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Dragonfly Energy Holdings Corp. (DFLI)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 delivered a clean beat vs both company guidance and Street on the top line and Adjusted EBITDA: Net Sales $16.25M vs guidance $14.8M and Adj. EBITDA $(2.24)M vs guidance $(3.5)M, driven by 51% OEM growth and 430 bps gross margin expansion to 28.3% . Revenue also topped S&P Global consensus of $14.68M by ~10.6% and Adj. EBITDA topped consensus of $(3.54)M by ~$1.3M (Street data*) .
  • Mix shift to OEM accelerated with OEM Net Sales $10.05M (+50.6% YoY) offsetting DTC softness ($5.95M, –9.0% YoY). GAAP Net Loss improved to $(7.03)M (EPS $(0.58)) from $(13.63)M (EPS $(2.02)) a year ago as OpEx fell to $7.89M from $9.92M .
  • Management guided Q3 Net Sales to ~ $15.9M and Adj. EBITDA ~$(2.7)M, noting seasonal Q3 softness; target for positive Adjusted EBITDA in Q4 2025 remains in place, contingent on OEM momentum and trucking pilots scaling .
  • Stock reaction catalysts: above-guidance print/estimate beat, continued OEM momentum (including Airstream integration), and capital structure simplification (preferred exchange, common offering) that bolsters flexibility amidst tariff volatility .

What Went Well and What Went Wrong

What Went Well

  • OEM channel inflected sharply: “OEM net sales were $10.1 million… up 50.6%” with systems increasingly integrated “at the factory level,” underpinning total Net Sales growth of 23% YoY to $16.2M .
  • Margin execution: Gross margin expanded 430 bps to 28.3% “led by lower inventory costs, and improved fixed cost absorption due to higher volumes” .
  • Capital structure moves: “Preferred Stock Exchange and Public Offering Strengthen Financial Position” with management emphasizing “simplified… capital structure” and “enhanced financial flexibility” for growth initiatives .

Management quotes:

  • “We are pleased to report another strong quarter… driven by sustained demand from OEM customers” .
  • “By reallocating in-house personnel, we successfully accelerated the design and manufacturing of fully integrated energy storage systems… One RV partner has adopted these systems as standard across select 2026 models” .
  • “We exchanged the remaining preferred shares… and… completed a public offering… raising $5.5 million” .

What Went Wrong

  • DTC remains soft: DTC Net Sales $5.95M (–9.0% YoY) as consumers remain cautious in a tougher macro .
  • Interest burden still high: Q2 interest expense $5.44M, weighing on GAAP profitability despite operating progress .
  • Cash remains tight: Cash and equivalents ended Q2 at $2.73M; leverage higher with notes payable non-current rising to $38.65M, underscoring reliance on continued OEM growth and prudent financing .

Financial Results

Income Statement and Profitability (Quarterly)

MetricQ2 2024Q1 2025Q2 2025
Net Sales ($USD Millions)$13.21 $13.36 $16.25
Gross Profit ($USD Millions)$3.17 $3.93 $4.61
Gross Margin (%)24.0% 29.4% 28.3%
Operating Expenses ($USD Millions)$9.92 $9.84 $7.89
Net Loss ($USD Millions)$(13.63) $(6.80) $(7.03)
Diluted EPS ($)$(2.02) $(0.93) $(0.58)
Adjusted EBITDA ($USD Millions)$(6.20) $(3.65) $(2.24)

Notes: Q2 2025 gross margin expanded YoY by 430 bps; OpEx declined YoY; Adjusted EBITDA improved materially YoY and sequentially .

Segment Net Sales ($USD Millions)

SegmentQ4 2024Q1 2025Q2 2025
OEM$6.24 $8.09 $10.05
DTC$5.73 $5.02 $5.95
Licensing$0.25 $0.25 $0.25
Total Net Sales$12.21 $13.36 $16.25

KPIs and Balance Sheet (Quarterly)

KPIQ4 2024Q1 2025Q2 2025
Cash & Equivalents ($USD Millions)$4.85 $2.80 $2.73
Inventory ($USD Millions)$21.72 $21.73 $21.05
Weighted Avg Shares (Basic & Diluted)7.09M 7.33M 12.19M
Interest Expense ($USD Millions)$6.25 $4.70 $5.44

Versus S&P Global Consensus (Q2 2025)

MetricEstimateActualSurprise ($)Surprise (%)
Revenue ($USD Millions)$14.68*$16.25 $1.57*10.6%*
EPS (Primary) ($)$(0.95)*$(0.58) $0.37*n/a*
Adjusted EBITDA ($USD Millions)$(3.54)*$(2.24) $1.30*n/a*

