Shares of Wrap Technologies, Inc. WRAP have declined 11.5% since the company reported its earnings for the quarter ended June 30, 2026 compared with a 0.2% change in the S&P 500 Index over the same period. Over the past month, Wrap shares have fallen 13.4%, while the S&P 500 has advanced 4.1%.
Wrap reported a second-quarter 2026 net loss of 4 cents per share, narrower than a loss of 7 cents per share in the prior-year quarter.
Revenues of $2.1 million denoted a 103% surge from $1 million a year earlier.
Product sales climbed to $1.7 million from $0.01 million, while technology-enabled services revenues declined to $0.3 million from $1 million.
Net loss narrowed to $2.3 million from $3.7 million. Net loss attributable to common stockholders was $2.4 million, narrower than a loss of $3.9 million in the prior-year quarter.
WRAP’s Other Key Business Metrics
Gross profit increased 217% to $1.5 million from $0.5 million, while gross margin expanded to 75.3% from 48.1%. Selling, general and administrative expenses rose 15% to $3.6 million, primarily reflecting higher non-cash share-based compensation. Research and development expenses decreased 6% to $0.2 million. The operating loss narrowed to $2.3 million from $2.9 million.
Wrap ended June with $4.8 million in cash and cash equivalents, up from $3.5 million as of Dec. 31, 2025. Total liabilities declined to $2 million from $3.9 million, principally because of the termination of its former Coconut Grove office lease. For the first six months of 2026, cash used in operating activities declined to $3.7 million from $5 million a year earlier.
WRAP: Management Commentary
Management characterized the quarter as the company's strongest in years and emphasized its shift from a single-product business toward a broader portfolio spanning non-lethal restraint, training, body cameras and threat detection. The company sees the ATF's classification of BolaWrap 150 as an instrument of restraint rather than a firearm or weapon as potentially expanding its addressable market, particularly in private security. Management also highlighted returning Department of Justice grant funding and federal opportunities, including a Department of Homeland Security purchase order and training delivered during the quarter.
Wrap is also moving toward a recurring-revenue model through WrapTactics and its learning-management system. Management said the training capability is built and ready to sell, although the associated recurring revenues are expected in future periods rather than being reflected materially in current results.
Factors Influencing WRAP’s Headline Numbers
Revenue growth was driven by increased shipments of BolaWrap 150 devices and cassettes to domestic and international customers following the company's transition toward a more direct, agency-focused sales approach. The decline in technology-enabled services reflected the continued wind-down of managed services and advisory arrangements associated with the W1 asset acquisition, partly offset by growth in WrapVision body-camera and software revenues.
Gross-margin improvement reflected higher product volumes, better absorption of fixed manufacturing overhead and a more favorable revenue mix. The narrower net loss also benefited from the absence of an $0.9 million non-cash warrant-valuation loss recorded in the year-ago quarter.
Other Developments at WRAP
After quarter-end, Wrap pursued a strategic investment in Frenel Imaging and obtained an exclusive license to commercialize its thermal-polarimetric imaging technology in the United States and NATO markets. Wrap intends to integrate the technology into WrapShield, its developing threat-detection and response platform. The company also introduced WrapShield and completed its first operational prototype of Wraptor MX, a multi-shot non-lethal restraint platform. These initiatives remain early-stage, and the timing and amount of any resulting revenues are uncertain.
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Wrap Technologies, Inc. (WRAP): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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