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Polar Power, Inc. (POLA)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue declined sharply to $2.71M, down 42% year over year, with gross margin contracting to 34.3% and GAAP EPS at $(0.11); management cited telecom demand softness and inventory overhang at a key U.S. customer as primary drivers .
  • Mix shifted toward parts and services: accessories revenue rose to $0.58M vs. $0.15M in Q2 2024; management highlighted “roughly 288%” aftermarket growth and progress on domestic reseller strategy to rebuild sales to pre-pandemic levels .
  • International sales fell to 3% of Q2 revenue vs. 25% a year ago, increasing exposure to U.S. telecom; backlog at quarter-end stood at $1.20M, 95% telecom .
  • Liquidity tightened: cash fell to $0.18M, line of credit balance increased to $5.30M; management disclosed going-concern risk and plans to diversify revenue and improve operating efficiency .
  • No formal guidance; potential catalysts include Q4 launch of 30 kW mobile EV charger and ongoing channel buildout (resellers, Middle East/Africa trials) .

What Went Well and What Went Wrong

What Went Well

  • Accessories and services gained traction: “we experienced increased sales in aftermarket parts and services of roughly 288%…compared to the same period in 2024,” supporting higher-margin mix .
  • Cost discipline: operating expenses fell 24% YoY to $1.04M in Q2; G&A decreased $203K YoY, reflecting lower staffing .
  • Strategic initiatives: domestic reseller distribution, expanded overseas staff/resellers, and field trials in SE Asia/Africa; EV mobile charger targeted for Q4 release .

What Went Wrong

  • Telecom demand softness and customer inventory overhang drove a 42% revenue decline and flipped profitability from $0.20 to $(0.11) EPS YoY; gross margin compressed to 34.3% (vs. 39.3% a year ago) on overhead absorption .
  • International mix deteriorated to 3% of sales from 25%, increasing concentration risk; largest U.S. telecom customer comprised 69% of Q2 sales .
  • Liquidity pressures: cash declined to $0.18M, credit facility usage rose to $5.30M; management disclosed substantial doubt about going concern absent financing or improved operations .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Millions)$4.660 $1.723 $2.708
GAAP Diluted EPS ($)$0.20 $(0.50) $(0.11)
Gross Profit ($USD Millions)$1.832 $0.320 $0.930
Gross Margin %39.3% 18.6% 34.3%
Operating Expenses ($USD Millions)$1.372 $1.421 $1.040
Operating Income ($USD Millions)$0.460 $(1.101) $(0.110)
Net Income (Loss) ($USD Millions)$0.501 $(1.265) $(0.271)
Segment Breakdown (Product)Q2 2024 ($K)Q2 2025 ($K)
DC Power Systems$4,475 $1,989
Engineering & Tech Support$38 $135
Accessories$147 $584
Total$4,660 $2,708
Segment Breakdown (Customer Type)Q2 2024 ($K)Q2 2025 ($K)
Telecom$4,445 $2,481
Government/Military$163 $154
Marine$13 $38
Other$39 $35
Total$4,660 $2,708
GeographyQ2 2024 ($K)Q2 2025 ($K)
United States$3,490 $2,624
Canada$— $32
South Pacific Islands$1,146 $49
Indonesia$24 $3
Total$4,660 $2,708
KPIsQ2 2024Q2 2025
Backlog ($USD Millions)N/A$1.203
Telecom % of Sales95% 92%
International % of Sales25% 3%
Accessories Revenue ($USD Millions)$0.147 $0.584
Largest Customer Mix (% of Q2 Sales)Top 3 at 40%, 27%, 22% Largest at 69%
Estimates vs. Actual (Wall Street Consensus)Q2 2025 ConsensusQ2 2025 Actual
Revenue ($USD Millions)Unavailable*$2.708
Primary EPS ($)Unavailable*$(0.11)

*Values retrieved from S&P Global. Consensus metrics for POLA were unavailable for Q2 2025 via S&P Global’s database.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY/Q3-Q4 2025None providedNone providedMaintained – no formal guidance
Gross MarginFY/Q3-Q4 2025None providedNone providedMaintained – no formal guidance
OpExFY/Q3-Q4 2025None providedContinued cost discipline noted; no numeric targetsInformational only
Product LaunchQ4 2025N/A30 kW mobile EV charger planned for Q4New qualitative item

Earnings Call Themes & Trends

No Q2 2025 earnings call transcript was available in the document set; themes drawn from 10-Q MD&A and press releases.

