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Fly-E Group, Inc. (FLYE)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 FY2025 revenue declined to $5.68M, down 23.6% year over year, while gross margin expanded to 45.1% from 39.0%, reflecting mix and cost improvements .
  • Net loss was $0.68M (EPS -$0.03), versus net income of $20,889 (EPS $0.001) in Q3 FY2024; operating expenses rose to $3.50M from $2.78M YoY .
  • No formal financial guidance was provided; management highlighted participation in NYC DOT’s $2M trade‑in program (Fly‑11 PRO selected), and ongoing product and digital investments .
  • Safety/headline risk persists: multiple law‑firm press releases and class action reminders surfaced in Oct–Nov 2025 related to lithium‑battery accidents and revenue declines, creating a legal overhang and potential stock reaction catalyst .

What Went Well and What Went Wrong

What Went Well

  • Gross margin expanded to 45.1% (+610 bps YoY) on pricing/mix and operational efficiencies; nine‑month gross margin improved to 42.0% from 39.3% .
  • Rental services initiated and contributed revenue in Q3 ($48,961), while management continues to invest in mobile apps (Fly E‑Bike and Go Fly) to enhance user experience .
  • Strategic engagement with NYC DOT’s Trade‑In Program; “Our Fly‑11 PRO was selected as the official model for this $2 million initiative,” positioning the brand around safety standards (management quote) .

What Went Wrong

  • Retail sales revenue declined 21.9% YoY to $4.9M, driven by lithium‑battery accident headlines in New York and customers favoring oil‑powered vehicles over EVs .
  • Wholesale revenue fell to $0.7M vs $1.1M YoY, impacted by closures of top customers’ stores in Dec 2023, pressuring volumes and revenue elasticity .
  • Operating expenses rose 26% YoY to $3.50M on payroll, rent, advertising, professional fees and insurance (including D&O), compressing operating profitability despite margin gains .

Financial Results

Consolidated P&L and Key Metrics (Oldest → Newest)

MetricQ1 FY2025 (Jun 30, 2024)Q2 FY2025 (Sep 30, 2024)Q3 FY2025 (Dec 31, 2024)
Revenues ($USD)$7,873,426 $6,824,406 $5,678,010
Gross Profit ($USD)$3,099,634 $2,904,454 $2,561,070
Gross Margin (%)39.4% 42.6% 45.1%
Total Operating Expenses ($USD)$3,145,133 $4,135,513 $3,501,349
EBITDA ($USD)$57,021 $(1,191,234) $(804,993)
EBITDA Margin (%)0.7% (17.5%) (14.2%)
Net Income (Loss) ($USD)$(179,508) $(1,142,848) $(684,487)
Diluted EPS ($USD)$(0.01) $(0.05) $(0.03)

Year-over-Year Comparison (Q3 FY2025 vs Q3 FY2024)

MetricQ3 FY2024Q3 FY2025
Revenues ($USD)$7,428,212 $5,678,010
Gross Profit ($USD)$2,972,813 $2,561,070
Gross Margin (%)39.0% 45.1%
Total Operating Expenses ($USD)$2,778,824 $3,501,349
EBITDA ($USD)$153,394 $(804,993)
Net Income (Loss) ($USD)$20,889 $(684,487)
Diluted EPS ($USD)$0.001 $(0.03)

Segment Breakdown – Q3 FY2025

SegmentRevenue ($USD)
Retail$4,900,000
Wholesale$700,000
Rental Services$48,961

KPIs

KPIQ1 FY2025Q2 FY2025Q3 FY2025Prior-Year Q3
Units Sold (EVs)10,300 15,056 9,989 13,500

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY2025/Q3Not provided Not provided Maintained (no guidance)
Gross MarginFY2025/Q3Not provided Not provided Maintained (no guidance)
OpExFY2025/Q3Not provided Not provided Maintained (no guidance)
Other (OI&E, tax rate, dividends)FY2025/Q3Not provided Not provided Maintained (no guidance)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3 FY2025)Trend
Battery safety incidents impact demandQ2: Retail demand affected by lithium-battery accident headlines in NY Continued pressure on retail volumes; customers opt for oil‑powered vehicles Persistent headwind
NYC DOT Trade‑In ProgramNot mentioned Q1/Q2 Fly‑11 PRO selected as official model; active cooperation to promote program Positive regulatory alignment
Rental services rolloutQ1: Launched rental program and GO FLY app development Rental revenue recognized ($48,961); supports margin mix Early traction
Wholesale channelQ1/Q2: Wholesale down; customer store closures reduced orders Wholesale revenue $0.7M; continued weakness from prior closures Ongoing pressure
Operating expenses and professional feesQ1/Q2: Higher payroll, rent, professional, insurance costs (IPO/D&O) OpEx up to $3.5M; higher audit/legal/IR, insurance, development fees Elevated cost base
Geographic expansionQ1/Q2: Miami, Los Angeles, Toronto expansion plans Not emphasized in Q3 releaseNeutral emphasis

Management Commentary

  • “We achieved a gross margin of 45.1% in the third quarter of fiscal year 2025, an uptick from 39.0% in the same period last year.”
  • “Our Fly‑11 PRO was selected as the official model for this $2 million [NYC DOT trade‑in] initiative, reinforcing our commitment to safety and high‑quality standards.”
  • “We plan to expand our product portfolio and integrate advanced technologies… [and] strengthen our brand influence through international trade shows, strategic partnerships, and increased digital marketing investments.”

Q&A Highlights

  • No earnings call transcript was available for Q3 FY2025; therefore, no Q&A themes or clarifications can be cited [ListDocuments earnings-call-transcript: none].

Estimates Context

  • Wall Street consensus estimates via S&P Global (EPS, revenue, EBITDA) for Q3 FY2025 were unavailable at the time of this analysis due to data access limits; as a result, explicit beat/miss vs consensus cannot be determined. Estimates comparisons should be deferred until access is restored.

Key Takeaways for Investors

  • Margin resilience amid demand headwinds: Gross margin expanded to 45.1% despite a 23.6% revenue decline, suggesting mix and cost actions are effective .
  • Retail demand remains fragile in New York due to safety headlines; volumes and retail revenue contracted materially YoY and QoQ, weighing on scale .
  • Early rental revenue and high margin profile can support blended margin, but the contribution is small to date ($48,961) and not yet offsetting retail pressure .
  • Operating expenses elevated post‑IPO (audit/legal/IR, D&O insurance); operating leverage will require either a retail demand recovery or deeper cost actions .
  • Wholesale channel is structurally weaker after key customer store closures; recovery likely depends on dealer network expansion and channel replacement .
  • Regulatory positioning via NYC DOT’s trade‑in program is a strategic differentiator on safety that may aid brand perception and demand over time .
  • Near term: Expect narrative to focus on safety remediation, retail conversion, and cost discipline; mid‑term thesis hinges on demand stabilization, rental scale‑up, and leveraging programs/partnerships to rebuild volume .