Earnings call transcript: Flux Power Holdings Q3 2025 sees revenue rise, stock dips

Flux Power Holdings reported its Q3 FY2025 earnings, revealing a mixed financial performance. The company posted revenue of $16.7 million, surpassing forecasts of $14.97 million. However, it reported an earnings per share (EPS) of -$0.12, missing the forecasted -$0.09. Following the announcement, Flux Power’s stock dropped 7.11% in aftermarket trading. According to InvestingPro data, the stock has shown significant volatility, with a beta of 1.53, though it’s currently trading below its Fair Value. InvestingPro subscribers have access to 10+ additional exclusive insights about FLUX’s market position and future prospects.

Key Takeaways

• Revenue increased by 16% year-over-year, reaching $16.7 million.
• EPS fell short of expectations, coming in at -$0.12 against a forecast of -$0.09.
• Stock price declined by 7.11% in aftermarket trading.
• Gross profit improved significantly, with a 32.5% increase from the previous year.
• The company is focusing on expanding its domestic manufacturing capabilities.

Company Performance

Flux Power Holdings demonstrated strong revenue growth in Q3 FY2025, achieving a 16% increase compared to the same quarter last year. The company’s gross profit also saw a notable rise of 32.5%, reflecting improved operational efficiencies and strategic initiatives. Despite these gains, the net loss narrowed to $1.9 million from $3.0 million in Q3 FY2024, indicating ongoing challenges in achieving profitability.

Financial Highlights

• Revenue: $16.7 million, up 16% from Q3 FY2024
• Gross Profit: $5.3 million, up 32.5% from Q3 FY2024
• Gross Margin: 32%, up from 28% in the previous year
• Net Loss: $1.9 million, improved from $3.0 million in Q3 FY2024
• Cash Position: $500,000 as of March 31, 2025

Earnings vs. Forecast

Flux Power’s actual EPS of -$0.12 fell short of the forecasted -$0.09, representing a miss of approximately 33.3%. This deviation, while notable, was offset by the company’s revenue beat, which exceeded expectations by approximately $1.73 million.

Market Reaction

Following the earnings release, Flux Power Holdings’ stock price fell by 7.11% in aftermarket trading, closing at $1.83. Prior to the earnings announcement, the stock had experienced a 3.14% increase, closing at $1.91. The stock’s movement reflects investor concerns over the EPS miss despite the revenue beat.

Outlook & Guidance

Looking ahead, Flux Power Holdings is targeting a gross profit margin of 40% or higher and plans to expand its domestic manufacturing capabilities. The company is also focusing on developing its Sky EMS software platform and pursuing five strategic initiatives, including profitable growth and operational efficiencies. For deeper insights into Flux Power’s growth trajectory and comprehensive analysis, investors can access the detailed Pro Research Report available exclusively on InvestingPro, which covers over 1,400 US stocks with expert analysis and actionable intelligence.

Executive Commentary

CEO Krishna Vanka emphasized the company’s vision, stating, "We are shaping the future of intelligent energy solutions where every battery functions as part of a connected self-optimizing network." Kelly Fry, Chief Revenue Officer, highlighted the strategic shift, saying, "We are positioning ourselves as a software company that happens to have very good batteries."

Risks and Challenges

• Supply Chain Pressures: Ongoing tariff pressures may affect cost structures and sourcing strategies.
• Profitability Concerns: Despite revenue growth, achieving consistent profitability remains a challenge.
• Market Competition: The competitive landscape requires continuous innovation and differentiation.
• Macroeconomic Factors: Economic fluctuations could impact demand in key markets.
• Regulatory Changes: Potential changes in environmental regulations could affect operations and costs.

Q&A

During the earnings call, analysts inquired about the impact of tariffs and the company’s response strategies. Executives reassured stakeholders that minimal impact is expected in Q4 due to existing inventory levels. Additionally, there was significant interest in the Sky EMS platform, with executives noting increased quotation activities and customer engagement.

Full transcript - Flux Power Holdings Inc (FLUX) Q3 2025:

Conference Call Operator: Greetings, and welcome to the Flux Power Holdings Fiscal Third Quarter twenty twenty five Financial Results Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. Before we begin the formal presentation, I would like to remind everyone that statements made on the call and webcast may include predictions, estimates or other information that might be considered forward looking.

