Byrna revenue drops 46% as sales reset deepens

Byrna Technologies reported fiscal third-quarter revenue of $15.3 million, down 46% year over year, in an earnings-call transcript published Oct. 9 covering results for the period ended Aug. 31.

The result matters because Byrna's $15.3 million revenue was barely above $15.1 million in operating expenses, while inventory stood at $30 million and the company posted a $2.9 million net loss, according to the transcript.

Results reset

Management described the quarter as part of a reset for the maker of less-lethal personal-defense products, which are designed to incapacitate without a high probability of fatal injury. Byrna moved to a net loss of $2.9 million, or $0.13 a diluted share, from net income of $2.2 million in the prior-year quarter.

“Our results in the quarter reflect our ongoing transition, and while they remain below the level of performance we expect for Byrna, we are seeing signs that many of the initiatives we began implementing this year are starting to gain traction,” Chief Executive Officer Conn Davis said on the call.

Adjusted gross margin was 64.5% in the fiscal third quarter, up from 62% in the second quarter and 500 basis points higher than a year earlier. Gross profit was $12.2 million, or 79.5% of revenue, including a one-time $2.3 million tariff refund.

The revenue weakness came from softer e-commerce sales and slower reorders from retailers. Wholesale channel revenue fell 64% from a year earlier as dealers and chain stores sold through earlier inventory purchases, according to the transcript.

Byrna also reported negative adjusted EBITDA of $1.4 million, compared with positive adjusted EBITDA of $4.1 million in the fiscal third quarter of 2025. Adjusted EBITDA is a non-GAAP profit measure that excludes interest, taxes, depreciation, amortization and certain other costs.

Demand and operations

Operating expenses rose 7% year over year to $15.1 million, reflecting spending on new marketing programs and bad-debt expense. Bad debt totaled $1.7 million and was tied to two large international customers, according to the call transcript.

The company pointed to early digital improvements as evidence that its demand-generation changes are having an effect. Website sessions averaged 29,000 a day in August, the highest daily average since March 2026, and conversion improved from June to August to above 0.6%, though management said that remains below past levels.

Byrna said its social creator network reached more than 50 active influencers, with a combined following of 3.8 million people. Social media engagement rose 95% from the first quarter, and creator-program sales totaled $45,000, exceeding the September internal target by 300%.

The company is also moving production and inventory toward a leaner structure. Ammunition gross margin increased by 1,200 basis points after Byrna shifted to a variable-cost outsourced manufacturing model, and first-pass yield, a measure of products meeting quality standards without rework, exceeded 89%.

Inventory was $30 million as of Aug. 31, compared with $34.1 million in the prior-year period. Management said inventory is expected to decline by $2 million to $3 million in the fourth quarter, helped by moderated production and expected holiday sell-through.

Liquidity also weakened during the quarter. Byrna had $9.4 million in cash, cash equivalents and marketable securities and no debt, down from $10.4 million at the end of the second quarter. Chief Financial Officer Lauri Kearnes said, “Lower collections of accounts receivable weighed on cash during the quarter.”

The company’s recovery plan still depends on channels that management said have not yet returned to desired performance. Davis said, “Partner inventory levels continue to weigh on reorder activity,” and also said traditional influencer channels have declined over the past 18 months and remain below where Byrna wants them.

Byrna closed its acquisition of HERO Defense Systems in August 2026 and said integration is under way. Management plans to relaunch HERO products under the Byrna brand at the SHOT Show in January 2027 and launch a redesigned mobile native website in the first quarter of 2027.

What to watch

In the fiscal fourth quarter of 2026, Byrna said investors can measure whether inventory falls by the targeted $2 million to $3 million from the $30 million level reported as of Aug. 31.

In January 2027, the company plans to relaunch HERO Defense Systems products under the Byrna brand at the SHOT Show, following the acquisition that closed in August 2026.

In the first quarter of 2027, management plans to launch a redesigned mobile native website, a test of whether digital changes can lift conversion from the rate above 0.6% reported from June to August.

Source: earnings-call transcript, The Motley Fool, Oct. 9, 2026