabilities it provides to us. Now we do have 1.9 million email subscribers and we will certainly, you know, push them to see the movie. The goal would be for it to be released in a small, maybe 400 theaters, but primarily on one of the streaming services. But honestly, Jon, we're not really involved in that. That's the producer of the film. What we have is the BTS, the behind-the-scenes rights.

So whenever they're filming a scene that involves the Byrna Technologies Inc., we have our own people there. And they're taking video of these stars using the Byrna Technologies Inc. We then get an opportunity to interview them, and those interviews will be on the movie site. So again, we'll be able to advertise, send people to the movie site where they'll hear about people using the Byrna Technologies Inc., their experience, their thoughts on less lethal. And there'll also be an ability to see the weapons that were used in the film and then to go to the Byrna Technologies Inc. website. So it is really more of an advertising platform for us.

That said, I hope the movie does very, very well.

Jon Hickman: Okay. Okay. Is there a title?

Bryan Ganz: There's only a working title. And honestly, I can't share that.

Jon Hickman: Okay. Okay. Well, the rest of my questions, I'll... Oh, one more. You said the... you repeated the 40% kind of gross margin or bill of gross margin improvement. But you said something about... Oh. Hello?

Bryan Ganz: Never mind.

Jon Hickman: Yep. So...

Bryan Ganz: Sorry. That's...

Jon Hickman: Yeah. I'll just take the rest of my questions offline.

Bryan Ganz: Okay?

Jon Hickman: Okay. Thanks, Jon.

Operator: Good. Right. Thank you. We've reached the end of our question and answer session. I'd like to turn the floor back over to Mr. Ganz for any further or closing comments.

Bryan Ganz: Yes. I just want to thank everyone. We really appreciate your continued interest in Byrna Technologies Inc. And again, I want to thank our investors, our customers, our vendors, our partners, and very importantly, our employees. This journey is only possible because of their tremendous support and their firm belief in our mission of saving lives. So thank you very much.

Operator: Thank you for joining us today for Byrna Technologies Inc.'s fiscal fourth quarter and full year 2025 conference call. You may now disconnect.