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.

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…

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.

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…

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.

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?

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.

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.

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?

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.

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

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.

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.

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.

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.

Thanks, Jeremy.

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

Eric, you there?

Eric, can you hear us?

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

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?

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.

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—

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.

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.

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.

Okay. Thanks for taking my questions.

Thank you, Jeff.

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

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.

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.

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?

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—

Very small percentage.

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.

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?

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?

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?

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.

Perfect. Thank you.

Thank you.

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

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?

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.

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?

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.

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.

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.

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.

Got it. Very helpful, guys. Thanks.

Thank you.

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

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.

Thank you. We appreciate your continued interest in—

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.

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