Flux Power (FLUX) Q2 2026 earnings summary

Executive summary

• Achieved first-ever net profitability, with net income of $0.6M, driven by disciplined expense management, sequential revenue growth, and lower interest costs despite a 16% year-over-year revenue decline.

• Enhanced operational efficiencies through restructuring, right-sizing headcount, and cost optimizations, resulting in a lower cost structure and higher margins.

• Advanced product innovation with the release of next-generation SkyLink telematics, new GAT 315 battery, and AI-driven software features, strengthening market position and customer value.

• Integrated AI-driven tools across engineering, software, and operations to boost productivity and efficiency.

• Order backlog decreased to $3.8M as of December 31, 2025, reflecting reduced order patterns and shorter lead times amid economic and tariff uncertainties.

Financial highlights

• Q2 2026 revenue was $14.1M, up 7.2% sequentially from $13.2M, but down 16% year-over-year from $16.8M.

• Gross margin improved to 34.7% (up 610 bps sequentially), attributed to favorable product mix, cost savings, and lower warranty costs.

• Operating expenses fell to $4.1M, down 31% sequentially and 41% year-over-year, aided by cost reductions and a $0.5M reversal of accrued employee bonuses.

• Net income was $0.6M ($0.03/share), compared to a net loss of $2.6M in the prior quarter and $1.9M year-over-year.

• Adjusted EBITDA was $1.5M, up from a $1.4M loss in the prior quarter and $130K a year ago.

• Cash and equivalents at quarter-end were $0.9M, down from $1.3M at June 30, 2025.

Outlook and guidance

• Expecting materially lower revenue in Q3 2026 due to a significant customer’s capital freeze and ongoing tariff-related uncertainty, which may persist through much of 2026.

• Proactive cost reductions implemented to offset anticipated revenue decline.

• Management remains focused on filling the revenue gap by expanding sales efforts and targeting OEMs, with strategic initiatives for future growth.

• Substantial doubt exists about the ability to continue as a going concern over the next 12 months without a credit facility amendment.