Kwesst Micro Systems (NASDAQ:KWE) Soars 70% on Massive Revenue Surge

Shares of military technology specialist Kwesst Micro Systems (KWE) soared after the tiny Ontario, Canada company reported a 588% surge in revenues. The move in the penny stock means it has recovered almost all its year-to-date losses.

KWE stock rallied 70% on its earnings update, which it said was driven by key government contracts, its Lightning SaaS product pilot with the Canadian Red Cross, and growth in its ARWEN business; which is a non-lethal rocket launcher used by the military for riot control. The company also specializes in tactical digital fire control and laser targeting systems for the military.

KWE Earnings Beat

Fiscal 2025 Q1 increased by $0.8 million year-on-year, mainly due to an additional $0.6 million generated from the digitization business line along with an increase of $0.1 million from its non-lethal business line.

Gross profit hit $0.4 million versus a gross loss of $0.1 million in Q1 Fiscal 2024. The increase in gross profit is due primarily to the ramp-up of digitization revenue from government programs, the Canadian Red Cross contract that concluded in the period. 

KWE also cited a ramp-up of its higher margin ARWEN product sales as contributing the strong growth. 

“Q1 2025 was a pivotal quarter for KWESST as we executed on our commercialization strategy.” said Sean Homuth, President and CEO.  “The momentum in revenue growth at very healthy margins underscores the great work our team has done to bring our solutions to market.” 

Product Launch in 2025 to Boost Revenue 

KWE also signalled an upbeat forecast for Fiscal 2025 with the commercial launch of KWESST Lightning, a tactical team awareness tool for first responders. 

It also expects stronger orders for the new ARWEN 40mm ammunition and Para Ops products, which is a family of non-lethal devices that shoot projectiles containing pepper powder that explode on impact. 

How Does KWE Stock Compare?