Byrna (BYRN)

Non-lethal weapons company Byrna (NASDAQ:BYRN) met Wall Street’s revenue expectations in Q3 CY2025, with sales up 35.1% year on year to $28.18 million. Its GAAP profit of $0.09 per share was 40.6% above analysts’ consensus estimates.

Company Overview

Providing civilians with tools to disable, disarm, and deter would-be assailants, Byrna (NASDAQ:BYRN) is a provider of non-lethal weapons.

Many law enforcement suppliers companies require licensing and clearance to manufacture products such as firearms. These companies can enjoy long-term contracts with law enforcement and corrections bodies, leading to more predictable revenue. It is still unclear how the recent focus on excessive force and police accountability will impact longer-term demand. On the one hand, lethal force products could become less popular. On the other hand, products such as body cams that aid in the transparency of policing could become standard. Generally, the sector’s fate will also ebb and flow with state or local budgets, and there is high reputational risk, as one mishap or bad headline can change a company’s fortunes.

Byrna’s peers and competitors include Axon (NASDAQ:AXON) and Microvast Holdings (NASDAQ:MVST).

A company’s long-term sales performance is one signal of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Luckily, Byrna’s sales grew at an incredible 79% compounded annual growth rate over the last five years. Its growth beat the average industrials company and shows its offerings resonate with customers.

Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Byrna’s annualized revenue growth of 60.5% over the last two years is below its five-year trend, but we still think the results suggest healthy demand.

This quarter, Byrna’s year-on-year revenue growth of 35.1% was wonderful, and its $28.18 million of revenue was in line with Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 20.1% over the next 12 months, a deceleration versus the last two years. Despite the slowdown, this projection is healthy and implies the market sees success for its products and services.

Although Byrna was profitable this quarter from an operational perspective, it’s generally struggled over a longer time period. Its expensive cost structure has contributed to an average operating margin of negative 1.7% over the last five years. Unprofitable industrials companies require extra attention because they could get caught swimming naked when the tide goes out. It’s hard to trust that the business can endure a full cycle.

On the plus side, Byrna’s operating margin rose by 13 percentage points over the last five years, as its sales growth gave it operating leverage. Still, it will take much more for the company to show consistent profitability.

This quarter, Byrna generated an operating margin profit margin of 10.2%, up 6.2 percentage points year on year. This increase was a welcome development and shows it was more efficient.

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Byrna’s full-year EPS flipped from negative to positive over the last five years. This is a good sign and shows it’s at an inflection point.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Byrna, its two-year annual EPS growth of 97.8% was higher than its five-year trend. We love it when earnings growth accelerates, especially when it accelerates off an already high base.

In Q3, Byrna reported EPS of $0.09, up from $0.04 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Byrna’s full-year EPS of $0.67 to shrink by 29%.

Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.

Byrna’s demanding reinvestments have drained its resources over the last five years, putting it in a pinch and limiting its ability to return capital to investors. Its free cash flow margin averaged negative 9.3%, meaning it lit $9.29 of cash on fire for every $100 in revenue.

Taking a step back, an encouraging sign is that Byrna’s margin expanded by 20.1 percentage points during that time. The company’s improvement shows it’s heading in the right direction, and continued increases could help it achieve long-term cash profitability.

EPS and free cash flow tell us whether a company was profitable while growing its revenue. But was it capital-efficient? Enter ROIC, a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity).

Byrna’s five-year average ROIC was negative 14.9%, meaning management lost money while trying to expand the business. Its returns were among the worst in the industrials sector.

As long-term investors, the risk we care about most is the permanent loss of capital, which can happen when a company goes bankrupt or raises money from a disadvantaged position. This is separate from short-term stock price volatility, something we are much less bothered by.

Byrna burned through $11.04 million of cash over the last year. With $9.00 million of cash on its balance sheet, the company has around 10 months of runway left (assuming its $2.43 million of debt isn’t due right away).

Unless the Byrna’s fundamentals change quickly, it might find itself in a position where it must raise capital from investors to continue operating. Whether that would be favorable is unclear because dilution is a headwind for shareholder returns.

We remain cautious of Byrna until it generates consistent free cash flow or any of its announced financing plans materialize on its balance sheet.

It was good to see Byrna beat analysts’ EPS expectations this quarter. We were also excited its EBITDA outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this was a solid print. The stock traded up 9.2% to $24.90 immediately following the results.

Updated: December 4, 2025 at 10:35 PM EST

Are you wondering whether to buy Byrna or pass? We urge investors to not only consider the latest earnings results but also longer-term business quality and valuation as well.

Aside from its balance sheet, Byrna is a pretty good company. First of all, the company’s revenue growth was exceptional over the last five years. And while its relatively low ROIC suggests management has struggled to find compelling investment opportunities, its rising cash profitability gives it more optionality. On top of that, Byrna’s expanding operating margin shows the business has become more efficient.

Byrna’s EV-to-EBITDA ratio based on the next 12 months is 20.2x. Certain aspects of its fundamentals are attractive, but we aren’t investing at the moment because its balance sheet makes us uneasy. If you’re interested in buying the stock, wait until its debt falls or its profits increase.

Wall Street analysts have a consensus one-year price target of $39.70 on the company (compared to the current share price of $19.31).