| Written by Nathan Reiff 
2025 has been a remarkable year for the defense industry. Look no further than a benchmark exchange-traded fund (ETF) like the Global X Defense Tech ETF (NYSEARCA: SHLD), which has returned about 65% year-to-date (YTD). While a surge in defense stocks may be suitable for investors, it often comes at the price of geopolitical stability, and ongoing tensions between the United States, Russia, China, and other major players are likely a significant contributing factor in the industry's rally this year. Byrna Technologies Inc. (NASDAQ: BYRN) is not a stock appearing in SHLD's basket or the portfolio of many different defense-focused ETFs. However, this small-cap name with a market cap of $513 million has some of the industry's most adamant analyst support. Plus, given BYRN's 20% share price decline YTD, investors may have a unique opportunity to buy at a relatively low price. Broad Appeal and Growing Retail Access Byrna's products, including handheld personal security devices, shoulder-fired launchers not requiring firearm licenses, and self-defense aerosol products, among other items, have a broad appeal to both law enforcement customers and private individuals looking for innovative ways to protect themselves. A key factor in Byrna's appeal is its use of so-called "less-lethal" products, an alternative to traditional self-defense tools. One can look at two recent sales for evidence of growing demand for Byrna products. First, there's Byrna's July 4th holiday promotion, in which web sales surged 18% year-over-year (YOY). Second, Amazon.com Inc.'s (NASDAQ: AMZN) popular Prime Day event generated sales of Byrna products 28% higher than they were a year ago. Byrna is adept at maneuvering to meet this higher demand level. As of late July 2025, the company's products were available in nearly 300 brick-and-mortar retail locations, an increase of almost three-quarters compared to one year prior. Despite the substantial growth in retail footprint, this is likely only a midpoint, as Byrna plans to expand its offerings to about 500 retail locations by the end of the company's fiscal third quarter in August and 800 by late November. The company believes its products speak for themselves. The partnership with big-box retailers will allow potential customers to experience holding or even testing the products, which is key given what Byrna executives call a 60% conversion ratio among potential customers testing its launcher product. Demand Yields Earnings Results The firm's second-quarter earnings results, released on July 10, show that the climbing interest in its products has already translated into tangible financial benefits. For that period, which ended May 31 and thus did not include either of the sales events above, Byrna reported 41% YOY revenue growth and 22% YOY earnings per share (EPS) improvement, each beating analyst predictions. As a rapidly growing company, investors will expect Byrna to expand its product line-up and visibility while increasing its brand. This has indeed been the case, with the firm depleting its supply of cash and marketable securities to $13 million from nearly $26 million in recent months. However, the company is debt-free, which gives it substantial breathing room as it continues its aggressive expansion project. If Byrna can improve its gross margin, which has plateaued at 62%, it may be able to further increase its cash reserves. Watch for Recurring Revenue, Potential for Customer Softness Investors should consider two other factors that may impact Byrna's future performance. First, the company plans to build up its recurring revenue streams through SaaS-type development services and an insurance policy designed on a recurring payment system. These could help Byrna make its customer base more sticky, which is essential given that most customers are unlikely to purchase expensive self-defense products repeatedly. On the other hand, the cost of these products could also be a downside for Byrna. In its most recent earnings call, company executives pointed to cart abandonment rates for customers shopping online, suggesting that some customers may face sticker shock when they see the prices of Byrna's products. Particularly given that a host of external factors dampen consumer spending, this could prove problematic for Byrna.  Read This Story Online | 
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