The rise in domestic and global security concerns and weapons-related threats, along with mandated screening requirements domestically and globally, and the correlated need to create safer spaces where we gather, work, learn and play has resulted in a growing demand for solutions.
Historical approaches to weapons threats – like walk-through metal detectors, physical security guards, X-ray machines – were designed for a less sophisticated threat profile, socio-economic environment and world over 50 years ago.
But these traditional approaches do not always address modern-day threat protection requirements, and the expectations of both businesses and individuals alike.
Historically, the requirement for more security comes at a cost of business and guest experience. More security can often feel like a worse experience. These traditional approaches to physical security are sometimes unsophisticated, analog, labor-based (or constrained) approaches that do not scale, are costly, are reactive and create an increasingly negative experience.
Whether people are going to school, watching a sporting event, going to the movies, attending a corporate event or visiting a hospital, security risks are growing, and the physical security industry is shifting to making weapons screening a standard, not an afterthought. Recent legislation in California, Maryland and the UK mandating venues screening for weapons is foreshadowing a view that weapons screening could become a standard in the same manner that sprinkler systems, badge access and wifi have become standard in all buildings.
To address the growing weapons threat issues cost effectively and at scale, and in an approach that addresses today’s problems, requires a digital transformation of the Physical Security industry, in the same manner that digital transformation changed the Banking, Retail, Education, Entertainment and Manufacturing industries, using AI software and tools to provide advanced and pro-active insights, at scale, and cost-effectively.
Xtract One's AI-Driven Approach
Enter Xtract One Technologies (TSX:XTRA)(OTCQX:XTRAF), the technology-driven provider of threat detection and security solutions. The company leverages artificial intelligence to make what it says are unobtrusive weapons and threat detection systems that enable facility operators to prioritize and deliver a "walk-right-in" experience for students, fans, workers, caregivers and others, while providing enhanced safety and protection versus traditional methods. Xtract One's integrated security solutions seek to make metal detectors, long lines, delays and invasive pat-downs a thing of the past.
Xtract One is turning an industry that has seen a lack of innovation for decades on its head. Take its SmartGateway product for starters. It's the company's advanced weapon detection system that utilizes AI-powered sensors to detect concealed weapons, without alerting to other benign objects, without requiring individuals to divest of personal items, wait in long lines, go through a metal detector or be patted down. The technology discreetly scans individuals walking through the system, enabling the smooth flow of people without requiring them to stop or remove personal items, reports the company. Individuals walk right into a venue without stopping, resulting in up to a 7X increase in entry speed for individuals. The SmartGateway can work with all types of events and venues, whether it’s entry into a small facility or a large-scale gathering. The solution is already deployed in hospitals, arenas, schools, manufacturing and distribution facilities and other venues. What's more, Xtract One says the technology can be easily integrated into existing infrastructure, enabling quick deployment.
Then there is Xtract One Gateway (Gateway), which represents a significant portion of the company’s growing business and is specifically designed for weapons detection in environments with a medium volume of personal belongings. The system, which also relies on AI, eliminates the need for heavy X-ray machines or separate bag lines and searches. With Xtract One Gateway, the company says it can reduce secondary screening and bag check times by up to four times and let individuals keep their bags and backpacks with them. The technology unobtrusively scans individuals, their pockets and bags for mass casualty items while distinguishing (and ignoring) non-threatening objects like laptops, 3-ring binders, spiral notebooks, phones, water bottles and other personal belongings, reports Xtract One.
Xtract One says Gateway has proven considerably valuable for educational facilities, with recent major deployments including a significant contract with Volusia County Schools in Florida, one of the largest school districts in the state. The growing adoption of AI-powered weapons detection in educational environments has proven valuable, where traditional security measures often disrupt the learning atmosphere.
As more and more of the 130,000+ schools in the USA investigate adopting weapons screening solutions, Xtract One believes Gateway provides a significant advantage over other approaches. Students simply walk into the schools with all their items, without stopping. No need for emptying pockets, bag searches, X-ray systems and the TSA-like screening approaches typically required.
