Flux Power — Fiscal 2026 Fourth Quarter Earnings Summary

Financial Performance

• Q4 2026 revenue was $8.2 million, a 25% sequential increase from $6.6 million in Q3 2026, but a 51% decrease from $16.7 million in Q4 2025.
• Full-year 2026 revenue was $42.1 million, down 37% from $66.4 million in fiscal 2025.
• Q4 2026 gross profit was $2.3 million (27.4% margin), compared to $1.8 million (27.3% margin) in the prior quarter and $5.8 million (34.5% margin) in Q4 2025.
• Full-year 2026 gross profit was $12.7 million (30.2% margin), down from $21.7 million (32.7% margin) in fiscal 2025.
• Q4 2026 operating expenses were $4.4 million, a 33% decrease from $6.5 million in Q4 2025, primarily due to headcount reductions and the absence of $2.9 million in restatement costs incurred in fiscal 2025.
• Full-year 2026 operating expenses were $19.2 million, down from $26.8 million in fiscal 2025.
• Q4 2026 operating loss was $2.1 million, compared to $0.8 million in Q4 2025; full-year operating loss was $6.5 million versus $5.0 million in fiscal 2025.
• Non-GAAP Q4 2026 operating loss was $1.9 million, compared to non-GAAP operating income of $0.3 million in Q4 2025.
• Q4 2026 net loss was $2.3 million ($0.11 per share), compared to $1.2 million ($0.07 per share) in Q4 2025; full-year net loss was $7.4 million ($0.38 per share) versus $6.7 million ($0.40 per share) in fiscal 2025.
• Non-GAAP Q4 2026 net loss was $2.1 million ($0.10 per share), compared to $0.1 million ($0.01 per share) in Q4 2025.
• Adjusted EBITDA for Q4 2026 was negative $1.6 million, compared to positive $0.5 million in Q4 2025; full-year Adjusted EBITDA was negative $4.5 million versus negative $0.1 million in fiscal 2025.
• Cash balance as of June 30, 2026, was $0.3 million, down from $0.4 million as of March 31, 2026, and $1.3 million as of June 30, 2025.
• Accounts receivable decreased to $4.9 million from $11.4 million in the prior year; inventory decreased to $14.8 million from $17.2 million in the prior year.
• Line of credit balance was $6.3 million as of June 30, 2026, down from $13.6 million in the prior year.
• Subordinated debt was eliminated in 2026, compared to $1.0 million in 2025.

Guidance and Future Outlook

• Management expects the leaner cost structure, refreshed sales leadership, and upgraded offerings to benefit the company in fiscal 2027 and beyond.
• The company anticipates delivering renewed growth and accelerating its path to profitability as broader economic conditions improve.
• Forward-looking statements highlight risks regarding the ability to amend the agreement with Gibraltar Business Capital, LLC and secure sufficient funding to support operations.
• The company faces risks related to meeting Nasdaq continued listing standards and the potential impact of tariffs on sourcing costs.

Business Segments and Product Lines

• Released SkyEMS® 3.0, a platform featuring AI-powered insights, predictive analytics, and customizable dashboards.
• Appointed Stu Jacover as Vice President of Sales for Material Handling to expand sales and marketing efforts.
• Achieved certification with a new major OEM, expanding the addressable market within the Material Handling sector.
• Launched new marketing programs aimed at diversifying the customer base.
• Executed supply chain optimization and product redesign efforts to lower product costs and improve margins.

Market and Competitive Landscape

• Revenue growth in Q4 2026 was driven by increased customer orders and shipments into a new vertical market.
• Initial customer feedback on the new SkyEMS® 3.0 platform has been favorable.
• The company operates in competitive markets against peers and larger companies with greater resources.

Risks and Challenges

• The company has faced headwinds during the CEO's first eighteen months, necessitating a reassessment of business priorities.
• Risks include the ability to generate sufficient cash from operations and continue as a going concern.
• Potential manufacturing disruptions and delays in receiving key component parts could impact the ability to fulfill backlog orders.
• Dependence on a few major customers remains a risk, alongside the need to diversify the customer base.
• Legal proceedings related to accounting practices, financial disclosures, and employment policies pose potential expense and timing risks.

Management Commentary and Tone

• CEO Krishna Vanka stated that Q4 revenue was "slightly ahead of expectations" due to increased orders and new vertical market shipments.
• Management highlighted "decisive expense reduction and efficiency initiatives" that resulted in a 30% reduction in fourth-quarter operating expenses compared to the prior year.
• The CEO expressed confidence that the company is "well positioned to deliver renewed growth" following the implementation of a leaner cost structure and refreshed leadership.
• Management emphasized steps taken to "aggressively optimize our supply chain" and "advance product redesign efforts."

Other Key Points

• The fiscal 2025 financial statements included $2.9 million in costs associated with the restatement of previously issued financial statements, which were excluded from non-GAAP metrics in 2025 but not in 2026.
• Stock-based compensation for Q4 2026 was $239,000, compared to $148,000 in Q4 2025; full-year 2026 stock-based compensation was $973,000 versus $979,000 in fiscal 2025.
• The company hosts a conference call on August 20, 2026, at 1:30 p.m. Pacific Time to discuss results.
• The balance sheet shows a total stockholders' equity deficit of $2.6 million as of June 30, 2026, compared to a deficit of $5.4 million in the prior year.