Summary of Dragonfly Energy Holdings Q2 2026 Earnings Call

1Key Financial Results and Metrics

Net Sales: $13.2 million, including $8.4 million from OEM sales and $4.5 million from direct-to-consumer (DTC) sales.

Gross Profit: $4.3 million, with a gross margin of 33.0%, up 470 basis points year-over-year, benefiting from a $1.1 million tariff refund.

Operating Expenses: Reduced to $7.2 million from $7.9 million, reflecting cost reduction measures.

Net Loss: $5.5 million ($0.43 per diluted share), an improvement from a net loss of $7.0 million in the prior year.

Adjusted EBITDA: Negative $1.6 million, a $0.6 million improvement year-over-year and a $3.0 million sequential improvement from Q1 2026.

2Strategic Updates and Business Highlights

Heavy-Duty Trucking Market: First significant revenue contribution of approximately $0.5 million; expected to grow to $1.3 million in Q3 2026, with ongoing expansion potential.

Acquisition of Dakota Lithium: Acquired for $4 million, expected to enhance product offerings and revenue streams with minimal incremental operating expenses. Dakota generated $12 million in revenue in 2025, but faced inventory constraints.

Leadership Additions: Welcomed Robert Keller as Director of National Fleet Sales and Dr. Lukas Lutz to the Board, enhancing expertise in fleet operations and battery technology.

Intellectual Property: Received a Japanese patent for solid-state battery technology, expanding global protection for manufacturing processes.

3Forward Guidance and Outlook

Q3 2026 Guidance: Projected net sales of approximately $13.5 million, driven by growth in the trucking sector but tempered by weakness in the RV market. Expected adjusted EBITDA to be negative $2.4 million, influenced by temporary costs related to Dakota Lithium's operations and ongoing facility consolidation.

Long-term Target: Aiming for positive adjusted EBITDA at an annualized net sales run rate of approximately $70 million, supported by the Dakota acquisition and scaling trucking revenue.

4Bad News, Challenges, or Points of Concern

RV Market Weakness: The RV market remains soft, with shipments down 14.2% year-over-year, and expectations of continued softness into 2027 due to macroeconomic factors affecting discretionary spending.

Dakota Lithium Performance: Revenue from Dakota Lithium has been constrained due to inventory issues, which could impact short-term financial performance despite long-term potential.

Operating Costs: Anticipated increase in operating expenses related to the Dakota acquisition and ongoing facility consolidation could pressure near-term profitability.

5Notable Q&A Insights

Dakota Lithium Acquisition: Management views Dakota as a complementary sales channel that will enhance product diversity and market reach without significant additional operating costs.

Trucking Market Potential: The pipeline for heavy-duty trucking is promising, with large fleets in pilot phases, indicating significant growth potential in 2027 and beyond.

Industrial Applications: Emerging opportunities in intelligent transportation systems and telecom markets could provide additional revenue streams, although these are not currently included in forecasts.

Future Acquisitions: Management remains open to similar strategic acquisitions, indicating a proactive approach to growth and market expansion. This summary encapsulates the key points from Dragonfly Energy's Q2 2026 earnings call, highlighting financial performance, strategic initiatives, and market outlook while addressing challenges and insights from the Q&A session.