0001140361-26-011401
SEC filingWrap Technologies reported FY 2025 net revenues of $4.7 million, a 3.7% increase from $4.5 million in FY 2024. This growth was driven by an 85.0% increase in technology-enabled services revenue to $1.7 million, partially offset by a 2.3% decline in product sales to $3.5 million. Gross profit improved 9.5% to $2.7 million, with gross margin expanding to 57.8% from 54.7% due to improved product margins and favorable mix. However, the company reported a significant operating loss of $13.5 million, though this represented a 13.4% improvement from the prior year's $15.6 million loss, reflecting cost containment initiatives. Net loss attributable to common stockholders was $11.2 million. The company strengthened its liquidity position through financing activities that generated $10.5 million in cash, ending the year with $3.5 million in cash and cash equivalents. Management believes current liquidity is sufficient for at least the next twelve months.
Wrap Technologies reported FY 2025 net revenues of $4.7 million, representing a 3.7% increase from $4.5 million in FY 2024. Gross revenue was $5.2 million, but this was reduced by $0.5 million in sales returns and allowances related to a distributor return. The company reported a net loss of $10.3 million and a net loss attributable to common stockholders of $11.2 million after accounting for $0.9 million in convertible preferred stock dividends. Operating loss improved to $13.5 million from $15.6 million in the prior year, a 13.4% reduction. The company ended the year with $3.5 million in cash and cash equivalents, down from $3.6 million at the end of FY 2024.
Revenue growth was driven by technology-enabled services, which increased 85.0% to $1.7 million from $0.9 million in FY 2024. This growth was primarily attributable to the acquisition of W1 in February 2025 and expansion of managed services offerings. Product sales declined 2.3% to $3.5 million from $3.6 million, driven by lower distributor orders and continued variability in international demand, partially offset by stable domestic demand for BolaWrap products. International revenue remains lumpy and difficult to forecast due to centralized government procurement processes, while domestic revenue is driven by demand for non-lethal alternatives and training solutions.
Gross margin improved to 57.8% in FY 2025 from 54.7% in FY 2024, primarily due to improved product margins, favorable product and services mix, and continued cost discipline in manufacturing and sourcing. Cost of revenue remained relatively flat at $2.0 million. Operating expenses totaled $16.2 million, with selling, general and administrative expenses of $16.1 million (including $4.0 million in share-based compensation) and research and development expenses of $56 thousand, representing a 97.6% reduction from the prior year due to cost containment initiatives and strategic shift to focus on existing products.
Net cash used in operating activities was $10.3 million in FY 2025, compared to $8.1 million in FY 2024, reflecting higher net losses and working capital changes. Investing activities used $0.4 million primarily for capital expenditures and investments in patents. Financing activities provided $10.5 million from private placements including issuance of Common Stock, warrants, and Series B Preferred Stock. Total assets were $15.4 million, with current assets of $11.4 million including $5.0 million in inventories. Total liabilities were $3.9 million, with stockholders' equity of $11.5 million. The company had an accumulated deficit of $116.3 million.
Management expects to continue incurring operating losses until achieving sufficient scale, margin improvement, and recurring revenue to offset fixed costs. Near-term focus for 2026 includes expanding agency-wide deployments of BolaWrap, increasing utilization of training and subscription-based offerings (Wrap Reality and WrapTactics), and advancing commercialization efforts for WrapVision. The company will continue evaluating counter-unmanned aircraft system initiatives, though timing and scale of resulting revenues remain uncertain and dependent on government testing, funding, and procurement decisions. Results will continue to be influenced by government budget cycles, procurement processes, and grant funding availability. Management believes current liquidity is sufficient to fund operations for at least the next twelve months.