Dragonfly Energy Holdings Corp. Q4 FY2024 earnings call

Key Developments

• Successfully negotiated debt restructuring with lenders, enhancing financial flexibility, reclassifying debt as long-term, and extending maturity to October 2027. Raised additional capital via preferred stock offering.
• Launched corporate optimization program led by Province, shifting investments from R&D to near-term revenue driving actions, promoting Dr. Vick Singh to COO.

Fourth Quarter Results

• Total revenue grew 17% driven by OEM sales growth; first quarterly year-over-year revenue growth in two years. Strengthened distribution network via partnerships with Keystone Automotive, etc.
• Encouraging trends in RV market with manufacturers reintegrating premium products. Diversified into trucking industry with partnerships like Stevens Transport, showing commercial rollout potential.
• Collaboration with Stryten Energy for brand licensing and contract manufacturing, diversifying into military, automotive, etc., sectors.

Total revenue grew 17% to $12.2 million. OEM sales increased 61% to $6.2 million from $3.9 million. DTC segment generated net sales of $5.7 million, down from $6.6 million. Gross profit rose 12.5% to $2.5 million with a gross profit margin of 20.8%. Operating expenses were $6.3 million compared to $5.4 million in Q4 2023. Net loss was $9.8 million, adjusted EBITDA was negative $2.3 million.

• First quarter 2025: Expect net sales ~$13.3 million and adjusted EBITDA ~negative $3.8 million.
• Full year: Anticipate positive adjusted EBITDA by fourth quarter, led by corporate optimization program and growth in trucking/industrial markets.

• Tariff impact: Baked into projections, but had to work with suppliers and customers to mitigate effects. Macroeconomic pressures affecting DTC sales. Execution risks in commercial rollouts of trucking solutions.

Q: Clarification on EBITDA profitability target for fourth quarter A: We expect the fourth quarter to be adjusted EBITDA positive Q: Update on dry manufacturing business A: Focus on electrodes, working with customers to produce cells from electrodes as we lack in-house large-scale cell production capabilities Q: Tariff impact on profitability guidance for fourth quarter A: Tariff impact is baked into projections, with non-tariffable costs mitigating its effect Q: RV market trends and contribution A: Modest 5%-10% industry growth, but wider adoption of products across OEM platforms with re-contenting Q: Trucking market contribution outlook A: Encouraging engagement with fleets, fragmented market with potential for growth as trials expand Q: Update on Stryten Energy collaboration A: Active relationship, product development for new markets like golf cart, but not meaningful revenue expected this year