While these forward looking statements represent our current judgment on what the future holds, they are subject to risks and uncertainties that could cause actual results to differ materially. You are cautioned not to place undue reliance on these forward looking statements, which reflect our opinions only as of the date of this presentation. Please keep in mind that we are not obligating ourselves to revise or publicly release the results of any revision to these forward looking statements in light of new information or future events. Throughout today’s discussion, we will attempt to present some important factors relating to our business that may affect our predictions. You should also review our most recent Form 10 ks for a more complete discussion of these factors and other risks, particularly under the heading Risk Factors.

A press release detailing these results crossed the wire this afternoon at 04:01PM Eastern Time and is available in the Investor Relations section of our company’s website, fluxpower.com. Your hosts today, Krishna Vanka, Chief Executive Officer Kevin Royal, Chief Financial Officer and Jeff Mason, VP of Operations, will present results of operations for the fiscal third quarter ended 03/31/2025. At this time, I will turn the call over to FluxPower’s CEO, Krishna Vanka.

Krishna Vanka, Chief Executive Officer, Flux Power Holdings: Thank you, operator, and good afternoon, everyone. I am very pleased to welcome you to today’s third fiscal quarter twenty twenty five financial results conference call. Since joining Flux in March, I have spent some good time engaging with our internal team, products, customers, and partners. This has given me a clear view into how our solutions drive value for our customers and where we must focus to scale responsibly and profitably. With that said, based on these insights, we have aligned our five strategic initiatives that will guide our execution, culture, and performance metrics moving forward.

Let me take them one by one with you. Number one, profitable growth. Our top priority here is achieving consistent quarterly profitable results as we scale. Number two, operational efficiencies. We are aggressively optimizing our supply chain and internal processes to reduce costs, especially amid this tariff uncertainty.

Jeff Mason will touch on tariffs in more detail later on this call. Number three, solution selling. Led by our Chief Revenue Officer, Kelly Pry, this initiative is transforming how we sell by aligning our offerings to the customer’s problem. Number four, build the right products. We are focused on innovation that will meet real customer needs while expanding our margins.

Number five, software and recurring revenue. Very exciting year. Sky EMS, our intelligent battery platform, is the foundation for a broader recurring revenue strategy. With that said, today I do want to do a little bit of deep dive onto those last two initiatives. With the launch of the G96 solution, FlexPower is advancing the electrification of airline drone support equipment by addressing growing demands for higher power, greater intelligence, and sustainable operations.

This product is helping us further expand our portfolio to support high energy demand pushback tractors, positioning Plattsburgh as a technology leader in the shift to clean, high performance GSE electrification. We continue to develop and expand our SkyMSA platform to support the full life cycle of an intelligent battery. What does this mean? Number one, plan. We will provide tools for fleet and infrastructure planning.

Number two, operate, providing the real time operational insight. Number three, optimizing the usage on the fleet. Number four, predictive maintenance. Number five, providing recycling with respect to the second life options. Sky EMS is already in pilot with select customers.

As you may have noticed, earlier this week, we announced a patent award for Intelligent Battery Lifecycle Maximization, which is a proprietary AI based algorithm. As FlexFlow accelerates its evolution from a battery manufacturer to a technology driven energy solutions provider, these innovations and our Sky software will play a central role. For us to achieve this vision, we are planning to have every battery be shaped to be cloud connected moving forward. We are incredibly excited about Sky EMS, and we’ll share more details about this software strategy on our future calls. I will now turn the call over to Jeff Mason to discuss operational updates.

Jeff?

Jeff Mason, VP of Operations, Flux Power Holdings: Thank you, Krishna. As geopolitical complexities continue to influence global trade, we remain steadfast in our commitment to operational resilience and value creation. We are responding to tariff pressures and accelerating our roadmap to sustain momentum. Our product does contain a partial made in China content that is impacted by the latest tariffs. We have already updated our price list and are sharing with our customers.

Considering recent tariff changes impacting the global supply chain, we are rapidly adapting sourcing tactics as part of our short term supply chain response. We are accelerating the evaluation of new suppliers, particularly for battery cells and other raw materials. We will continue supplier continuity by maintaining existing long term supplier relationships, while transitioning to alternative regions with lower tariff exposures. We are reinforcing the company’s commitment to LFP battery solutions to ensure we meet our existing customer needs and requirements. And we are investigating new battery chemistries tailored to specific applications, ultimately providing new opportunities for our existing and future customers.

