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Flux Power Holdings, Inc. (FLUX)·Q1 2026 Earnings Summary

Executive Summary

  • Q1 FY26 revenue declined sequentially and year-over-year amid a temporary pause in customer orders tied to tariff uncertainty and near-term macro caution; revenue of $13.2M and gross margin of 28.6% were both down vs Q4 FY25 and Q1 FY25 .
  • The quarter missed Wall Street consensus on both revenue ($13.18M vs $14.11M) and EPS (-$0.14 vs -$0.12); EBITDA was materially below consensus as mix shifted to lower-capacity products; management pointed to tariffs, mix and government shutdown impacts * .
  • Subsequent order momentum rebounded early in Q2 FY26 with ~$2.4M in repeat orders and a large new airline customer, expanding Flux’s North American airline coverage to eight; UL certifications (UL EE across material handling; UL 1973 for 80V GSE) broaden addressable markets and support adoption .
  • Liquidity strengthened post-quarter via ~$9.2M net proceeds from an equity offering and $4.6M net proceeds from a pre-funded warrant placement; borrowing capacity remains available under a $16M facility, reinforcing working capital and product roadmap acceleration .
  • Near-term stock catalysts: certification-driven TAM expansion, order recovery signals, and cost actions; risks include persistent tariff headwinds and mix pressure on margins .

What Went Well and What Went Wrong

What Went Well

  • UL EE Listing across the entire material handling portfolio and UL 1973 Listing for the 80V GSE solution, unlocking new TAM in chemical, oil & gas, agriculture processing, pharma, and GSE/AGV/AMR opportunities .
  • Early Q2 order recovery highlighted by ~$2.4M in repeat orders and a large airline order; airline footprint doubled to eight North American carriers vs last year, supporting GSE electrification penetration .
  • Software strategy advanced: SkyEMS/SkyBMS 2.0 moved from beta to production with multiple paying customers; management targets every battery to be cloud-connected and is adding AI-driven features .
    • “It is our goal that every battery ship be cloud connected, and we are working hard towards this goal.” — CEO Krishna Vanka .

What Went Wrong

  • Revenue and margins compressed on order pauses tied to tariff uncertainty and macro caution; gross margin fell to 28.6% from 32.4% YoY and from 34.5% in Q4, with mix shift to lower energy capacity products .
  • Q1 missed consensus on revenue and EPS; adjusted EBITDA deteriorated to -$1.7M vs +$0.6M in Q4, reflecting lower volumes and mix *.
  • Management cited additional near-term headwinds including the government shutdown; while seeing signs of recovery, visibility remains cautious into Q2 before strengthening expected in Q3 (calendar Q1 2026) .

Financial Results

Quarterly Trend (oldest → newest)

MetricQ3 2025Q4 2025Q1 2026
Revenue ($USD Millions)$16.742 $16.737 $13.175
Gross Profit ($USD Millions)$5.287 $5.772 $3.765
Gross Margin (%)32.0% 34.5% 28.6%
Total Operating Expenses ($USD Millions)$6.864 $6.532 $5.943
Operating Loss ($USD Millions)$(1.577) $(0.760) $(2.178)
Net Loss ($USD Millions)$(1.939) $(1.179) $(2.562)
Net Loss per Share ($USD)$(0.12) $(0.07) $(0.15)
Adjusted EBITDA ($USD Millions)$(1.123) $0.640 $(1.718)

Q1 FY26 vs Prior Year and Consensus

MetricQ1 2025 (YoY)Q1 2026 ActualQ1 2026 Consensus Estimate
Revenue ($USD Millions)$16.125 $13.175 $14.1125*
Gross Margin (%)32.4% 28.6% N/A
Net Loss per Share ($USD)$(0.10) $(0.15) $(0.12)*
Adjusted EBITDA ($USD Millions)$(0.372) $(1.718) $(0.391)*

Notes: Values retrieved from S&P Global.*

Balance Sheet and Liquidity Snapshot

MetricQ4 2025Q1 2026
Cash and Equivalents ($USD Millions)$1.334 $1.588
Accounts Receivable, net ($USD Millions)$11.374 $7.497
Inventories, net ($USD Millions)$17.231 $15.726
Line of Credit Outstanding ($USD Millions)$13.627 $9.935
Borrowing Capacity (Gibraltar) ($USD Millions)$16.0 $16.0
Equity Offering Net Proceeds (post-Q1) ($USD Millions)N/A~$9.2
Pre-funded Warrants Net Proceeds (Q1/post-Q1) ($USD Millions)~$3.8 in Q4 gross; $1.0 subordinated debt available ~$4.6

Operating KPIs and Commercial Highlights

KPIQ3 2025Q4 2025Q1 2026 / Early Q2 FY26
Backlog at Quarter-End ($USD Millions)$16.895 N/AN/A
Orders Announced ($USD Millions)N/A>$3.2 airline orders disclosed ~$2.4 repeat orders (material handling)
Airlines Served (North America)~6 purchase orders over last calendar year Additional new orders 8 airlines (doubled vs last year)
UL CertificationsPatent/AI, SkyEMS pilot SkyEMS 2.0 beta UL EE across portfolio; UL 1973 for 80V GSE

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueQ2 FY26None providedNo formal quantitative guidance; management cited order rebound in Q2 and stronger trends expected in Q3 FY26 (calendar Q1 2026) Maintained qualitative only
Gross MarginFY26 near termNone providedNo formal guidance; margin impacted by mix and tariffs in Q1 N/A
OpExFY26None providedContinued cost reductions and workforce right-sizing benefits N/A
Capital & LiquidityFY26N/A~$9.2M net equity proceeds post-Q1; ~$4.6M net pre-funded warrants; $16M credit facility availability subject to covenants Strengthened liquidity

Note: No formal numerical guidance ranges were provided; commentary was qualitative.

