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Byrna Technologies Inc. misses on earnings expectations. Reported EPS is $0.03 EPS, expectations were $0.05.

Operator: Good morning. Welcome to Byrna Technologies Inc.’s fiscal first quarter 2026 earnings conference call. My name is Sherry, and I will be your operator for today’s call. Joining us for today’s presentation are the company’s CEO, Conn Davis, and CFO, Laurilee Kearnes. Following their remarks, we will open the call to questions. Earlier today, Byrna Technologies Inc. released results for the fiscal first quarter ended February 28, 2026. A copy of the press release is available on the company’s website. Before turning the call over to Conn Davis, Byrna Technologies Inc.’s Chief Executive Officer, I will read the safe harbor statement. Some discussions held today include forward-looking statements. Actual results could differ materially from statements made today.

Please refer to Byrna Technologies Inc.’s most recent 10-Ks and 10-Q filings for a more complete description of risk factors that could affect these projections and assumptions. The company assumes no obligation to update forward-looking statements as a result of new information, future events, or otherwise. As this call will include references to non-GAAP results, please see the press release in the Investors section of our website, ir.byrna.com, for further information regarding forward-looking statements and reconciliations of non-GAAP results to GAAP results. Now I would like to turn the call over to Byrna Technologies Inc.’s CEO, Conn Davis. Please go ahead, sir.

Conn Davis: Thank you, Sherry, and thank you, everyone, for joining us today. I want to start by saying how excited I am to be here. This is my first earnings call as CEO of Byrna Technologies Inc., and I could not be more energized about the opportunity in front of us. Over my first several weeks in the role, I have spent a great deal of time assessing the business, and aligning with the team on where I see the greatest opportunities ahead, where we need to sharpen execution. Before I go further though, I want to take a moment to acknowledge Bryan Ganz. What Bryan built here over the past several years is remarkable. He took this company from its Nasdaq listing to one that generated $118 million in revenue last year and built the category leader in less-lethal personal defense.

I am grateful for his leadership and the role he played in building Byrna Technologies Inc. into what it is today. Now, as I have spent time with the business, it has become even clearer to me why this opportunity is so compelling and why this is the right time for me to step into the role. Byrna Technologies Inc. is entering a phase where marketing, ecommerce, and operating execution matter enormously, and those are the areas where I believe my experience and skill set can help the business sharpen its focus and improve performance. When I was evaluating this opportunity, four things in particular stood out to me. First, the company’s mission spoke to me. At Byrna Technologies Inc., we empower people to protect themselves and live safely without the need for lethal force.

The opportunity to both empower individuals and save lives was truly meaningful to me. Second, the market is enormous relative to where our sales are today. At the core of this opportunity is our launcher platform, which addresses a real and growing need for less-lethal personal defense. We have built a strong product and early brand awareness, but the reality is we have only scratched the surface of what this brand can become. There are entire consumer segments we have yet to meaningfully engage that represent a significant growth opportunity. Third, this company has important strengths already in place. The balance sheet is in great shape. We have a truly differentiated product offering that addresses a real consumer need and stands apart in the market.

We have a talented and dedicated team in place. We have a strong manufacturing footprint right here in the United States. And we have a growing retail and dealer footprint that gives us multiple avenues to reach customers. These are the hallmarks of a business that is poised to accelerate. Fourth, and perhaps most importantly, I believe Byrna Technologies Inc. is at a phase where stronger execution can translate the strengths already in place into more consistent growth. The dealer channel is growing, the retail channel is growing, and we have the product innovation pipeline and operational infrastructure to support the next phase of expansion. Taken together, this is a business with meaningful opportunity ahead. But realizing that opportunity will require sharper execution than the company has demonstrated recently.

With that context, let me walk you through how I am thinking about the business’ priorities. First, I am focused on driving deeper penetration into our retail and dealer channels. I believe this represents our single biggest growth opportunity over the next 12 to 18 months. We are continuing to expand our brick-and-mortar presence, and we are focused on improving productivity within that footprint. We are investing in in-store shooting experiences that bring the product to life for new customers and working closely with our retail partners to ensure they have the inventory, education, and tools they need to sell effectively. The data we are gathering from our own retail locations is already informing how we approach merchandising, marketing, and sell-through, and we intend to use those proprietary insights to sharpen our approach across every channel.