Our long term supply chain strategy has adopted a commodity based sourcing strategy to ensure resilience and cost efficiency in key material categories. We are focused on partnerships and building strategic alliances with OEM suppliers and manufacturers who can consistently deliver high quality and competitively priced components. We are also focused on supplier diversification, reducing the exposure to high tariff regions by onboarding qualified suppliers across alternative regions, including North America. Our objective is to establish a diversified and agile supply network that supports long term scalability and innovation. Looking ahead, we are working toward domestic assembly and manufacturing expansion.

We are committed to scaling domestic assembly capabilities in The U. S. With a focus on reducing exposure to the international logistics and tariff zones. We are also planning to accelerate R and D investments, including tariff resistant product design. Our engineering teams are prioritizing designs that use lower tariff materials and including potential new chemistries.

We are also advancing innovation partnerships and collaboration with U. S. Based companies to secure future supply chain at competitive costs. Despite near term global headwinds, our proactive strategy ensures three goals maintain optimal margins, sustain growth driven by U. S.

Based manufacturing and product innovation, and long term competitiveness with a cost efficient diversified supply chain and scalable infrastructure. Taken together, we are transforming challenges into catalysts for future growth. I will now turn the call over to Kevin Royal to discuss the fiscal third quarter highlights and then walk through our business updates and financials. Kevin?

Kevin Royal, Chief Financial Officer, Flux Power Holdings: Thank you, Jeff. Revenue for the third fiscal quarter increased 16% to $16,700,000 compared to $14,500,000 in the third fiscal quarter of twenty twenty four, driven by higher demand in the material handling and ground support equipment markets, with unit growth of 1025% respectively. Revenue for the first quarter of fiscal twenty twenty five was $16,100,000 and revenue for the second quarter of fiscal twenty twenty five was $16,800,000 Gross profit for the third fiscal quarter of twenty twenty five increased 32.5% to 5,300,000.0 compared to a gross profit of 4,000,000 in the third fiscal quarter of twenty twenty four. Gross margin increased to 32% in the third fiscal quarter of twenty twenty five as compared to 28% in the third fiscal quarter of twenty twenty four. Gross profit margin increased by three seventy four basis points due to a decrease in warranty related costs, partially offset by slightly higher material costs.

We have a continued focus on product cost reduction in order to further improve our gross profit margins with a near term target of 40% or higher gross profit margin. Selling and administrative expenses increased to 5,700,000.0 in the third fiscal quarter of twenty twenty five, as compared to 5,300,000.0 in the third fiscal quarter of twenty twenty four, primarily attributable to professional fees of approximately 500,000 associated with a multi year restatement of previously filed financial statements. Research and development expenses decreased to 1,100,000.0 in the third fiscal quarter of twenty twenty five, compared to 1,300,000.0 in the third fiscal quarter of twenty twenty four, mainly driven by lower salaries and severance costs. Adjusted EBITDA loss was $1,100,000 in the third fiscal quarter of twenty twenty five, as compared to an adjusted EBITDA loss of $1,700,000 in the third fiscal quarter of twenty twenty four. Net loss for the third fiscal quarter of twenty twenty five was $1,900,000 compared to a net loss of $3,000,000 in the third fiscal quarter of twenty twenty four, primarily attributable to an increase in gross profit in the current quarter, partially offset by the increase in selling and administrative expenses related to costs associated with the multi year restatement of previously filed financial statements.

Cash was 500,000.0 on 03/31/2025, as compared to 600,000.0 at 06/30/2024, reflecting changes in working capital management. Available working capital includes our line of credit as of 03/31/2025, under our $16,000,000 credit facility from Gibraltar Business Capital, with a remaining available balance of 3,750,000.00, subject to borrowing base limitations and satisfaction of certain financial covenants, and 1,000,000 available under our subordinated line of credit with Cleveland Capital. We continue to be in good standing with both Gibraltar and Cleveland Capital and remain confident in their continued support of Flux in our long term mission. I will now turn it over to Krishna for his final remarks prior to the question and answer session.

Krishna Vanka, Chief Executive Officer, Flux Power Holdings: Thank you, Kevin. As you saw, during the quarter, we delivered strong year over year revenue and gross margin growth, driven by enhanced sales strategies, growing demand for our innovative suite of products, even with some of the tariff challenges starting to emerge in Q3. Here, we are shaping the future of intelligent energy solutions where every battery functions as part of a connected self optimizing network. This evolution allows us to deliver software driven value that’s going to extend beyond the traditional energy storage today, unlocking operational insights, predictive maintenance and long term efficiencies for our customers. I’m very excited about this future.

