Flux Power (FLUX) Q1/Q2 2025 earnings summary

Executive summary

• Revenue grew 9% YoY in Q1 FY2025 to $16.1M, driven by Ground Support Equipment demand; Q2 revenue declined 8% YoY to $16.8M due to lower material handling demand and product mix.

• Gross margins improved sequentially, reaching 32% in Q1 and 33% in Q2 FY2025, reflecting cost reductions, price increases, and supply chain initiatives.

• Net loss narrowed to $1.7M in Q1 FY2025 from $2.2M prior year; Q2 net loss widened to $1.9M from $0.9M prior year, mainly due to higher operating expenses and restatement costs.

• Leadership changes included a new CEO, CFO, and key executive appointments to drive innovation, sales, and engineering.

• Strategic focus on expanding product lines, entering adjacent markets, leveraging telemetry solutions, and forming new partnerships, including private label programs and battery recycling.

Financial highlights

• Q1 FY2025 revenue: $16.1M (+9% YoY); Q2 FY2025 revenue: $16.8M (-8% YoY); Q1 gross profit: $5.2M (+23% YoY, margin 32%); Q2 gross profit: $5.5M (+2% YoY, margin 33%).

• Adjusted EBITDA loss improved to $0.6M in Q1 FY2025 (vs. $1.2M loss prior year); Q2 adjusted EBITDA loss $1.0M (vs. $0.2M gain prior year).

• Net loss: $1.7M in Q1 FY2025 (vs. $2.2M prior year); $1.9M in Q2 FY2025 (vs. $0.9M prior year).

• Cash at Dec 31, 2024: $0.9M; available credit lines total $7.3M; $1M subordinated line; $16M credit facility expandable to $20M.

• Net cash provided by operations: $3.8M for six months; net cash used in financing: $3.2M.

Outlook and guidance

• Q3 FY2025 revenue expected to be in line with Q2; Q4 projected to increase 5%-10% over Q3.

• Management anticipates break-even to positive cash flow and adjusted EBITDA profitability in Q4 FY2025 or calendar 2025.

• Positive long-term outlook supported by a $19.5M backlog as of February 28, 2025, and replacement cycle demand.

• Revenue growth targeted via new orders, expanded product mix, and supply chain optimization, but order delays may persist due to customer capital spending and interest rate uncertainty.

• Company warns that current cash and credit lines may be insufficient for the next 12 months; additional funding or cost reductions may be required.