Second, we are working to broaden our brand message to reach new audiences and customer segments. Historically, Byrna Technologies Inc. has spoken most effectively to a narrower slice of the market, and there is a much wider audience that this product and mission can and will resonate with. We see evidence that Byrna Technologies Inc. can resonate more broadly when customers engage with the product in a more intuitive and effective way, whether that is in our own stores, in stronger retail presentations, or through guided tools like our new Find the Right Launcher quiz on byrna.com. I will come back to that new tool in a moment, but it is one example of how we can do a better job helping a broader audience understand what product is right for them and why.

Whether it is an early morning runner, a college student walking to their car, or a family on a campout, we believe Byrna Technologies Inc. can become a more relevant and accessible solution for a wider set of customers. That means evolving our message to be more emotionally resonant and more relevant to people’s everyday lives. We want our customers to understand and feel that Byrna Technologies Inc. launchers are there to keep them safe and provide confidence in their ability to protect themselves in real-world situations. As one part of this change, we plan to evolve our influencer strategy to be more inclusive, reaching a broader and more diverse set of customers through new and more impactful media channels. The less-lethal personal defense category should speak to far more people than it currently does, and we intend to lead that conversation.

Third, we are establishing a clear financial algorithm that will help ensure our growth flows through to the bottom line. We will be disciplined in how we deploy capital, focused on improving inventory turns, and committed to leveraging our cost structure so that every incremental dollar of revenue drives meaningful improvement in EBITDA and cash generation. Growth is important, but profitable growth is the goal. With that in mind, we are working to ensure our expanding retail footprint grows the top line and meaningfully improves our cash conversion. Additionally, with our $33 million in inventory, we have a significant opportunity to optimize our working capital and use that cash to invest in our brand strategy. I also want to be clear about our capital allocation philosophy.

The highest and best use of our investment dollars right now is in the core of the Byrna Technologies Inc. business. We are long on the launcher market, and we will continue to invest accordingly. That said, we will remain thoughtful about selective opportunities that can enhance our product portfolio and expand how we address the needs of the marketplace. We have an incredible opportunity ahead of us, and I am excited to be here to help capitalize on it. With that, I will turn the call over to our CFO, Laurilee Kearnes, who will walk you through the financial results for the quarter. Laurilee?

Laurilee Kearnes: Thank you, Conn, and good morning, everyone. Let us review our financial results for fiscal Q1 ended February 28, 2026. Net revenue for Q1 2026 was $29 million, an 11% increase from $26.2 million reported in 2025. The increase was driven primarily by continued sales expansion across dealer and chain store channels, partially offset by typical post-holiday seasonal moderation in the quarter and lower conversion rates on our website. Gross profit for Q1 2026 was $17.4 million, or 60% of net revenue, compared to Q1 2025. The increase in gross profit was driven by the increase in overall sales. The modest change in gross margin was primarily due to the greater contribution of dealer and chain store sales. We do expect to see gross margin expansion in the back half of the year given continued changes in the product mix, modest price increases that we implemented late in the first quarter, and continued efficiency improvement in manufacturing.

Operating expenses for Q1 2026 were $16.5 million compared to $14.2 million for Q1 2025. The 16% increase reflects higher advertising expenses and marketing costs to support revenue growth through the expansion of retail distribution and initiatives aimed at increasing brand awareness and conversion. We also incurred higher costs for legal and other professional fees during the quarter. Net income for Q1 2026 was $800,000 compared to $1.7 million for Q1 2025. Adjusted EBITDA, a non-GAAP metric, for Q1 2026 totaled $2.2 million compared to $3.0 million for Q1 2025. Cash, cash equivalents, and marketable securities at February 28, 2026, totaled $9.6 million compared to $15.5 million at November 30, 2025. The decrease in cash was primarily driven by payment of year-end bonuses and other approved payables.

Inventory on February 28, 2026, totaled $33.1 million compared to $32.7 million on November 30, 2025. As Conn mentioned, we are focused on decreasing the inventory levels to improve our working capital. I will now pass the call back to Conn for additional insights into our performance and future.

Conn Davis: Thank you, Laurilee. Our first quarter results reflect real demand for our solutions, while also highlighting areas where we see clear opportunities to improve execution. I would like to address a few specific areas from the quarter. On ecommerce, byrna.com remains our flagship digital destination and our most mature channel. Conversion did not perform to our expectations in the quarter, and we are taking direct action to address that. The underlying issue is not a lack of interest in the product. Through much of 2025 and into the start of 2026, traffic to byrna.com remained relatively stable outside of promotional periods, but conversion moved materially lower, and average order value also began to come under pressure in fiscal Q1.

