Wrap Technologies (WRAP) Q1 2026 earnings summary

Executive summary

• Revenue grew 45% year-over-year to $1.1 million in Q1 2026, driven by 186% product sales growth and expanding global demand for non-lethal solutions.

• Bookings reached $3.2 million, with $2.1 million from international sales, reflecting strong global traction.

• Secured a key purchase order from the U.S. Department of Homeland Security, marking early federal adoption.

• Operational focus on agency-wide adoption, federal market entry, and innovation in drone and counter-drone solutions.

• Cash and cash equivalents increased to $7.3 million, supported by a $5.0 million private placement and warrant exercises.

Financial highlights

• Product sales surged 186% year-over-year to $0.9 million, driven by BolaWrap 150 demand.

• Technology-enabled services revenue fell to $0.2 million, reflecting a shift to higher-margin software and subscriptions.

• Gross profit rose 16% to $0.7 million, but gross margin declined to 62% from 78% due to higher hardware mix.

• SG&A expenses increased to $5.4 million, primarily due to higher share-based compensation and sales investments.

• Cash used in operations improved 59% to $1.2 million.

Outlook and guidance

• Management targets approximately 100% revenue growth for 2026, supported by pipeline visibility and Q1 trends.

• Focus on converting pipeline, deepening agency adoption, and advancing federal/international opportunities.

• Operating losses are expected to continue until sufficient scale and recurring revenue are achieved.

• Results will be influenced by government budget cycles, procurement processes, and grant funding availability.

• Anticipates expanding into new international markets and verticals such as healthcare.