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Wrap Rises 3% Despite Incurring Q1 Loss on Higher Operating Costs
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Shares of Wrap Technologies, Inc. (WRAP - Free Report) have gained 2.8% since the company reported its earnings for the quarter ended March 31, 2026, outperforming the S&P 500 index’s 0.2% growth over the same period. However, over the past month, the stock has declined 1.3%, lagging the S&P 500’s 5.7% increase.
Wrap Technologies incurred a first-quarter 2026 net loss of 9 cents per share compared with breakeven results in the prior-year quarter.
Revenues of $1.1 million reflected a 45% rise from $0.8 million in the year-ago quarter, driven by strong growth in product sales. Product revenues surged 186% to $0.9 million from $0.3 million, reflecting higher shipments of BolaWrap 150 devices and cassettes to domestic and international customers. Technology-enabled services revenue, however, fell 50% year over year to $0.2 million from $0.5 million due to the wind-down of certain advisory and investigative service arrangements.
The company posted a net loss of $4.5 million against a net income of $0.1 million in the prior-year period. Gross profit rose 16% to $0.7 million, though gross margin contracted to 62.2% from 77.8% as hardware product sales accounted for a larger share of revenues.
Wrap Technologies, Inc. Price, Consensus and EPS Surprise
Management said the quarter reflected improving commercial traction and increasing adoption of its non-lethal public safety solutions. CEO Scot Cohen noted on the earnings call that the company’s sales pipeline continued to strengthen into the second quarter and reiterated management’s target of achieving 100% revenue growth in 2026.
The company highlighted recurring revenue growth from cassettes and consumables tied to its expanding installed base of BolaWrap devices in active field use. Subscription activity in Wrap Reality, WrapTactics and WrapVision also increased during the quarter. International expansion contributed to growth, with the company citing activity in India, Panama, Brazil, Malta and the U.K.
Bookings increased to $3.2 million during the quarter, signaling improving order momentum. The Americas generated $0.6 million in revenues, while Europe, the Middle East and Africa contributed $0.5 million, up sharply from $0.1 million a year earlier.
Expense Trends and Profitability
Operating expenses increased 21% year over year to $5.5 million. Selling, general and administrative expense climbed 29% to $5.4 million, primarily because of higher share-based compensation costs. Share-based compensation allocated to SG&A totaled $2.4 million, up from $1.7 million in the prior-year quarter. Cash-based SG&A expenses also rose due to investments in sales expansion and professional fees.
Research and development expense declined 72% to $0.1 million as the company shifted to a more variable-cost development model and reduced headcount dedicated to research activities. Management said its primary platforms, including BolaWrap 150, WrapTactics, WrapVision and Wrap Reality, have moved beyond the core development phase into commercialization.
Operating loss widened to $4.8 million from $3.9 million a year ago. The year-ago quarter also benefited from a $4 million non-cash gain related to changes in the fair value of warrant liabilities, which did not recur in 2026.
Liquidity and Capital Position
Wrap Technologies ended the quarter with cash and cash equivalents of $7.3 million, up from $3.5 million at Dec. 31, 2025. Working capital improved to $12.6 million from $9.6 million at the end of last year. The increase was driven mainly by $5 million in proceeds from a February 2026 private placement and $0.1 million from warrant exercises.
Net cash used in operating activities improved to $1.2 million from $3.1 million in the prior-year quarter, helped by better working capital management, collections of accounts receivable and lower inventory balances. Management said the company believes its current cash position is sufficient to fund operations for at least the next 12 months.
Management Outlook and Strategic Initiatives
Management maintained its target for 100% revenue growth in 2026, citing improved pipeline visibility and increasing agency-wide adoption trends. The company continues to focus on expanding deployments of BolaWrap devices, increasing subscription-based software revenue and advancing commercialization of its WrapVision body-camera platform.
Executives also pointed to early traction in counter-drone and drone-interdiction initiatives under the MERLIN program. Management disclosed preorders for drone and counter-drone systems, including orders across the U.K. and Europe, as well as follow-on DFR-X orders in Panama.
Other Developments
During the quarter, Wrap Technologies completed a $5 million private placement involving common stock, pre-funded warrants and common warrants. The financing closed on Feb. 3, 2026.
The company also terminated the lease for its Coconut Grove, Fla., office in February 2026, generating a non-cash gain of $0.2 million tied to the derecognition of lease liabilities. It subsequently entered into a month-to-month service agreement for a new Miami business address.