To put that more concretely, average daily sessions in January, February, March were approximately 37 thousand, 40 thousand, and 34.5 thousand, respectively, while conversion was about 0.68%, 0.64%, and 0.54%. March traffic was roughly in line with April 2025, when average daily sessions were also about 34.5 thousand, but conversion in March was materially lower than the roughly 0.94% conversion we saw last April and the roughly 1.17% we saw in May. That tells us the issue is not simply traffic generation. It is how effectively we are converting that traffic. We are over-indexed on a static audience, and when new customers do arrive, we are still speaking to the gun enthusiast, failing to align the brand to their needs or educate them on the product.

That is a clear execution issue, and one we are actively addressing. We are investing to meaningfully improve the online experience by making it easier for customers to understand the product, compare our launcher lineup, and ultimately make a purchase with confidence. Customers who cannot experience the product in person need to feel that same level of confidence online. We have recently launched a Find the Right Launcher experience on byrna.com to guide consumers to the right choice for their needs and location. That tool has already generated more than 30 thousand completions and is converting at roughly twice the rate of the overall site, while also giving us richer data on who is coming to byrna.com, what they are looking for, and how familiar they are with the category.

We think that is an important first step in improving education, strengthening conversion, and building a better website experience over time. We have also begun shifting the landing page message away from a weapon-first framing toward a safety- and use case-first approach, one that will be more emotionally resonant with a broader audience. This initial change is part of a much broader shift that you will see across our materials in the coming months. We also launched the Byrna CLXL in February. This is a product we are genuinely excited about, and while early customer engagement in store has been strong, overall performance to date has not yet met our expectations. Just like the Byrna CL, we have found that when customers see it in our company-owned retail locations, they gravitate towards it strongly.

In fact, during March, in our retail stores, the combined CL and CLXL made up almost 80% of launcher sales. The challenge is that we are not yet telling that story effectively online or with our retail partners. We are not drawing a clear enough contrast between our launchers or giving customers a compelling reason to choose the CLXL over our other products. That is a marketing and merchandising challenge, not a product challenge, and it is one we are actively working to solve. Turning to our big box retail distribution, we continue to be encouraged by the trajectory of these relationships. The holiday season provided important lessons around inventory planning and stocking levels, and we are working closely with our partners to ensure they are well positioned heading into the rest of the year.

We are seeing encouraging early indicators of sell-through across key partners, particularly in stores where customers are engaging with the product directly. At one retail partner, where we now have year-over-year comparables, same-store sales increased roughly 164% in Q1 and 92% in March, even before the benefit of additional end cap or shelf display programs. Similarly, stores with dedicated shooting experiences are generating roughly three times the sales of non–shooting experience stores. Those data points reinforce our view that merchandising decisions can materially improve awareness, education, and overall retail velocity. At this stage, our priority is optimizing performance within our existing store base through better inventory planning, appropriate in-stock positioning, and closer coordination with our on-stock levels and reorder cadence.

We are continuing to support our partners with the tools and merchandising needed to drive productivity at the store level. We are also seeing encouraging data in our Byrna Technologies Inc.–owned retail stores. In March, sales across Byrna Technologies Inc.–owned retail grew 16% year over year, and conversion improved from the low 60s in April 2025 to the high 60s in March 2026. Our existing store base also gives us a much stronger platform from which to further expand the physical footprint in 2026. We entered 2025 with approximately 200 chain stores and a 700 total store footprint. We entered 2026 with approximately 900 chain stores and a 1.5 thousand total store footprint, and we expect to expand that further this year through additional chain store growth and targeted dealer additions.

By the end of 2026, we currently expect Byrna Technologies Inc. to be in around 2 thousand total locations, including big box retail and dealers nationwide. Included in this growth, we are excited about our new partnership with Academy Sports + Outdoors. We are beginning with an initial rollout of approximately 50 stores during Q2 with the opportunity to expand from there. Regionally, Academy has a strong presence in Texas and across the Southeast U.S., an area where Byrna Technologies Inc. has not historically had a strong store presence. By the end of 2026, we are targeting Byrna Technologies Inc. to be available at roughly 200 to 250 Academy locations. However, our expansion in retail is not just about store count. It is about retail velocity.

