Executive Summary

Q4 FY25 revenue rose 25% YoY to $16.7M with gross margin expanding 760 bps to 34.5%; adjusted EBITDA turned positive to $0.6M and non-GAAP operating income was $0.4M, reflecting cost actions and lower warranty expense .
Orders and software attach: two airline orders ($2.0M G80-420 redesign; $1.2M G80 + SkyEMS) and SkyEMS 2.0 entered beta with an airline and is being packaged with batteries; management aims to upsell telemetry into ~28,000 installed packs .
Balance sheet and liquidity: cash was $1.3M at 6/30; subsequent ~~$5M gross warrant financing (~~$3.8M net cash impact) plus $2.4M available on ABL and $1.0M on subordinated LOC; equity deficit at year-end was $(5.4)M .
Outlook/tone: management cited tariff/macro caution near term, but growing pipeline and operational initiatives support optimism later in the fiscal year; no formal guidance provided this quarter .
Estimates: Q4 revenue modestly beat S&P Global consensus; EPS was in line; prior two quarters saw revenue beats but EPS misses as restatement/OpEx weighed on profitability (see Estimates Context) . Values marked with * retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well
- Material gross margin expansion: Q4 GM 34.5% vs 26.9% YoY on higher-margin mix, cost savings, and lower warranty cost; adjusted EBITDA positive $0.6M in Q4 .
- Solution selling traction: $1.2M airline order bundled hardware plus SkyEMS; SkyEMS 2.0 in beta with airline and rolling to additional customers; strategy is telematics on every new battery and upsell into installed base .
- Product/innovation: redesigned G80-420 (margin-focused) secured $2M+ order; awarded a new patent covering a breakthrough charge balancing approach, reinforcing technology differentiation .
What Went Wrong
- Operating expenses elevated: Q4 OpEx $6.5M (vs $5.4M YoY) and FY25 included ~$2.9M restatement costs; GAAP net loss persisted in Q4 at $(1.2)M .
- Backlog/near-term demand: backlog exited Q4 at ~$9M (down from $16.9M at 3/31), and management noted a pause in early Q1 FY26 amid tariff/macro uncertainty .
- Capital structure: cash $1.3M at year-end and a stockholders’ equity deficit of $(5.4)M necessitated additional financing post quarter (prefunded and common warrants) .

Financial Results

Metric	Q4 2024	Q2 2025	Q3 2025	Q4 2025
Revenue ($M)	$13.38	$16.83	$16.74	$16.74
Gross Profit ($M)	$3.59	$5.46	$5.29	$5.77
Gross Margin (%)	26.9%	33.0%	32.0%	34.5%
Total OpEx ($M)	$5.40	$6.94	$6.86	$6.53
Operating Income ($M)	$(1.81)	$(1.48)	$(1.58)	$(0.76)
Net Income ($M)	$(2.24)	$(1.89)	$(1.94)	$(1.18)
Diluted EPS ($)	$(0.13)	$(0.11)	$(0.12)	$(0.07)
Adjusted EBITDA ($M)	$(1.22)	$(0.95)	$(1.12)	$0.64

Notes: Non-GAAP operating income Q4 2025 was $0.39M vs $(1.47)M YoY (excludes restatement costs and SBC) . Non-GAAP net loss Q4 2025 was $(0.03)M (≈breakeven) vs $(1.91)M YoY .

Segment breakdown: Not disclosed in company materials; commentary highlights growth in both material handling and GSE, with higher ASPs in GSE and lower ASPs in material handling .

KPIs and Liquidity

Backlog ($M): Q3 FY25 $16.90 (3/31), Apr-30 $15.10, Q4 exit ~$9.0 .
Cash & equivalents ($M): Mar-31 $0.51 ; Jun-30 $1.33 ; post-quarter ~$3.8M net cash from ~$5M gross financing .
Cumulative packs shipped >28,000, supporting software attach/upsell runway .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue (sequential)	Q4 FY25	+5% to +10% QoQ expectation (communicated on Q2 call)	No formal guidance; management flagged near-term caution from tariffs/macro; optimistic later in fiscal year	Not reiterated; moved to qualitative tone
Adjusted EBITDA	Q4 FY25	Expected positive (Q2 call)	Delivered +$0.64M	Achieved
Gross Margin	FY26 trajectory	Management discussed continued cost actions and lower warranty; no numeric target reaffirmed	No numeric guidance; reiterated efficiency initiatives	Maintained qualitative stance

