Byrna Technologies Inc. Q3 FY2024 earnings call

• Financial Results: Q3 2024 net income was $1 million, a $5.1 million improvement from a net loss of $4.1 million in Q3 2023. Adjusted EBITDA for Q3 2024 was $1.9 million compared to a negative $2.4 million in Q3 2023. - Advertising Strategy: Successful celebrity endorsement strategy with ROAS of at least 5x; expanded advertising to new mediums like podcast and TV; traditional 30-second ads on News Max have a 6.3x ROAS since inception. - Retail Expansion: Signed lease agreements for new stores in multiple locations; Las Vegas store has a run rate over $1 million a year with 65% gross profit margin. - International: Expanded into Mexico; restructured Byrna LATAM partnership to optimize operations; expects royalty income from Argentina. - Production: Produced over 55,000 units in Q3; implementing second and third shifts; building new ammunition facility in Fort Wayne. - Employee Benefits: Raised starting wages by $2 an hour and all factory employees by 10%; offering bonuses and additional vacation.

For the fiscal third quarter ended August 31, 2024, net revenue was $20.9 million, a 194% jump from $7.1 million in Q3 2023. Direct-to-consumer (DTC) sales on byrna.com and amazon.com accounted for $15.5 million or 74% of Q3 2024 revenue. Gross profit for Q3 2024 was $13 million, or 62.4% of net revenue. For the first-nine months of 2024, net revenue totaled $57.8 million, up 114% from $27 million in the first-nine months of 2023. Gross profit for the first-nine months of 2024 was $35.2 million, or 60.9% of net revenue.

• Full-year revenue expected to be up almost 100%. - September run rate suggests Q4 revenue could be $25 million compared to analyst consensus of $21.65 million. - Expect continued growth in 2025 driven by advertising program, new retail stores, and new products like Compact Launcher. - Marketing spend expected to grow by ~50% in 2025 with ROAS maintained at 5x.

• Supply chain risks, but efforts made to dual source key components to mitigate disruptions like port strikes.

Q: Jeff Van Sinderen from B. Riley Securities asked about adding shifts, supply chain, and inventory.

A: Bryan Ganz said they plan to increase production to 24,000 - 28,000 launches per month, have dual - sourced most components, and inventory at August 31, 2024, was $19.8 million.

Q: Matt Koranda from ROTH Capital Partners asked about fourth quarter revenue range, promotions, and marketing channels.

A: Bryan Ganz said Q4 could be over $25 million, promotions like Black Friday sale will impact, and marketing spend to grow with new endorsers and channels.