Flux Power Holdings, Inc. (FLUX) Q1 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reveals a decline in revenue and gross margins, coupled with increased net loss and adjusted EBITDA losses, indicating financial strain. While there are positive signals like new orders and market expansion, concerns about tariffs, macroeconomic conditions, and product mix challenges overshadow these. The Q&A highlights ongoing headwinds, with some optimism for future quarters. Despite raised capital for development, the overall sentiment is negative due to current financial performance and uncertainties, likely leading to a stock price decline.
Key Financial Performance
Revenue $13.2 million, a decrease from $16.1 million in the same quarter last year (-18%). The decrease was driven mainly due to a pause in customer orders as a result of tariff uncertainty and macroeconomic concerns.
Gross Margin 28.6%, a decrease from 32.4% in the prior year period (-3.8 percentage points). The decrease resulted mainly from lower sales combined with a shift in mix to lower energy capacity products, which have lower gross margins.
Operating Expenses $5.9 million, a decrease from $6.4 million in the first quarter of 2025 (-7.8%). The decrease reflects the benefits of cost reduction initiatives, including rightsizing the workforce to match current operating levels.
Net Loss $2.6 million or $0.15 per share, compared to $1.7 million or $0.10 per share in the first quarter of 2025 (a larger loss of $0.9 million). The increase in net loss was due to lower revenue and margins.
Non-GAAP Net Loss $2.4 million or $0.14 per share, compared to $1.1 million or $0.06 per share in the prior year period (a larger loss of $1.3 million).
Adjusted EBITDA Negative $1.7 million, compared to negative $0.4 million in the same quarter a year ago (a larger loss of $1.3 million). This reflects the lower revenue and margins in the quarter.
Cash and Cash Equivalents $1.6 million, an increase from $0.6 million a year ago and $1.3 million in the prior quarter. The increase was supported by capital raises subsequent to the quarter end.
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Operating Highlights
UL EE listing for material handling portfolio: Achieved UL EE listing across the entire material handling portfolio, opening new market segments worth $1 billion in total addressable market, including chemical, agriculture processing, oil and gas, and pharma industries.
UL 1973 listing for 80-volt intelligent batteries: Received global certification for mobile battery energy storage systems (BESS) in the GSE industry, unlocking opportunities in AGVs and AMRs.
SkyEMS 2.0 SaaS platform: Graduated SkyEMS 2.0 SaaS platform from beta testing to multiple paying customers, with plans to add AI-driven operational features.
Expansion in airline customer base: Secured a large order with a major airline, doubling the airline customer base to 8 major North American airlines compared to last year.
New market segments: Entry into new market segments worth $1 billion in total addressable market, including chemical, agriculture processing, oil and gas, and pharma industries.
Workforce reduction: Reduced headcount costs by 20% while maintaining consistent production levels.
Cost reduction initiatives: Lowered operating expenses from $6.4 million to $5.9 million year-over-year.
Capital raises: Completed two capital raises totaling $13.8 million, aimed at working capital and accelerating product development.
NASDAQ compliance: Regained compliance with NASDAQ listing requirements.
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Risk or Challenges
Revenue Impact: Temporary pause in customer orders due to tariff uncertainty and macroeconomic concerns, leading to a revenue decline from $16.1 million to $13.2 million year-over-year.
Gross Margin Pressure: Gross margin decreased from 32.4% to 28.6% due to lower sales and a shift to lower energy capacity products with lower margins.
Macroeconomic Concerns: Near-term caution regarding macroeconomic conditions caused customers to delay orders, impacting revenue and operational planning.
Tariff Uncertainty: Uncertainty surrounding tariffs affected pricing and led to a temporary halt in customer orders, impacting revenue and gross margins.
Workforce Reduction: Limited workforce reductions were implemented to achieve operational efficiencies, which could impact employee morale and productivity.
Net Loss Increase: Net loss increased from $1.7 million to $2.6 million year-over-year, reflecting lower revenue and gross margins.
Adjusted EBITDA Decline: Adjusted EBITDA worsened from negative $0.4 million to negative $1.7 million year-over-year, indicating financial strain.
Product Mix Challenges: Shift to lower energy capacity products with lower gross margins negatively impacted overall profitability.
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Guidance & Outlook
Profitable growth: The company aims to achieve profitable growth in the coming quarters by streamlining cost structures, accelerating product roadmaps, and leveraging new certifications and partnerships.
Operational efficiencies: Implemented workforce reductions, reducing headcount costs by 20% while maintaining production levels.
Solution selling: Focus on building the right products and integrating value-added software to generate recurring revenue streams.
Product development: Accelerating product development roadmap with funds raised, aiming to create more opportunities and improve margins.
Software integration: Expanding software offerings like SkyEMS 2.0 SaaS platform, converting beta testers to paying customers, and adding AI-driven operational features.
Revenue expectations: Order activity is rebounding in the second fiscal quarter, highlighted by multimillion-dollar orders from top material handling customers and a large order from a major airline.
Market trends: New certifications (UL EE and UL 1973) unlock opportunities in new market segments such as chemical, agriculture processing, oil and gas, and pharma industries, representing a $1 billion total addressable market.
Recurring revenue: Goal to have every battery shipped be cloud-connected, with multiple paying customers already on the SkyEMS 2.0 platform.
Capital expenditures: Raised $13.8 million in capital to be used for working capital needs and accelerating product development.
Gross margin improvement: Redesigning product portfolio to lower costs and improve gross profits.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:How are the order trends coming through post-quarter, and is the strength continuing into the fourth quarter?
A:Kevin Royal mentioned evidence of a rebound with $2.4 million in orders from the material handling industry and a significant airline order. However, headwinds persist due to recent tariffs and the government shutdown. Promising trends are expected in the second half of the year, particularly in the third fiscal quarter of 2026.
Q:How is the ground support equipment (GSE) market looking from an investment standpoint, and what further penetration can be achieved?
A:Krishna Vanka stated that the GSE market continues to adopt clean energy solutions, with no pushback from airlines on transitioning to lithium. Short-term tariffs caused a pause, but activity is expected to increase early next calendar year. The company has doubled the number of airlines served, with some just starting to deploy lithium solutions.
Q:Review of Unclear Management Responses
A:No questions were avoided or lacked clarity in the responses provided by management.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AGVs AMRs
Flux Power
Managing Director
Power CEO
Power Conference
Shelton Group
SkyEMS
UL
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cash
customer order
decrease
detail
efficiency
goal
industry
listing
loss share
market segment
measure
need
net fee
pause customer
period
platform
portfolio
proceeds net
reduction
reminder
share loss
situation
uncertainty tariff
underwriter discount
warrant
workforce
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Flux Power Holdings, Inc. (FLUX) Q1 2026 Earnings Call Transcript
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The earnings call reveals a decline in revenue and gross margins, coupled with increased net loss and adjusted EBITDA losses, indicating financial strain. While there are positive signals like new orders and market expansion, concerns about tariffs, macroeconomic conditions, and product mix challenges overshadow these. The Q&A highlights ongoing headwinds, with some optimism for future quarters. Despite raised capital for development, the overall sentiment is negative due to current financial performance and uncertainties, likely leading to a stock price decline.
FLUX Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
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Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
