WRAP TECHNOLOGIES Q2 FY26 earnings call WRAP

Wrap Technologies has transformed from a single-product company into a portfolio of solutions, emphasizing scalable training through its learning management system (LMS). This shift, coupled with the ATF determination that BolaWrap is not a firearm, has opened the significantly larger private security market, which was previously limited. The company is aggressively pursuing this market, having already received its first grant-funded training order.

Wrap secured exclusive U.S. and NATO rights to TriCore by Frenel, a physics-based polarimetric sensing technology. This technology offers a structural advantage in detecting and classifying objects, including RF-silent drones, under challenging conditions. This forms the basis of the new WrapShield platform, which is intended to carry integrated solutions for national defense, border security, and maritime surveillance, addressing emerging threats.

The return of DOJ grant funding, with 11 active programs identified, provides essential purchasing power for small and mid-sized law enforcement departments for BolaWrap, body cameras, and de-escalation training. Wrap is also actively pursuing federal opportunities in Washington D.C., aligning its capabilities with identified funding and requirements in areas like homeland security and counter-UAS, having already delivered training to the Department of Homeland Security.

The company is shifting its focus from selling devices to selling "readiness" through its Wrap Tactics program and LMS. This enables recurring training and proficiency, leading to a subscription-based revenue model. The virtual reality product, Wrap Reality, is also core to this blended training approach, offering immersive de-escalation scenarios and integrating the "totality of circumstances" legal framework.

The ATF declassification of BolaWrap as not a firearm has significantly increased interest from insurance companies. This opens a new channel for market penetration, particularly in private security, where insurance providers are interested in supporting adoption as a risk mitigation tool. Wrap aims to orchestrate partnerships between insurance underwriters, security providers, and customers to offer preferred terms and integrated services.

While the company is not changing its current spending profile of approximately $3 million to breakeven, management indicates a bias towards accelerating investment if market traction develops as anticipated. This could involve accessing capital markets to support growth, acknowledging potential shareholder dilution. The company reiterated its 100% year-over-year revenue growth target for FY26, while noting that timing of^📎 large orders could impact the final outcome.