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q4 FY25)	Trend
AI/Software (SkyEMS)	Telemetry/AI features; pilots incl. Fortune 50; aim for recurring revenue; solution packaging in progress	SkyEMS 2.0 beta with airline; packaging with every battery; upsell to installed base; rollout to more customers	Strengthening; execution moving from pilot to commercialization
Supply chain/tariffs	Price increases mid-single digits; cost reductions; tariff uncertainty impacted capital spending	Tariffs/macro creating near-term caution; CEO worked with China/domestic vendors to offset tariffs; engineering cost simplification	Persistent headwind; mitigation actions ongoing
Product performance/orders	G96 high-voltage launch; large airline wins; heavy-duty models planned	$2.0M redesigned G80-420 order; $1.2M G80+SkyEMS order; >28k packs shipped	Healthy demand; software attach increases
Go-to-market	Shift to solution selling; expand OEM/private label; underfunded marketing being addressed	Three-pronged motion: telemetry on every battery, upsell to installed base, advanced analytics add-ons	Professionalizing sales; pipeline up
Backlog/pipeline	Q2: $17.5M (Dec); $19.5M (Feb)	Q4 exit backlog ~$9M; quoting activity increasing into Q2 FY26 (calendar Q4)	Near-term dip with improving quote flow

Management Commentary

“We finished 2025 with solid year-over-year growth… My top strategic initiative is to achieve profitable growth through operational efficiencies… a reinvigorated sales approach… and more diverse revenue streams.” – CEO Krishna Vanka .
“As we look ahead… the current tariff and macroeconomic environment create uncertainty and near-term caution… recent capital and expected benefits from our strategic initiatives give us reason to be increasingly optimistic for the latter part of our fiscal year.” – CEO .
“Gross margin in the fourth quarter was 34.5%… driven by sales of higher margin products, the benefit of cost-savings initiatives, and lower warranty-related expense.” – CFO Kevin Royal .
“Our strategy is to package and sell the SkyEMS software along with the battery… and go back to the installed base… which gives us a very good upsell opportunity.” – CEO & CRO .

Q&A Highlights

Gross margin drivers and path: ~60% of Q4 GM improvement from input cost reductions, remainder from lower warranty; management has discussed visibility to higher margins, underpinned by ongoing quality/cost actions .
SkyEMS 2.0 commercialization: Packaged with batteries, beta removing within 1–2 months; three motions—telemetry on every battery, upsell to installed base, and advanced analytics add-ons/integrations .
Demand/backlog: Backlog ~$9M at quarter-end; observed early Q1 slowdown but quoting is rising, especially as customers digest tariff impacts (material handling) .
Airline orders: $2M redesigned G80-420 to existing airline; $1.2M G80 + SkyEMS package to another; lithium adoption in GSE still early, supporting additional runway .

Estimates Context

Metric	Q2 2025 Estimate*	Q2 2025 Actual	Q3 2025 Estimate*	Q3 2025 Actual	Q4 2025 Estimate*	Q4 2025 Actual
Revenue ($M)	14.86*	16.83	16.50*	16.74	16.47*	16.74
Primary EPS ($)	(0.075)*	(0.11)	(0.064)*	(0.12)	(0.07)*	(0.07)

Q4 FY25: modest revenue beat; EPS in line. Q2–Q3: recurring revenue beats but EPS misses driven by elevated OpEx/restatement costs and product mix .
Implications: With GM at 34.5% and adjusted EBITDA positive, margin expectations could drift higher; however, the lower quarter-end backlog and management’s near-term caution may temper revenue estimates for early FY26 until quoting translates to orders. Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

Margin inflection: 34.5% GM and positive adjusted EBITDA demonstrate operating leverage from cost actions and quality improvements; watch for durability of GM >33% as software attach grows .
Software attach as catalyst: SkyEMS 2.0 packaging and installed-base upsell can drive incremental margin/recurring revenue and deepen customer lock-in across ~28k deployed packs .
Demand signals mixed near term: Backlog stepped down to ~$9M and management flagged tariff/macro caution; rising quoting suggests potential rebound later in FY26—order conversion is the key near-term KPI .
Capital and liquidity: Post-quarter financing plus ABL/LOC capacity extend runway, but equity deficit underscores the need for sustained profitability and cash generation .
Product momentum: Redesigned G80-420 margin-focused design and high-voltage G96 broaden TAM in GSE; continued OEM/private label and certifications should reduce adoption friction .
Risk-reward setup: Upside from software/services mix and margin expansion; risks from macro/tariffs, backlog variability, and working capital needs.
Near-term trading lens: Expect sensitivity to backlog updates, sequential margin trajectory, and any quantified software revenue disclosures; confirmations of pipeline conversion could be a stock catalyst.

References:

Q4 FY25 8-K/Press release and financial tables .
Q4 FY25 earnings call transcript .
Q3 FY25 press release (context) .
Q1–Q2 FY25 8-K/Press release and Q2 call (context) .

S&P Global disclaimer: All figures marked with * are consensus estimates retrieved from S&P Global.

Flux Power Holdings, Inc. (FLUX)·Q4 2025 Earnings Summary