We look forward to keeping our shareholders informed as we execute against our strategic initiatives and expand our leadership in this market supported by a growing diverse base of large enterprise customers. Thanks for joining us today. I’ll now turn the call back over to the operator for the Q and A session. Operator?

Conference Call Operator: Ladies and gentlemen, we will now begin the question and answer session. First question comes from Craig Irwin with ROTH Capital Partners. Please go ahead.

Craig Irwin, Analyst, ROTH Capital Partners: Evening and thank you for taking my questions. Krishna, congrats on a strong quarter out of the gate. It’s nice to see accountability driving execution at Flux, so congratulations there. The last several months, there have been positive developments in the airport ground support equipment space. It seems that both airport operators and airlines are looking to partner on ways to adopt environmentally responsible business practices.

Can you talk about the sensitivity of these customers to potential pricing actions from tariffs and some of the volatility we’re seeing for other areas in clean technology like the withdrawal of subsidies? I I know they generally weren’t getting subsidies, but can you can you maybe talk about the commitment of these customers to their programs and their suppliers?

Krishna Vanka, Chief Executive Officer, Flux Power Holdings: Definitely. Thanks for the question. And, as we mentioned, we are very closely working with our customers in the GSV, and they are well committed on a long term for their ESG goals and making the transformation. So it is very early for us to say the full impact of the tariffs or the broader reduction of subsidies. But at this point, I can say that it’s almost business as usual and their commitment to do the transformation work with us is a growing basis.

Craig Irwin, Analyst, ROTH Capital Partners: Thank you. The second thing I wanted to ask about is your Sky BMS. So, you have had systems out there with major customers in testing, customers that have partnered with Flux to maybe shape and inform the functionality that they would like. What sort of feedback do you have from these customers as far as the potential ROI that they’re seeing on the adoption of this technology? And maybe if you could also comment as well as far as on the maintenance side and the overall lifecycle analysis, whether or not you think this technology can extend the functional life of the systems you’re deploying at customers.

Krishna Vanka, Chief Executive Officer, Flux Power Holdings: Definitely. Thanks for the question. Yeah, SkyBMS moving forward is gonna be a very important component on how our customers realize the value of our solution. And as I mentioned earlier, we already have multiple customers that are working towards integrating this technology into their day to day operations. The ROI is definitely gonna come back in the form of reducing the number of visits for us to go do any maintenance because that data is going to provide the intelligence for us to remotely take care of a lot of issues.

That’s number one internally for us. From a customer perspective, it’s part of the ecosystem. This is where they already run their operations on different technologies and this is where our Sky EMS, the APIs and then whatnot, is going to bring the integration data together. So definitely a higher ROI than disconnected systems that they have today. The battery intelligence is going to be the central component, both with the charger on one side and the fleet telematics on the other side.

Craig Irwin, Analyst, ROTH Capital Partners: Excellent. Then my last question is related to the forklift market and the adoption of lithium ion you’re seeing with your customers. So the short term uncertainty we’re seeing in the economy does not seem like it’s really significantly disrupted capital plans or longer term capital plans, should say. Are you seeing any change or difference in the level of interest of these Tier one customers as far as adoption of lithium for their distribution centers over the next couple of years. Is this potentially driving efficiency initiatives that these customers that might bring you new opportunities as people look towards the other side of this short term uncertainty?

Krishna Vanka, Chief Executive Officer, Flux Power Holdings: Yeah, another great question. Thank you. We are very early in this process, as you know, but we are actually hearing that certain of our competitors honestly altered shipments altogether because they are subjected to higher tariffs compared to where we are. And we believe this actually is providing us an advantage to take more market share. We are seeing this in terms of increased level of interest coming from these types of customers.

And also, have seen an increase in the quotation activities as part of our sales force. So, as Jeff mentioned, we are turning this into a greater opportunity for us.

Craig Irwin, Analyst, ROTH Capital Partners: Great. Well, thanks again for taking my questions. Congratulations on strong results. I’ll go ahead and hop back in the queue.

Krishna Vanka, Chief Executive Officer, Flux Power Holdings: Thanks. Thank you.