At Bass Pro, for example, we are moving from behind the glass in the firearms section to test high-traffic end caps. This is a critical distinction. Behind the glass requires a salesperson, while on the end cap allows for self-discovery. Moreover, it provides us with another opportunity to leverage enhanced merchandising to express the Byrna Technologies Inc. brand and educate consumers in the retail setting. As we scale towards 2 thousand total stores by year-end, our focus is to continue driving toward an experiential and frictionless retail model, ensuring Byrna Technologies Inc. is seen as an accessible, easy-to-use personal safety device rather than a weapon. We have also recently added Murdoch’s Ranch & Home Supply, a regional retailer with strong presence across the Mountain West, and we look forward to building that relationship further.

Our initial rollout with Murdoch’s will be in 14 of their locations with freestanding displays by the end of Q2, and we are targeting Byrna Technologies Inc. to be available in approximately 30 locations by year-end. From a geographic perspective, we are becoming well established across much of the Western United States, and we continue to evaluate targeted physical store expansions to fill in gaps strategically. Historically, much of our dealer growth was driven by a passive, inbound approach. Dealers frequently came to us and to date the strategy was to evaluate and launch in areas where an incremental dealer may be accretive. We have now shifted to a proactive outbound strategy, and we will be looking to add dealers in selected whitespace markets where we believe additional dealer coverage can support broader brand awareness and retail productivity.

We are seeing healthy momentum in our dealer channel overall. In Q1, our premier dealers grew 60% year over year, and our top 20 dealers grew 55% year over year. While that is not a perfect same-store comparison, it reinforces our view that the opportunity in physical distribution is substantial and sell-through remains strong. The expected year-over-year growth in our brick-and-mortar channel this year is meaningful, and it will be an important step in broadening Byrna Technologies Inc.’s brand presence in 2026. On the channel mix more broadly, we expect our brick-and-mortar sales to continue growing faster than our most mature channel, byrna.com, in 2026. This is a normal and healthy evolution for a brand at our stage. As I mentioned earlier, we have an immediate focus on further improving conversion on byrna.com and making sure that channels work together more effectively.

We are also seeing a continued shift in product mix, with the CL platform representing an increasing percentage of unit sales. Across the portfolio—from the SD to the LE to the CL and the CLXL—we offer a range of products at different price points, allowing us to serve a broad set of customers and use cases. The SD and LE continue to serve as important entry points, particularly for more price-sensitive customers, while the CL platform is contributing to the mix shift towards higher-margin products. We are seeing that the higher-end CL is performing particularly well in retail environments where customers can engage with the product directly, reinforcing our focus on expanding and optimizing our physical store performance with improved in-store presentation, merchandising, and customer education.

Turning to marketing, we are prioritizing the evolution of our message. This is a key area for us, and we see it as one of the most important levers to drive improved performance across the business. We believe there is meaningful opportunity to improve how we communicate the value of our products and convert that into real, sustainable demand. Historically, Byrna Technologies Inc. has focused on the early adopter, the tactical and self-defense enthusiast. While that core remains important, our future growth lies in the normalization of less-lethal protection for more everyday use cases. We know our products resonate with a wider audience when they are presented, merchandised, and explained effectively. Our focus is now on translating that broader relevance into more consistent sales by improving how customers encounter, understand, and purchase the product across every touchpoint.

To be effective, these changes will extend across all of our go-to-market channels as we build an integrated brand and experience everywhere customers interact with Byrna Technologies Inc. Our goal is to meet customers wherever they are and ensure they can engage with and purchase our products in a simple, convenient way for them. To accomplish this, we are refining how we approach marketing to reach customers more effectively across channels. This includes shortening and improving the effectiveness of our creative so it is more impactful, enhancing the website experience to better guide customers through the lineup and educate consumers who are new to the category, optimizing our influencer strategy and messaging to better align with the customer segments we are targeting as we broaden the brand, shifting our media and messaging towards more effective channels, including social media, and being more targeted in how we deploy media in markets where we have strong retail store coverage.

More broadly, we are focused on allocating marketing dollars more effectively and building a more structured, data-driven approach so we can track performance and demonstrate progress over time. Our objective is to better connect awareness to conversion, whether that occurs online or in store, and to do that with more consistency than we have demonstrated recently. On the manufacturing side, we are continuing to drive lean manufacturing and continuous improvement initiatives at our Fort Wayne facility to deliver margin improvement. We believe this, combined with a tighter focus on inventory planning, will help improve inventory turns and support stronger cash conversion over time. We have already taken steps to reduce our build rate so that inventory can come down rather than continue to grow, and we have reduced headcount at the plant accordingly.

