Byrna Technologies (BYRN) Financials

Byrna Technologies’ latest results show a sharp deterioration in sales and profitability, despite a relatively strong balance sheet. Q3 2026 revenue was $15.3 million, down 45.7% from $28.2 million in the restated Q3 2025 period and below $16.4 million in Q2. Revenue had increased substantially from $7.1 million in Q3 2023 and $20.9 million in Q3 2024, but the latest decline reverses that multiyear growth trend.

Gross profit was $12.2 million in Q3 2026, producing an unusually high 79.5% gross margin compared with 60.0% in Q3 2025. However, operating expenses of $15.1 million exceeded gross profit, resulting in a $2.9 million operating loss. Byrna reported a $2.9 million net loss attributable to common shareholders, or $0.13 per diluted share, compared with $2.3 million of net income and $0.09 of diluted earnings per share in the prior-year quarter.

Cash generation remains a concern. Operating cash flow was negative $436,000 in Q3 2026 after being positive $1.4 million in Q2 and negative $4.4 million in Q1. The company also spent $500,000 on acquisitions and $102,000 on property and equipment during the quarter. Cash and equivalents declined from $9.4 million at Q2-end to $8.4 million at Q3-end, while short-term investments added another $1.0 million of liquidity.

• Strong short-term liquidity: Byrna held approximately $9.4 million in cash and short-term investments at August 31, 2026, while total current liabilities were $8.3 million.
• Low reported leverage: Total liabilities were $9.5 million versus $55.1 million of shareholders’ equity, and the statements do not show significant traditional debt obligations.
• Gross margin improved sharply: Q3 gross margin rose to approximately 79.5% from 60.0% a year earlier, although investors should determine whether this improvement is sustainable.
• Accounts receivable declined: Receivables fell to $2.5 million from $4.4 million in Q2 and $8.9 million in Q3 2025, reducing near-term collection exposure.
• Inventory remains elevated: Net inventory was $30.0 million, representing roughly 65% of current assets. This could support future sales, but it also ties up capital and could require markdowns if demand remains weak.
• Restated historical results require caution: Several 2024 and 2025 income and cash-flow periods were restated in the supplied data, which may affect comparisons with previously published results.
• Revenue momentum has weakened: Quarterly revenue fell from $29.0 million in Q1 2026 to $16.4 million in Q2 and $15.3 million in Q3, with Q3 also down nearly half year over year.
• Profitability has reversed: Byrna moved from $801,000 of net income in Q1 2026 to losses of $10.1 million in Q2 and $2.9 million in Q3. The company has not converted its recent revenue base into consistent earnings.
• Operating cash flow remains inconsistent: Q1 and Q3 2026 produced negative operating cash flow, while Q2’s positive result was heavily supported by $11.5 million of noncash adjustments rather than net income.
• Equity reflects accumulated losses: Retained earnings were negative $59.3 million at Q3-end, and the company’s recent losses could continue reducing equity if profitability does not recover.

Overall, Byrna retains a useful liquidity cushion and limited balance-sheet leverage, but the latest operating trends are unfavorable. Investors should focus on whether revenue stabilizes, whether the elevated inventory converts into sales, and whether operating cash flow can become consistently positive without relying heavily on noncash adjustments.