Conference Call Operator: Your next question comes from Eric Stine with Craig Hallum. Please go ahead.

Luke, Analyst, Craig Hallum: Hey, this is Luke on for Eric. Thanks for taking our questions. So first, we know that last quarter adding the new sales personnel was a big point of emphasis. Could you maybe just broadly talk more about some of the positive changes you’ve seen so far as a result of this new effort? And if you plan to make more additions to that team, maybe to target some more specific or underpenetrated end markets?

Thanks.

Krishna Vanka, Chief Executive Officer, Flux Power Holdings: Sure, definitely. Good question. I actually just invited Kelly Fry, our CRO, to this room. So, it’s almost like the question came by you,

Kelly Fry, Chief Revenue Officer, Flux Power Holdings: but I’ll let Kelly answer your question there. Yeah, the biggest thing that we’ve seen is that the market for lead acid batteries, is the first step towards electrification, very much is a commoditized product, because it’s not a very intelligent product, if you will. It doesn’t have a lot of data associated to it. When someone moves to lithium, you have an opportunity to, take that data and use it to really fit into a larger solution that the client is trying to solve in terms of their overall energy usage, the overall life cycle of their equipment, be it in the ground support equipment market or in the material handling market. So if I were to put a bow around it, I would say that the real change that we’ve seen in the first couple of months that I’ve been here is the opportunity to position us as a software company that happens to have very good batteries, and that we fit into an ecosystem of telematics on the equipment, be it at the airport or in the material handling space, or how that equipment might interact with the over the road fleet and the electrification of that.

So yes, very exciting times.

Luke, Analyst, Craig Hallum: Great. Very helpful. Thank you. And just for a follow-up here. So last call, you talked about some heavy duty models like looks like the G96 now being introduced and deployed in the next few months.

Can you maybe talk a bit more about how this timeline is sort of trending for deployment and what sorts of end markets you expect to serve here outside of airport GSE? Thanks.

Krishna Vanka, Chief Executive Officer, Flux Power Holdings: So that particular model is geared towards the airports and the GSEs with those types of trucks. That said, as you can see, we are evolving more and more into the higher voltage category here, which means it can open up new verticals eventually or even more domination into this GSE market as we support more and more models. So the product that we announced is already with customer testing, validating, and also in production. So it’s great news for us. We were able to move forward pretty quickly last quarter, and this is the pace at which we want to start developing and deploy new products.

Luke, Analyst, Craig Hallum: Great. That’s helpful. I’ll turn it over. Thank you.

Conference Call Operator: Your next question comes from Rob Brown with Lake Street Capital Markets. Please go ahead.

Rob Brown, Analyst, Lake Street Capital Markets: Good afternoon. Good. Pretty good orders in the quarter. I just wanted to get a sense of what the order trends kind of are. I know the visibility is not as good now, but but how do you sort of see the order trends?

Do you continue to see a bit of a back end loaded order book at this point?

Krishna Vanka, Chief Executive Officer, Flux Power Holdings: Yeah, this is Krishna, and I’ll also ask Kevin to add anything after my answer here. But fortunately, we have pretty good inventory in stock that is not subject to these full reciprocal tariffs. As a result, we are anticipating that Q4 will be very minimally impacted by the tariff increase. So the demand continues to continue and our commitment to deliver on time is also in the process.

Kevin Royal, Chief Financial Officer, Flux Power Holdings: Yeah, Rob, this is Kevin. As you can imagine, the tariffs were a bit of a shock to the system and we’re working with our customers to really gauge demand given unnecessary increase in selling prices to cover those tariffs. I think as Krishna mentioned in an earlier answer, it is certainly true that we’re feeling as though we could come out of this with a competitive advantage from a cost standpoint. And we are seeing early activity and quite a bit of incoming inquiries resulting in our sales force putting more quotations out to customers and potential customers.

Rob Brown, Analyst, Lake Street Capital Markets: Okay, great. Thank you. I’ll turn it over.

Conference Call Operator: There are no further questions. Please continue.

Krishna Vanka, Chief Executive Officer, Flux Power Holdings: Thank you, operator. I would like to thank each of you on this call for joining our financial results conference today. And we all here look forward to continue to update you on our progress quarter by quarter and the growth we are making. Thanks and have a great day.

Conference Call Operator: Ladies and gentlemen, this concludes today’s conference call. Thank you for your participation. You may now disconnect.

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