We are also making progress on our next-generation modular platform, which is intended to simplify the launcher architecture, significantly reduce component count and labor requirements, and ultimately lower costs. The initial platform will be centered around our .61 caliber system, and we are making strong progress towards the launch in 2027, with the broader rollout extending through next year. It is early, but we are encouraged by the progress and believe this platform will be a meaningful step forward in both product performance and manufacturing efficiency. Looking ahead to Q2, I have spent my first weeks on the job aligned around one clear objective: winning the fight for revenue while simultaneously building the long-term foundation.

Based on what we are seeing today, fiscal Q2 is developing materially below our expectations and below both the year-over-year and sequential improvement we would ultimately expect this business to deliver. Part of that reflects a tougher comparison against last year’s fiscal second quarter, which benefited from the CL launch and initial load-in orders with new retail partners of roughly $2.7 million. To help offset this, we will have our initial retail load-in orders from new partners in Q2 and expect total retail load-in orders in the quarter to exceed $300 thousand. These orders will help boost our floor for the quarter, but given the recent conversion data for March, we understand that we need to be thoughtful and expeditious about the changes we are making to how we manage demand generation, website conversion, retail productivity, and inventory.

We believe those changes are necessary, and they make near-term results more variable and less suitable for providing formal quarterly guidance until we have better operating consistency and stronger visibility. Performance is not where we want it to be, and I want to be direct about the primary reasons for that. First, the business exited fiscal Q1 with a weaker starting point for Q2 than we should have, in part because late-quarter promotional and merchandising actions concentrated more purchases into Q1 than would normally be the case. Second, byrna.com continues to underperform our expectations. Site traffic has remained relatively stable; however, conversion has declined materially, partially due to the growth of our retail channel. Average order value has come under pressure.

This tells us the issue is not simply demand generation, but the effectiveness of our website and our conversion path. Third, while our retail and dealer expansion continues to build a larger base for growth, the contribution from newer chain store openings is expected to build more meaningfully in 2026, consistent with ramp patterns we saw in 2025. The operational changes we are making are to improve the business over time, but they are not changes that will fully move through the system in a matter of weeks. We are focused on improving conversion, strengthening retail productivity, and executing more effectively across channels, which we believe will better position us to build top-line momentum as we move through the back half of the year.

Just as importantly, we are going to be much more active in identifying areas for improvement, addressing them directly, and making the changes needed to improve the business. We are actively working to improve the quarter in front of us, but we are doing so in a way that supports stronger execution and healthier momentum through the balance of 2026. Going forward, we do not plan to continue the prior practice of pre-announcing quarterly revenue. During this period of tightening operational execution and strengthening forecasting capability, we believe providing a single early revenue data point can provide an incomplete picture of the business. Our focus is on improving the underlying operations, financial forecasting, and visibility needed to provide investors with better context through our regular reporting process.

In closing, we are aligning the entire organization around a clear set of objectives and measures. These are not glamorous initiatives, but they are the right ones to drive consistent performance, and they will compound. We believe this is the right moment for Byrna Technologies Inc. to lean in and execute with focus. We are investing in the customer experience, working to expand our reach to new audiences, and strengthening the operational foundation of the business. That is the mindset of a category leader, and that is what we intend to be. I am incredibly proud to be a part of this team. I am grateful to the employees, partners, and shareholders who have helped build Byrna Technologies Inc. into what it is today. I am deeply committed to the mission at the heart of this company, providing people with safe, reliable, effective options to protect themselves and their families without resorting to lethal force.

The mission matters. It resonates and it is far from fully realized. We have the brand, the team, the manufacturing, the balance sheet, and the distribution foundation to improve from here. I look forward to demonstrating that through consistent execution in the quarters ahead. We will now open for questions.

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Operator: Thank you. The company will now be taking questions from sell-side analysts. Our first question is from Jeremy Hamblin with Craig-Hallum Capital Group. Please proceed.

Jeremy Hamblin: Thanks for taking the question. So just wanted to start off by seeing if we can get a little more detail behind the revenue commentary. It sounds like you are expecting sales to be down in Q2 on a year-over-year basis. Based on what you saw in the March period, presumably you are expecting wholesale to be up on a year-over-year basis, but DTC channel to be meaningfully down. It sounds like you are kind of targeting something in the $25 million range, but I wanted to see if you could provide at least a little more color. I know you are not providing formal guidance per se, but just based on the commentary around conversion rates, which sound like they are down pretty steeply, is that a pretty fair interpretation of what you are saying?

