Fly-E Group (FLYE) Q2 2026 earnings summary

Executive summary

• Net revenues for the quarter ended September 30, 2025, declined 42.7% year-over-year to $3.9 million, and for the first half fell 37.2% to $9.2 million, mainly due to a 61% drop in average unit price and lower retail sales after lithium battery safety incidents and store closures/disposals.

• Net loss increased 55.4% year-over-year to $1.8 million for the quarter and reached $3.8 million for the first half, driven by lower revenues, reduced gross margin, and higher interest expenses.

• The company shifted focus to wholesale and rental segments, with wholesale revenue up 91.3% year-over-year in Q2 and rental business gross margin at 79.8%.

• Operating expenses declined 51% year-over-year in Q2, reflecting cost optimization and retail store closures.

• Significant legal proceedings were initiated, including a federal securities class action and two shareholder derivative actions, related to alleged misstatements about lithium battery safety and a sharp stock price decline.

Financial highlights

• Gross margin for the quarter was 25.0%, down from 42.6% a year ago, and first half gross margin was 35.1% versus 40.9% a year ago.

• EBITDA for the quarter was negative $0.96 million, and for the first half negative $2.2 million.

• Interest expenses for the quarter surged to $0.54 million from $0.02 million a year ago, reflecting higher borrowings and rates.

• Cash balance increased to $2.5 million as of September 30, 2025, from $0.8 million at March 31, 2025.

• For the six months ended September 30, 2025, net revenues fell 37.2% year-over-year to $9.2 million, and net loss widened to $3.8 million from $1.3 million.

Outlook and guidance

• Management plans to address going concern risks through further equity and debt financing and related party support, but there is no assurance of success.

• The company expects further decreases in payroll and operating expenses as more retail stores are sold.

• Expansion of rental services and new product launches are planned, but market and regulatory headwinds persist.

• Focus remains on enhancing profitability, strengthening product/service portfolio, and improving operational efficiency for long-term growth.