Values marked with * are retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net SalesQ2 2025~$14.8M (from Q1 guide) Actual: $16.25M Above guidance
Adjusted EBITDAQ2 2025~$(3.5)M Actual: $(2.24)M Better than guidance
Net SalesQ3 2025n/a~$15.9M New guide issued
Adjusted EBITDAQ3 2025n/a~$(2.7)M New guide issued
Adjusted EBITDAQ4 2025Target positive Target reiterated (context from Q2 call: dependent on pilot ramps) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
OEM momentumQ4: OEM +61% YoY; OEM-led return to growth . Q1: OEM +10.8% YoY .OEM +50.6% YoY; factory-level integration expanding .Accelerating OEM mix/penetration
DTC softnessQ4: DTC –13% YoY . Q1: DTC –3.6% YoY .DTC –9.0% YoY; macro caution persists .Continued pressure
Tariffs/macroQ1: mitigation via supplier terms, pricing, onshoring .Managing via pricing, sourcing optimization, bonded warehousing; onshoring components where feasible .Volatile but manageable
Heavy-duty truckingQ4: expanding into trucking/industrial . Q1: DualFlow launched; ROI focus .Pilot ramps; revenue impact expected H1 next year; more pilots in H2’25 .Building toward adoption
Domestic manufacturingQ1: domestic assembly seen as strategic advantage -.Reiterated advantage, better control on quality/cost/timelines .Consistent pillar
Product/tech (Dragonfly Intelligence, solid-state)Q1: dry electrode work continues but near-term revenue prioritized .Solid-state feedstock patent issued; OEM beta testing Dragonfly Intelligence platform .IP strengthened; smart platform adoption
Capital structure/liquidityQ4: debt restructuring + capital raise .Preferred exchange; July common offering; flexibility improved .Simplified, modestly improved flexibility

Management Commentary

  • Strategic focus: “Our ongoing corporate optimization efforts continue to drive meaningful operational improvements… accelerated the design and manufacturing of fully integrated energy storage systems for several leading RV and heavy-duty trucking OEMs.”
  • OEM integration example: “Airstream… fully integrated energy storage system that will be a standard option across select 2026 models” .
  • Tariff management: “We’ve negotiated better inventory pricing… pass on some of that to customers… and can spread out payments through bonded warehousing… we are able to onshore most of the components” .
  • Capital structure: “We exchanged the remaining preferred shares… eliminated associated interest payments… completed a public offering… raising $5.5 million” .
  • Outlook tone: “We anticipate net sales of $15.9 million [Q3]… despite ongoing macroeconomic uncertainty, we believe Dragonfly remains well-positioned to deliver continued growth” .

Q&A Highlights

  • Heavy-duty trucking timing: Revenue impact from pilots more likely “first half of next year,” with pilot ramps in Q3–Q4 2025 helping near-term revenue .
  • Tariff impacts: Managed via supplier negotiations, selective price pass-through, and bonded warehousing; ongoing component onshoring where feasible .
  • Sequential trajectory and Q4 breakeven: Sequential Q4 improvement expected from RV momentum and new markets; positive Adj. EBITDA in Q4 hinges on expanded pilots and aftermarket activity .
  • Technology/IP: Recent patent covers solid-state electrolyte feedstock preparation in dry electrode process—supports safety, stability, and scalability .

Estimates Context

  • Q2 2025 actuals vs S&P Global consensus: Revenue $16.25M beat $14.68M by ~$1.57M; EPS $(0.58) vs $(0.95) consensus; Adjusted EBITDA $(2.24)M vs $(3.54)M consensus—beats driven by OEM mix and margin execution (Street data*; company actuals above).
  • Q3 2025 outlook vs Street: Guidance ~$15.9M aligns closely with S&P Global consensus ~$15.97M (two estimates), and Adj. EBITDA guide $(2.7)M is modestly more conservative than consensus $(2.71)M (Street data*) .

Values marked with * are retrieved from S&P Global.

Key Takeaways for Investors

  • OEM-led growth is firmly in control; 50%+ OEM growth and factory-level integrations (e.g., Airstream) are driving revenue scale and margin leverage .
  • Margin execution and cost discipline continue to improve profitability trajectory (430 bps GM expansion YoY; Adj. EBITDA loss cut materially YoY/seq) .
  • DTC remains a headwind; sustaining top-line momentum relies on OEM expansion and systems integration wins .
  • Heavy-duty trucking is a 2026 revenue driver; pilots ramping now, with broader P&L impact expected in H1 2026—watch pilot conversions and fleet ordering cycles .
  • Capital structure simplification (preferred exchange) and July equity raise provide needed flexibility, but cash remains tight and interest burden elevated—execution and disciplined working capital remain critical .
  • Near-term setup: Q3 seasonally softer but guided to ~25% YoY growth; Q4 positive Adj. EBITDA target intact but dependent on pilot scale and OEM cadence .
  • Stock catalysts: continued OEM awards/design-ins (Airstream and others), proof points in trucking pilots (ROI data, initial orders), and sustained margin expansion could drive estimate revisions and narrative improvement .

Appendix: Q2 2025 Preliminary Release (Context)

  • On July 29, management pre-announced Q2 Net Sales $16.2M and Adj. EBITDA $(2.2)M, above prior guidance ($14.8M and $(3.5)M), and highlighted the preferred-to-common exchange and patent issuance .