Laurilee Kearnes: Hi, Jeremy. Thank you for the question. Yes, I would agree that that is what we are saying. We do expect to be down meaningfully year over year and compared to Q1. Remember, we did have, as Conn pointed out, inventory load-in for some of the new retail partners of $2.7 million versus we are going to have $300 thousand this year. So that is a pretty meaningful change. And really, byrna.com and what we are seeing online, the conversion rates are much lower with similar web traffic coming to the store. So we did benefit in Q2 last year from the CL launch coming out. That had some significant sales. So we do have some of that year-over-year pressure, but we do expect it to be down significantly.

Jeremy Hamblin: And then to that point, I wanted to get underneath the average order values declining, in particular online. So just help us understand that given that it sounds like the CL has been taking share overall, but maybe that is not the case in the DTC channel. Wanted to see if you could comment on that, or if the AOVs are falling because you are not getting the same type of accessory attachments in those orders, but just help us to understand why those AOVs are falling given that you have a more expensive CL launcher now and you have taken price, I believe, in early 2026 on the SD and the LE.

Conn Davis: Hi, Jeremy. Thank you for that. I would say there are a couple of factors driving that. First, you are right, we did take some price. CL mix is not as high online as it is in our retail stores, and that goes back to the conversation I was having earlier where we are not telling the story well enough on byrna.com to drive that upsell into the CL platform. The other piece of this, and I think it is important to understand, is from a marketing perspective, we have been targeting the same audience for a while now, and we are seeing that audience still come back to byrna.com, but they are buying more things like ammunition and accessories for their existing launcher instead of adding another launcher to the cart. And so what we are seeing there is just kind of a shift a little bit into the mix in the bag. Laurilee, do you have any more detail?

Laurilee Kearnes: I think that that is fair. I think as we have this new tool of Find the Right Launcher, and more education online to help people really differentiate the launchers, we know they can differentiate them in store. We want to help them do that online as well, and we believe that will help to drive the average order value increase.

Jeremy Hamblin: Just a clarifying question. What is the CL mix online versus at retail?

Laurilee Kearnes: So at retail, I think we pointed to our retail stores, which is really—we do not really have necessarily store-level detail on all of our partners. Overall, we were seeing for the quarter the CL at roughly 40% of total overall unit sales. But we know in our stores, as we mentioned, given a month of data, it was 80% in our own retail stores. I can follow up with you, Jeremy, on the breakdown of the two.

Jeremy Hamblin: Appreciate that. And then just one last one here. In terms of the gross margin improvement, if you are seeing so much more traction at brick and mortar and that has a lower gross margin profile, why would you expect the gross margin to improve from 60%? It would seem like it would be just kind of stuck in that range, unless you are assuming that there is going to be a much better mix of DTC in the back half of the year.

Laurilee Kearnes: So, I mean, obviously, the back half of the year we get better DTC just because of the holidays themselves, right? So that is part of it. But really, we are continuing to see that mix change, and the CL is a higher-margin product. So as the percentage of CL grows and as we do more to grow that percentage of CL, we expect to see that with the product mix. And we also are really working on the manufacturing efficiencies, and we believe that will lead to higher gross margins as well.

Jeremy Hamblin: Got it. No, I am not saying they are going up drastically, but they are definitely—through the back half of the second half of the year, you will see some improvement in that. Thanks for taking the questions. I will hop out of the queue.

Laurilee Kearnes: Thanks, Jeremy.

Operator: Our next question is from Eric Wold with Texas Capital Securities. Please proceed.

Laurilee Kearnes: Eric, you there?

Conn Davis: Eric, can you hear us?

Operator: We lost Eric. So we are moving on to Jeff Van Sinderen with B. Riley Securities.

Jeff Van Sinderen: Yes. I just wanted to follow up on a couple of things you said. At Bass Pro, I think you said you are shifting to end caps. And I am wondering about the thought process of if it is behind the glass, you sort of are engaging with the salesperson. If it is on the end caps and just open, which is what it sounds like you are doing, how do you engage a salesperson to sort of teach in that product?