Bringing it all together is Xtract One View, the company's cloud-based platform that provides oversight of customers' entire fleet of Xtract One's systems from one interface. It provides a central management system to monitor, manage and analyze an entire fleet of systems regardless of whether they are at different facilities. The platform provides the company with a significant SaaS revenue model, providing recurring revenues while fostering strong customer relationships.
All of this translates into a compelling investment for many customers, and the company reports its customers are able to use Xtract One's unobtrusive solutions to enhance security, reduce costs and improve operational efficiency. Whether it's trying to get students into schools faster, helping stadium fans get in safely and more quickly to buy merchandise, food and beverages, or empowering a streamlined process for workplace shift changes, Xtract One says it delivers a bankable ROI for its customers on their operational goals.
Small wonder, then, that the company counts multiple government agencies as customers, and Xtract One has also landed multiple professional sports team contracts for teams in the NBA, MLB and NHL. Recent partnerships include expanded relationships with Global Entertainment venues that prove even further the impact AI-powered weapons detection has across multiple industries.
Even as the company focuses on bringing innovative solutions to its customers and their patrons, Xtract One remains focused on ensuring it maintains its competitive advantage in its segment with high barriers to entry. By leveraging proprietary technology, in-house developed AI software which has been in the making for several years and tested in real-world environments, the company says rivals can't mimic its offerings. To protect its technology, Xtract One has multiple patents or pending patent applications, which should make it difficult for competitors to offer the same level of service.
Xtract One In Growth Mode
While Xtract One was initially focused on arenas and stadiums, it has been pulled, and is expanding into other high-demand market segments, including schools, healthcare and manufacturing/distribution centers – translating into a large set of potential customers who may experience security concerns and violence risks.
All told, it’s a big market opportunity. In the stadium, theater, events and casino markets, Xtract One estimates its total addressable market to be worth $4.6 billion. Adding hotels, hospitals, schools, manufacturing, commercial and real estate to the mix, Xtract One says the total addressable market grows to $39.5 billion. Expand globally, and the market Xtract One can serve is worth $135 billion, according to the company.
It already counts hospitals – including Sentara Healthcare, which operates 12 hospitals across Virginia and North Carolina with 30,000 employees – and arenas like Madison Square Garden Entertainment, which operates Madison Square Garden, Radio City Music Hall and the Beacon Theatre, as customers.
Organizations including the Transportation Security Authority, the Federal Aviation Authority, the National Protective Security Authority and the Department of Homeland Security have also reviewed Xtract One’s technology.
Proof Is In The Results
As the word gets out about Xtract One's AI-driven weapon detection systems, the company is garnering more interest and seeing growing sales. Since 2021, when the company booked less than $200K of business for its screening platform, the company has demonstrated consistent triple-digit growth, with FY2024 results showing triple-digit topline growth year over year as the company grew revenues to a record $16.4 million – compared to just $4.1 million in FY2023.
For the most recently reported third quarter of Fiscal 2025, while revenue of $3.5 million was down from the prior year period of $4.7 million due to timing delays in larger installations, the company says it demonstrated strong underlying business momentum with $4.6 million in new bookings and a robust contractual backlog of $36.5 million – up significantly from $26.6 million the previous year. The company maintained healthy gross profit margins of approximately 57% and is building inventory for its first Xtract One Gateway shipments, representing approximately $6.7 million in order value across initial customers.
The company reports it's achieving this continued accelerated growth with operational costs growing only by single digits based on a highly scalable operational model, underscoring its financial discipline on its path to profitability.
“The momentum we’re seeing across all market segments reflects the growing recognition that AI-powered weapons detection is becoming the standard for modern security operations,” said Peter Evans, Chief Executive Officer of Xtract One. “Our expanding order backlog and diverse customer wins position us well for continued growth as we build on our technology leadership in this rapidly expanding market.”
With a strong and growing order backlog, a list of customer wins and multiple government agencies evaluating Xtract One's technology, the company is one to watch in the sector. Stay tuned to hear more about Xtract One's customer announcements in the months to come on its website.
Featured photo courtesy of Xtract One.
This post contains sponsored content. This content is for informational purposes only and is not intended to be investing advice.
© 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