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
Channel strategy (resellers)Broadening product penetration; reducing telecom concentration Shift to domestic resellers as “fastest direction” to rebuild sales Expanding
International expansionUNHCR Nigeria microgrid; higher Q1 international mix (18%) International sales down to 3%; adding staff/resellers; trials restarted in Sudan/SE Asia/Africa Mixed; near-term weaker
Telecom customer inventoryLower bookings in 2024; improving into late Q1 Largest U.S. telecom still over-inventoried; 69% customer concentration Persistent headwind
Aftermarket parts & servicesQ1: 28% of sales; remote monitoring initiative on 5,000 legacy units Aftermarket parts/services up ~288% YoY Positive momentum
Tariffs/macro2024 commentary on inflation/tariffs Anticipated tariff impacts; monitoring supplier exposure Ongoing risk
New products (EV mobile charger)Tested in 2024; planned launch in 2025 “Plan to release…during the fourth quarter” Execution pending

Management Commentary

  • “Sales…aftermarket parts and services [were] roughly 288% [higher]…We believe that restructuring our US sales to include distribution through domestic resellers will be the fastest direction in rebuilding sales to pre-pandemic levels.” — Arthur Sams, CEO .
  • “We have been restructuring our sales staff in the Middle East and Africa…increased the number of field trials…One field trial in Sudan…was restarted last week with favorable results.” .
  • “We plan to release our 30 kW mobile EV charger during the fourth quarter.” .
  • “Our ability to continue as a going concern is dependent upon…additional financing, grow and diversify our revenue, improve operational efficiency…” .

Q&A Highlights

No Q2 2025 earnings call transcript found; no Q&A available in the current document set [List: earnings-call-transcript returned only 2017–2019 items].

Estimates Context

  • S&P Global consensus estimates for Q2 2025 revenue and EPS were unavailable for POLA; therefore estimate comparisons are not possible for this quarter.*
  • Given the magnitude of the YoY revenue decline and negative EPS, Street models (where they exist) likely require lower H2 demand assumptions in U.S. telecom and a more gradual channel build-out.

*Values retrieved from S&P Global.

Key Takeaways for Investors

  • Revenue pressure and margin compression are tied to telecom demand and a single large U.S. customer; concentration risk remains elevated at 69% of Q2 sales — monitor backlog conversion and diversification pace .
  • Accessories/services strength is a bright spot; sustained parts/service mix could help margins while product sales normalize — track reseller rollout and remote monitoring-driven service attach .
  • Liquidity risk is non-trivial: minimal cash ($0.18M) and higher revolver balance ($5.30M); management flagged going-concern risk absent financing or operational improvement — watch LOC availability, cash burn, and potential capital actions .
  • Near-term catalysts: Q4 launch of the 30 kW mobile EV charger and ZQuip collaboration may broaden end-markets beyond telecom; execution will be key to offset telecom softness .
  • International rebuild is strategic but currently a drag; resumed field trials (Sudan, SE Asia/Africa) and reseller network should be monitored for timing of order flow .
  • Without formal guidance and lacking consensus coverage, position sizing should reflect execution and financing risk; a turn likely requires evidence of reseller-driven orders, international wins, and reduced customer inventory drag .
  • For trading: headlines around EV charger launch, reseller agreements, large order announcements, or financing updates could drive outsized moves given the stock’s microcap profile and concentration risks .