Conn Davis: Thank you for the question, Jeff. You know, I will tell you that when it is behind the glass, you almost have to have a salesperson to drive that purchase. When you have got an end cap like that, you have got the opportunity to pull a salesperson in if you have questions, but we also have the opportunity to tell the story right there in store with merchandising materials tied to that end cap. It creates a lot better option for self-discovery but also does not create a purchase barrier by having to get a salesperson involved.

Jeff Van Sinderen: Okay. And then I wanted to follow up a little bit more on marketing. Maybe you could just walk us through the pathway to get on social media because I think there have been some challenges there in the past. Just wondering what you are planning to do there. Absolutely. So—

Conn Davis: As we pivot our brand messaging and our target audience to a wider, more inclusive audience, that audience lives on social media—a lot of it does—and we are going to have to be present there and be native to where our customers are actually going to be able to see and engage and visualize the product. Now, as you mentioned, Byrna Technologies Inc. historically has been limited from paid advertising on social media channels. I do not see that changing in the short term. We are going to have to leverage a much more intentional organic social media presence and rely on social media influencers that have the right audience. By tapping a social media influencer crowd, we will really be able to generate more lifestyle stories about how the Byrna can really impact people’s daily lives, and we believe that will be very resonant with the target audience.

Jeff Van Sinderen: Okay. And then one thing I did not hear much about today—realize you guys have a lot to do—but any sense or any update you can give us regarding plans to launch more recurring revenue lines of business? I know that was talked about previously. I am just wondering how that might take shape over the next year or so.

Conn Davis: Yes. So I think as we look at investment in the business overall, as I mentioned, I am long on the launcher platform. I think that is our best near-term opportunity to continue to grow this business and this brand. That being said, we have recently hired a new head of R&D who has a lot of experience in connected devices and recurring revenue places. I think thinking about how we can do that thoughtfully and intentionally from an organic point of view will be the path forward there rather than trying to go out and purchase, call it, a connected devices platform, which, as I am sure you are aware, are very expensive from a multiples point of view.

Jeff Van Sinderen: Okay. Thanks for taking my questions.

Conn Davis: Thank you, Jeff.

Operator: Our next question is from Eric Wold with Texas Capital Securities. Please proceed.

Eric Wold: Hey, thanks. We will try one more time. Sorry about the technical difficulties. Thanks for the questions. So a couple of questions on the retail channel. You mentioned, Conn, that one of the retailers that you have line of sight to last year’s results are seeing strong same-store sales year over year in Q1 and so far in March. Anything that retailer is doing differently than the other retailers or maybe a different geographical area? Just trying to get a sense of why those trends may or may not be translatable to some of the other retail partners.

Conn Davis: Eric, what is exciting about that is they have not historically done much of anything differently, and their footprint is fairly wide base. So I think that is going to see translation across the retail category. What is exciting about that partnership though is because of the success we have had, we are now able to go in and lean more heavily into merchandising opportunities with counter displays, and really get buy-in from that retailer in order to accelerate faster.

Eric Wold: Got it. And then, yes, I know the exclusive agreement with Sportsman runs through August. You mentioned that the retailers that have the shooting experiences are doing 3x the sales of the other stores that are not. How quickly are retailers on their own moving to make that offering available? What percentage currently offer an in-store shooting experience, and how many do you think could be there by year end?

Conn Davis: Thanks, Eric. I will tell you that beyond the Sportsman’s experience, where you really see that have picked up is in the dealer channel, and our premier dealers all pretty much have shooting experiences in their facilities right there and available. And, Laurilee, what is the percentage of our dealers now that are—

Laurilee Kearnes: Very small percentage.

Conn Davis: Yes. It is definitely less than 10%, sub-10% from a dealer point of view. I would say beyond that, obviously, other retailers are starting to explore what that looks like. I do not have a specific rollout at this point in time for experiences in other mass-market retailers. That will be on a store-by-store basis for those retailers, what they choose to do.

Eric Wold: And just a quick follow-up on that. What is the main pushback or main reason why a retailer is not offering this? Is it space? Is it cost? What is the reason why you are hearing that the retailer also is not moving off of this?

Conn Davis: Eric, you are a little garbled to me. I want to make sure I understood. Are you asking what are we hearing from the retailers that have not yet adopted a shooting experience?

Eric Wold: Yes. What reason are they possibly giving for not moving quickly on that if they are seeing that—if the results are there? Is it the space in the store? Is it a cost? Personnel? Anything you can share on that?

