Byrna Technologies Inc. Q2 FY2025 earnings call

• Launch of the Compact Launcher drove 41% year-over-year revenue growth. - Dealer sales to Sportsman's Warehouse increased by $3.9 million, with 21 store-within-a-store locations launched, including 14 with shooting pods. - Company-owned stores are profitable, with Scottsdale, Nashville, Fort Wayne profitable and Salem near profitability. - International sales grew 86% to $2.6 million. - Brought on Tucker Carlson as a celebrity endorser and using AI for content production. - Shifted to more efficient assembly pod-based manufacturing to reduce labor and improve quality.

Net revenue for Q2 2025 was $28.5 million, a 41% increase from $20.3 million in Q2 2024. Direct-to-consumer revenues increased by $2.2 million. Sales to dealers increased by $3.9 million (106%), largely from Sportsman's Warehouse. Gross profit was $17.6 million (62% of net revenue). International sales were $2.6 million, an 86% increase from the prior year. Direct-to-consumer contributed to revenue growth, and dealer sales saw significant expansion with Sportsman's Warehouse.

• Expect top line growth between 25% and 40% due to more stores carrying Byrna products, normalization of the product category, and earned media. - Plan to roll out variations of the Compact Launcher across pricing spectrum. - Cash position expected to rebound as inventory levels normalize. - Third quarter is typically slower, but focus on operational priorities and market expansion.

• Soft market conditions leading to potential sticker shock and higher abandoned carts. - Cannibalization of LE launcher by Compact Launcher due to price difference. - Market uncertainty from economic factors like interest rates and tariffs affecting consumer spending.

Q: Could you give a sense for growth in June and near-term sustained growth rate?

A: Saw strength during civil unrest, but it's transitory. Expect 25% to 40% growth.

Q: Where is softness showing up?

A: Slightly higher abandoned carts, sticker shock on pricing, and softer market despite growth.

Q: Clarify shop-in-shops and POS locations performance?

A: Some POS locations outperform shop-in-shops, but need to educate sales force and provide incentives.

Q: Thoughts on channel mix evolution?

A: Brick-and-mortar to grow faster than online, with Amazon growing faster than Byrna.com within online.

Q: Elaborate on recurring revenue with CL?

A: Byrna Care is like an insurance program with monthly/annual fees; future chipset will enable smart features for recurring revenue.

Q: Expenses and inventory impact?

A: Q2 had extra expenses from CL launch, expect OpEx to stabilize, inventory levels to normalize.

Q: Why is Scottsdale store doing well?

A: Good location, wealthy community, good salespeople, and encouraging for retail model and premier dealers.