Flux Power Holdings, Inc. Q1 FY2026 earnings call

Key Points - Revenue in the quarter was affected by temporary customer order pause due to tariff uncertainty and macroeconomic caution, impacting gross margins temporarily. - Saw order rebound in the second fiscal quarter with $2.4 million in multimillion-dollar orders from top material handling customers and a large order with a major airline, doubling airline customer base. - Progress on operational efficiencies with another limited workforce reduction, reducing headcount cost by 20% while maintaining production. - Retained NASDAQ Capital Markets listing in October. - Completed two capital raises totaling $13.8 million, to be used for working capital and product development. - Received UL EE listing across material handling portfolio, opening new market segments. - Achieved UL 1973 listing for 80-volt intelligent batteries, unlocking new opportunities in AGVs and AMRs. - Graduated SkyMS 2.0 SaaS platform and converted a major airline from beta to paying customer.

Revenue in the first quarter of 2026 was $13.2 million, compared to $16.1 million in the same quarter last year. Gross margin was 28.6% in the first quarter of 2026, down from 32.4% in the prior year period. Operating expenses in 2026 were $5.9 million, compared to $6.4 million in 2025. The net loss for the first quarter was $2.6 million or $0.15 per share, compared to a net loss of $1.7 million or $0.10 per share in 2025. Adjusted EBITDA for the first quarter was negative $1.7 million, compared to negative $400,000 in the same quarter a year ago. Cash and cash equivalents ended the quarter at $1.6 million.

Guidance - Noted order rebound in the second fiscal quarter with $2.4 million in orders from top material handling customers. - Sees promising trends in the second half of the year, particularly strength in the third fiscal quarter. - With product acceleration from capital raises, believes it will create more opportunities and better margins.

Risks - Uncertainty surrounding tariff situation and macroeconomic concerns that caused temporary customer order pause and impacted gross margins. - Risks associated with forward-looking statements as detailed in SEC filings.

Q: Hey, Krishna. First question on the order trends sort of post-quarter. You talked about some recovery in orders, I guess, and you've announced some bigger orders. But how are the order trends coming through? And are you seeing that strength to continue into the end of the fourth quarter?

A: Yeah. So while we are seeing some evidence of a rebound, you know, we highlighted $2.4 million in orders for the material handling industry as well as a significant airline order. We really are still seeing some headwinds, which we continue to attribute to recent tariffs as well as some impact in the quarter from the government shutdown. However, we are seeing more promising trends in the second half of the year. And in particular, seeing some strengthening in our third fiscal quarter, which is 2026.

Q: And then in the ground support equipment market, you've had good progress there in terms of adding customers and expanding penetration in the customers. How is that market sort of looking from an investment standpoint on their part in terms of rolling out product and what sort of further penetration can you get there?

A: Yeah. They continue to adopt the clean energy solutions in the GSE. So I'm not seeing any pushback from the overall goal and how the airlines are thinking about going lithium, so that trend is very supportive. It was really this short-term tariff that paused some of the progress. But as Kevin mentioned, early next year, calendar-wise, we'll start seeing more activity. As you noticed, we doubled the airlines we now serve. And some of the airlines are just getting started, like the first order, literally, in the case, as I mentioned on the call. So we look forward to them taking more and more orders as they start deploying lithium.