Conn Davis: Yes, it is not really the cost. The cost to do it is not all that expensive. That being said, the space is what is challenging and kind of resetting the stores and planning for that. So it is a longer lead time for that to get done. And I think a lot of those retailers are seeing the success we are having and having more and more thoughts and conversations in that direction.

Eric Wold: Perfect. Thank you.

Conn Davis: Thank you.

Operator: Our next question is from Matt Koranda with ROTH Capital Partners. Please proceed.

Matt Koranda: Hey guys, good morning. Just wanted to hear a little bit more about the near-term conversion trends that you shared, Conn. Maybe just—did you implement any significant changes in March to the messaging that sort of impacted conversion? And then what changes can you make, I guess, on the website specifically to improve conversion in the near term, or is this something that is likely going to take a bit longer before we start to see a lift in conversion?

Conn Davis: Thank you, Matt. I will tell you we are doing the tactical things we can do now, and I will give you a couple of examples of that. One, the Find Your Launcher quiz that we have put in place—we are seeing significant engagement with that online. I mentioned that we are north of 30 thousand completions on that now. That has largely only been available for the past few weeks online. We had tested it before, but it was fairly hidden. We are getting great data around what the consumer is looking for coming to the website when they are trying to learn more about the platform. We are going to leverage that to create specific landing pages and educational pages here in the near term in order to help drive that conversion.

Today, we are seeing consumers who take that quiz convert at twice the rate of the overall website experience. We anticipate being able to continue to drive that up through tactical changes. Additionally, we have pivoted some of the messaging on the website, and we have more work to do there. But from a starting point of view, you used to come to the website and the first thing you would see was a launcher—which obviously looks like a pistol—and a lot of information around some of our historic influencers. That turned some consumers off. We have already pivoted that messaging to be much more lifestyle-focused and about how Byrna Technologies Inc. can be an enabler of safety and confidence, and we are seeing some traction there as well. So I think more to come there, Matt.

We are doing the tactical things now, but over time you are going to see a much bigger shift and reset in the experience online.

Matt Koranda: Okay. This is to get your thoughts, Conn, on the product portfolio and the progression there. It sounds like no change in terms of your posture toward the launcher, and it sounds like you are signaling probably more of an organic development process on connected devices. Any thoughts on sort of how long that organic process could take to get something connected devices–wise? Are we looking at something maybe over the next year plus in terms of introduction? How should we think about the progression of the product portfolio under your leadership?

Conn Davis: No, I appreciate the question, Matt. Clearly, I think the focus and the near-term attention is definitely on the launcher platform and optimizing that. That being said, I would anticipate us testing and learning in that connected devices market at some point before the end of this year, but I do not have any specific timing on what that looks like. Before we were to make a big push there, I think you are right. It is probably a next-year time period if we see success in the test and learn.

Matt Koranda: Okay. Fair enough. And then maybe if I could squeeze one more in. Laurilee, just any thoughts on progression of cash flow for this year? Noticed the inventory balance and what you said in the prepared remarks. But maybe just if you could put a finer point on how we should be thinking about free cash flow this year in light of some of the demand comments you guys also made? That would be helpful.

Laurilee Kearnes: Yes. I think we expect free cash flow to end up being in the mid-teens, some of that coming from EBITDA, some of it really coming from working capital. So I would say that is our base minimum that we are looking for this year. Q1 is obviously always the quarter that we use cash—that is not unusual—but as we continue to work through the inventory changes, we are targeting a meaningful reduction in inventory. We have already taken steps on the production side. So that is where we are looking at for the year.

Conn Davis: Matt, just to be clear, it is a big focus of mine and an initiative to drive that and be much more effective. We are already taking steps to tie production much more closely to what we are seeing from a demand point of view.

Matt Koranda: Got it. Very helpful, guys. Thanks.

Conn Davis: Thank you.

Operator: Our next question is from Jon Hickman with Ladenburg Thalmann. Please proceed.

Operator: And we just lost Jon. So this will conclude our question and answer session. I would like to turn the call back over to Mr. Davis for closing remarks.

Operator: Thank you. We appreciate your continued interest in—

Conn Davis: I want to take this opportunity to thank our investors, customers, vendors, partners, and employees. This journey is only possible because of their tremendous support and belief in our mission of saving lives.

Operator: Thank you for joining us for today’s Byrna Technologies Inc.’s fiscal first quarter 2026 conference call. You may now disconnect.

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