Summary of Dragonfly Energy Holdings Q2 2026 Earnings Call

1Key Financial Results and Metrics

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

Gross Profit: $4.3 million, resulting in a gross margin of 33.0%, up 470 basis points year-over-year, aided by $1.1 million in tariff refunds.

Operating Expenses: Reduced to $7.2 million from $7.9 million due to cost-cutting measures.

Net Loss: $5.5 million, or $0.43 per diluted share, improved from a loss of $7.0 million in the prior year.

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

2Strategic Updates and Business Highlights

Heavy-Duty Trucking Market: First significant revenue contribution of $0.5 million, with expectations to double to $1.3 million in Q3 2026. The company is seeing growth from large fleet customers, including Stevens Transport.

Acquisition of Dakota Lithium: Acquired for $4 million, Dakota Lithium is expected to enhance Dragonfly's product offerings and revenue streams. The acquisition is anticipated to be accretive to adjusted EBITDA by Q4 2026.

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

Intellectual Property: Received a Japanese patent allowance for solid-state battery technology, strengthening the company's competitive position.

3Forward Guidance and Outlook

Q3 2026 Expectations: Projected net sales of approximately $13.5 million, driven by growth in the trucking sector but tempered by weakness in the RV market. Adjusted EBITDA is expected to be negative $2.4 million, influenced by temporary factors.

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 growing 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. This trend is expected to continue into 2027 due to macroeconomic factors affecting discretionary spending.

Dakota Lithium's Past Performance: Dakota's revenue declined significantly in 2025 due to inventory constraints, which may pose risks to the expected recovery and growth.

Operating Costs: Incremental costs associated with restoring Dakota's operations could pressure margins in the near term.

5Notable Q&A Insights

Dakota Lithium Metrics: The acquisition is viewed as a strategic sales channel that could accelerate EBITDA breakeven, with limited incremental operating expenses.

Trucking Market Potential: The pipeline for heavy-duty trucking is promising, with large fleets showing interest, although specific revenue projections for 2027 remain uncertain.

Industrial Applications: Emerging opportunities in intelligent transportation systems and telecom markets were highlighted as potential growth areas.

Future Acquisitions: Management remains open to exploring similar acquisition opportunities to enhance growth and scale. Overall, Dragonfly Energy Holdings reported solid Q2 results with strategic initiatives in place to drive future growth, although challenges in the RV market and Dakota Lithium's past performance present potential risks.