Byrna Technologies Inc. (Nasdaq: BYRN) reported its financial results for the fiscal third quarter ended August 31, 2026, revealing a significant year-over-year decline in revenue. Net revenue for the period was $15.3 million, a decrease of approximately 46% compared to $28.2 million in the prior year's fiscal third quarter. The company attributes this drop to a decline in e-commerce sales and slower reorder activity from dealers and chain stores following substantial restocking in fiscal Q1 and slower-than-expected sell-through.
Gross profit for Q3 2026 totaled $12.2 million, representing 79% of net revenue. This compares to $16.9 million, or 60% of net revenue, in Q3 2025. The company notes that the improvement in gross margin is primarily driven by manufacturing efficiency gains and a shift toward higher-margin products. However, the gross profit figure includes a one-time benefit of $2.3 million related to a tariff refund. Excluding this item, adjusted gross profit was $9.9 million, representing an adjusted gross margin of approximately 65%.
Operating expenses for the quarter increased to $15.1 million from $14.1 million in the prior year, an increase of 7%. This rise is largely due to continued investment in new marketing initiatives and $1.7 million in other one-time costs. Consequently, the company reported a net loss of $2.9 million for Q3 2026, compared to net income of $2.2 million in the same period last year.
On the operational front, Byrna completed the acquisition of HERO Defense Systems, LLC, which expanded its product portfolio. The company also transitioned ammunition production to an outsourced model, which improved ammunition gross margins by approximately 1,200 basis points. Additionally, Byrna launched and sold through all available refurbished product inventory and onboarding more than 50 influencers with a combined following of 3.8 million people.
As of August 31, 2026, the company held $9.4 million in cash, cash equivalents, and marketable securities. Inventory levels stood at $30.0 million, down from $34.1 million at the same time last year. Management expects inventory levels to continue normalizing in subsequent quarters, particularly during the upcoming holiday sales period.
