Leatt Corp Annual Report - How They Did This Year

I’ve put together this guide to help you understand Leatt Corp’s performance over the past year. We’ll skip the dense financial filings and focus on what actually matters for your investment.

1. What does this company do?

Leatt is a safety-focused gear company. They started with their famous neck brace but now offer a full range of gear for extreme sports. They design helmets, body armor, boots, and technical apparel for motocross and mountain biking.

Think of them as the "Volvo" of extreme sports. They don't just sell gear; they sell peace of mind. Their products are lab-tested and hold global safety certifications. They mostly sell to independent dealers and distributors across 100+ countries. They also sell directly to customers online, which makes up about 10-12% of their total sales.

2. How are they performing?

Leatt had a massive turnaround in 2025. After a tough 2024 with a $1.5 million loss, they bounced back to a $3.26 million profit in 2025. This equals roughly $0.58 in profit per share.

Total sales jumped to $61.9 million, up 40.7% from $44 million in 2024. International sales are a major driver, now accounting for 72% of their total revenue. They are also doing a better job collecting payments from distributors, as their allowance for unpaid bills dropped from $0.6 million to $0.4 million.

3. Financial health & Leadership

The company is in a stable position:

• Cash: They have $12.99 million in cash, which is about 21% of their annual sales.
• Debt: They are essentially debt-free. They have a $5 million line of credit available until 2027, but they didn't use it at all this year.
• Operations: They fund their own growth, generating $4.8 million in cash from daily operations. They also invested in their team by increasing retirement contributions by 12%.
• Leadership: Founder Dr. Christopher Leatt leads research and development, while CEO Sean Macdonald manages the business.
• Alignment: Management received 150,000 new shares in early 2026. These vest over three years, ensuring leadership stays focused on keeping the company profitable.

4. Major wins and risks

• The "Moat": Their reputation for safety and over 100 patents make it very hard for generic competitors to copy them.
• Inventory: They successfully cleared out old stock, reducing inventory from $22 million to $17.5 million.
• Legal: They keep $0.8 million in reserve for potential product lawsuits. While they have a strong track record, a legal loss could impact quarterly profits.
• Taxes: They face uncertainty regarding U.S. taxes and potential tariffs on goods made in Asia. They have $15.3 million in tax credits to offset future state taxes, but these start expiring in 2030.

5. Future outlook

Leatt is betting on the "Adventure" motorcycle market and new bike parts to keep growing. With a return to profit, no debt, and a motivated leadership team, they are set for steady growth. Their main goal for 2026 is to grow their direct online sales from 12% to 15% of total revenue to improve their profit margins.

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Investor Takeaway: Leatt has successfully pivoted back to profitability while maintaining a clean balance sheet. If you are looking at this company, keep an eye on their ability to expand their direct-to-consumer sales, as this will be the primary lever for increasing their profit margins in the coming year.