FLUX Power Q4 2026 Earnings Call Summary

1Key Financial Results and Metrics

Q4 Revenue: $8.2 million, up 25% sequentially from $6.6 million, but down from $16.7 million year-over-year.

Full Year Revenue: $42.1 million, down from $66.4 million in 2025.

Gross Margin: 27.4% for Q4, slightly improved from 27.3% in Q3 but down from 34.5% in Q4 2025. Full year gross margin at 30.2%, down from 32.7% in 2025.

Operating Expenses: $4.4 million in Q4, down from $4.8 million in Q3 and $6.5 million in Q4 2025. Full year operating expenses decreased to $19.2 million from $26.8 million.

Net Loss: $2.3 million for Q4 ($0.01 per share), improved from a net loss of $3.2 million in Q3 and $1.2 million in Q4 2025. Full year net loss was $7.4 million ($0.38 per share), slightly worse than $6.7 million ($0.40 per share) in 2025.

Adjusted EBITDA: Negative $1.6 million for Q4, improved from negative $2.5 million in Q3 but worse than positive $500,000 in Q4 2025. Full year adjusted EBITDA was negative $4.5 million compared to negative $100,000 in 2025.

Cash Position: Ended Q4 with $300,000 in cash, down from $400,000 in Q3.

2Strategic Updates and Business Highlights

Customer Base Diversification: Initiatives to reduce dependency on a major customer are underway, including new marketing programs and strategic hiring.

New Market Entry: Entered the robotics vertical in collaboration with a large tech company, deploying over 70 batteries for testing.

OEM Partnerships: Secured a 50% increase in yearly order commitment from a white label customer and received certification from Hyster-Yale for Class I, II, and III forklifts, expanding market share.

SkyEMS 3.0 Launch: Introduced an AI-driven energy management platform that enhances customer engagement and positions Flux as a technology company, not just a battery manufacturer.

3Forward Guidance and Outlook

Q1 2027 Revenue Expectation: Anticipated to decline to $6 million to $7 million, with a rebound expected in Q2 to $8 million to $9 million.

Long-term Growth Strategy: Focus on profitable growth, operational efficiencies, solution selling, and integrating value-added software for recurring revenue streams.

4Bad News, Challenges, or Points of Concern

Dependence on Major Customer: Continued capital freeze from the largest customer has negatively impacted revenue.

Year-over-Year Revenue Decline: Significant drop in revenue compared to prior year highlights ongoing challenges.

Gross Margin Pressure: Despite revenue growth, gross margins remain under pressure due to product mix changes, tariffs, and lower volumes leading to higher unabsorbed costs.

Economic Headwinds: Broader economic disruptions, including tariffs and fuel prices, are affecting business operations.

5Notable Q&A Insights

SkyEMS 3.0 Deployment: Expected to be integrated with existing customers and is seen as a value-add to hardware sales.

Robotics Market Potential: Significant opportunity with a major tech company, with potential for large-scale contracts in the coming years.

Visibility with Major Customer: Ongoing communication suggests potential recovery in order activity, with positive signs for future business.

Gross Margin Recovery: Expected to improve when quarterly revenues exceed $12 million, with a target of reaching above 30% gross margin. Overall, Flux Power is navigating a challenging environment with strategic initiatives aimed at diversifying its customer base and enhancing product offerings, while facing headwinds from economic factors and reliance on a key customer.