Wrap Technologies, Inc. Q4 FY2025 earnings call

RAP is a solutions company, not solely a device company. They have a non-lethal response system. In 2025, 78% of agencies with BOLARAP field use had completed instructor's recertification or had embedded master instructor. New agencies came on board mostly in the second half of 2025, with average deal size increasing nearly six-fold. Over 10,000 active BOLORAP units deployed, with over 76% on current generation. Restarted domestic manufacturing. Drone-related technologies are a growth vector, with collaboration with Vector Defense and development of counter UAS technologies. Strategic partnership with Kerasoft Technology for federal and government access. Execution plan for 2026 includes non-lethal response at scale, federal and defense market entry, UAS development, recurring revenue growth, and international expansion.

Full-year gross revenue grew 15% to $5.2 million, driven by strong second-half momentum. Fourth-quarter gross revenue increased 62% to $1.4 million, with product sales more than doubling. Technology-enabled services revenue reached $1.7 million for the full year, up 85% from 2024. Gross margin expanded from 55% to 58%. Total operating expenses decreased 10%. Net loss from operations improved 13% year-over-year. Net loss was $10.3 million compared to $5.9 million in 2024. The year-over-year change was driven by a $6.4 million reduction in non-cash income from warrant fair value adjustments as well as a one-time non-cash impairment expense. The company retained and invested in technology-enabled offerings where customer demand is strongest and exited non-core advisory services.

For 2026, targeting 100% revenue growth based on pipeline, including continued growth in agency-wide deployments, expansion of subscription-based recurring revenue, and international momentum. The target reflects the pace of the business and quality of pipeline, and doesn't include some larger federal opportunities being pursued.

Q: Is the company looking at any additional capital-raising opportunities?

A: No, just raised $5 million, not in market for additional capital but may be opportunistic.

Q: Have you launched non-lethal response? If not, what are the plans?

A: Been soft selling, launch in 30 to 45 days.

Q: You're guiding towards approximately 100% revenue growth. Where is that confidence coming from?

A: From current business results and pipeline.

Q: What's the difference between non-lethal and less lethal and why does that distinction matter?

A: Less than lethal has documented fatalities, non-lethal has zero fatalities, zero serious injuries. Important for customers and communities.

Q: Where does the drone platform stand?

A: Out of lab, testing in controlled scenarios, have customers interested, coming to market this year.

Q: What is the status of RAP federal and your federal government traction?

A: Good government traction, partner Kerasoft provides contract vehicles, staffing up for opportunities.

Q: What does the international pipeline look like and what regions have the most potential or have shown the most interest?

A: Pipeline growing, seeing interest in various offerings including drone program.

Q: Management insiders have been buying stock. Can you speak to the alignment with shareholders?

A: Management and insiders have invested close to $8 million in last two and a half years, showing complete alignment.

Q: What catalysts should investors be watching for over the next 12 months?

A: Advancements in counter UAS business, expansion of tactics program, more federal engagement, international appointments, legislative momentum