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q1 FY26)Trend
AI/Software (SkyEMS/SkyBMS)Q3: SkyEMS platform, AI algorithm patent; goal to cloud-connect batteries . Q4: SkyEMS 2.0 beta rollout .SkyBMS/SkyEMS 2.0 graduated to production; multiple paying customers; new AI-driven features planned; “goal that every battery ship be cloud connected” Advancing; commercialization and adoption increasing
Tariffs/Macro HeadwindsQ3: Tariff pressures and proactive sourcing shifts; domestic assembly focus . Q4: Caution into FY26 due to tariffs/macro .Q1: Order pause and margin compression due to tariff uncertainty; headwinds include government shutdown; signals of recovery into Q2 and strength in Q3 Near-term headwinds easing; improving order flow
GSE Product PerformanceQ3: Launch of higher-voltage G96-G2 for demanding GSE . Q4: Large airline orders; redesigned G80 .UL 1973 for 80V GSE product; large new airline order; footprint expanded to 8 airlines Strong progress and validation
Certifications & ComplianceQ3: Patent award; SkyEMS beta . Q4: SkyEMS 2.0 beta; capital raise .UL EE across portfolio; UL 1973 for 80V GSE; regained Nasdaq compliance Positive, broadening market access
Cost Actions & MixQ3: Margin improvement initiatives; adjusted EBITDA improved YoY . Q4: Adj. EBITDA positive; margin up .Q1: Workforce cost reduced ~20% since CEO arrival; margins pressured by lower-capacity product mix Costs lowered; mix headwind transient

Management Commentary

  • “First quarter revenue reflected a temporary pause in customer orders due to the uncertainty surrounding the tariff situation and overall near-term caution on the macroeconomic environment.” — CEO Krishna Vanka .
  • “We have begun to see order activity materially rebound in the second quarter, highlighted by multi-million-dollar orders… and a more recent large order from a major new airline customer.” — CEO .
  • “Gross margin… decreased… mainly from lower sales combined with a shift in mix to our lower energy capacity products.” — CFO Kevin Royal .
  • “We completed two capital raises totaling $13.8 million… used for working capital… to accelerate our product development roadmap.” — CEO .
  • “We received UL EE Listing across our material handling portfolio… opening up a new $1B total addressable market… and UL 1973 Listing for our 80V… GSE industry.” — CEO ; corroborated by press release .

Q&A Highlights

  • Order trends: Management sees evidence of a rebound post-quarter with ~$2.4M material handling orders and a significant airline order; expects strengthening in Q3 FY26 (calendar Q1 2026) while acknowledging ongoing tariff and government shutdown headwinds .
  • GSE adoption: Airlines continue to move to lithium; near-term tariffs caused a pause, but broader trend remains supportive; expanded airline customer base to eight .
  • Margin/operations: Mix shifted to lower-capacity products; ongoing cost reductions and workforce right-sizing; capital raised to support product redesigns aimed at lowering costs and improving gross profit .

Estimates Context

  • Q1 FY26 performance versus S&P Global consensus: Revenue $13.18M vs $14.11M estimate (miss); EPS -$0.14 vs -$0.12 estimate (miss); EBITDA -$1.93M vs -$0.39M estimate (miss). Management attributed the variance to tariff-driven order pauses and lower-capacity mix * .
  • Q2 FY26 consensus implies sequential improvement: Revenue $16.11M; EPS -$0.06; EBITDA -$0.747M; aligns with management’s commentary on order recovery and improving trends into Q3 FY26 *.
  • Coverage depth: Primary EPS estimates count = 1 for Q1 and 2 for Q2; Revenue estimates count = 2 for Q1 and 3 for Q2, indicating limited sell-side coverage for FLUX*.

Notes: Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Q1 miss was driven by external tariff uncertainty and product mix; watch Q2 order cadence and margin mix as leading indicators for sequential recovery .
  • Certifications (UL EE, UL 1973) expand TAM and de-risk adoption in regulated industrial segments; this can catalyze sales cycles and support premium pricing .
  • Software transition is real: multiple paying customers on SkyEMS/SkyBMS 2.0 and AI roadmap; recurring revenue and fleet intelligence can improve stickiness and lifetime value .
  • Liquidity improved via ~$13.8M combined net proceeds; monitor deployment into cost-down redesigns and working capital to support growth without diluting margins .
  • Near-term risks: tariff policy volatility, potential mix headwinds, and macro caution; mitigating levers include cost reductions, sourcing diversification, and solution selling .
  • Medium-term: If order momentum sustains and certifications unlock new verticals (chemical/oil & gas/pharma/AGVs/AMRs), margin trajectory could normalize back toward mid-30s as mix and volume improve .
  • Trading lens: Watch for follow-on order announcements, backlog updates, and margin commentary in mid-February; positive signals on GSE and material handling wins may act as catalysts .