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Wrap Rises 3% Despite Incurring Q1 Loss on Higher Operating Costs
Shares of Wrap Technologies, Inc. (WRAP - Free Report) have gained 2.8% since the company reported its earnings for the quarter ended March 31, 2026, outperforming the S&P 500 index’s 0.2% growth over the same period. However, over the past month, the stock has declined 1.3%, lagging the S&P 500’s 5.7% increase.
Wrap Technologies incurred a first-quarter 2026 net loss of 9 cents per share compared with breakeven results in the prior-year quarter.
Revenues of $1.1 million reflected a 45% rise from $0.8 million in the year-ago quarter, driven by strong growth in product sales. Product revenues surged 186% to $0.9 million from $0.3 million, reflecting higher shipments of BolaWrap 150 devices and cassettes to domestic and international customers. Technology-enabled services revenue, however, fell 50% year over year to $0.2 million from $0.5 million due to the wind-down of certain advisory and investigative service arrangements.
The company posted a net loss of $4.5 million against a net income of $0.1 million in the prior-year period. Gross profit rose 16% to $0.7 million, though gross margin contracted to 62.2% from 77.8% as hardware product sales accounted for a larger share of revenues.
Wrap Technologies, Inc. Price, Consensus and EPS Surprise
Wrap Technologies, Inc. price-consensus-eps-surprise-chart | Wrap Technologies, Inc. Quote
Product Demand and Revenue Trends
Management said the quarter reflected improving commercial traction and increasing adoption of its non-lethal public safety solutions. CEO Scot Cohen noted on the earnings call that the company’s sales pipeline continued to strengthen into the second quarter and reiterated management’s target of achieving 100% revenue growth in 2026.
The company highlighted recurring revenue growth from cassettes and consumables tied to its expanding installed base of BolaWrap devices in active field use. Subscription activity in Wrap Reality, WrapTactics and WrapVision also increased during the quarter. International expansion contributed to growth, with the company citing activity in India, Panama, Brazil, Malta and the U.K.
Bookings increased to $3.2 million during the quarter, signaling improving order momentum. The Americas generated $0.6 million in revenues, while Europe, the Middle East and Africa contributed $0.5 million, up sharply from $0.1 million a year earlier.
Expense Trends and Profitability
Operating expenses increased 21% year over year to $5.5 million. Selling, general and administrative expense climbed 29% to $5.4 million, primarily because of higher share-based compensation costs. Share-based compensation allocated to SG&A totaled $2.4 million, up from $1.7 million in the prior-year quarter. Cash-based SG&A expenses also rose due to investments in sales expansion and professional fees.
Research and development expense declined 72% to $0.1 million as the company shifted to a more variable-cost development model and reduced headcount dedicated to research activities. Management said its primary platforms, including BolaWrap 150, WrapTactics, WrapVision and Wrap Reality, have moved beyond the core development phase into commercialization.
Operating loss widened to $4.8 million from $3.9 million a year ago. The year-ago quarter also benefited from a $4 million non-cash gain related to changes in the fair value of warrant liabilities, which did not recur in 2026.
Liquidity and Capital Position
Wrap Technologies ended the quarter with cash and cash equivalents of $7.3 million, up from $3.5 million at Dec. 31, 2025. Working capital improved to $12.6 million from $9.6 million at the end of last year. The increase was driven mainly by $5 million in proceeds from a February 2026 private placement and $0.1 million from warrant exercises.
Net cash used in operating activities improved to $1.2 million from $3.1 million in the prior-year quarter, helped by better working capital management, collections of accounts receivable and lower inventory balances. Management said the company believes its current cash position is sufficient to fund operations for at least the next 12 months.
Management Outlook and Strategic Initiatives
Management maintained its target for 100% revenue growth in 2026, citing improved pipeline visibility and increasing agency-wide adoption trends. The company continues to focus on expanding deployments of BolaWrap devices, increasing subscription-based software revenue and advancing commercialization of its WrapVision body-camera platform.
Executives also pointed to early traction in counter-drone and drone-interdiction initiatives under the MERLIN program. Management disclosed preorders for drone and counter-drone systems, including orders across the U.K. and Europe, as well as follow-on DFR-X orders in Panama.
Other Developments
During the quarter, Wrap Technologies completed a $5 million private placement involving common stock, pre-funded warrants and common warrants. The financing closed on Feb. 3, 2026.
The company also terminated the lease for its Coconut Grove, Fla., office in February 2026, generating a non-cash gain of $0.2 million tied to the derecognition of lease liabilities. It subsequently entered into a month-to-month service agreement for a new Miami business address.