8-K: Flux Power Reports 16% Revenue Increase in Fiscal Year 2025 Third Quarter, Driven by Strong Demand and Strategic Expansion

Flux Power announces a 16% increase in revenue for Q3 2025, reaching $16.7 million, fueled by growth in material handling and ground support markets and the launch of new software and hardware solutions.

Summary

• Flux Power reported a 16% increase in revenue for the third quarter of fiscal year 2025, reaching $16.7 million, compared to $14.5 million in the same period last year.
• The revenue growth was driven by increased demand in both material handling and ground support markets, with unit growth of 10% and 25%, respectively.
• Gross profit increased by 31% to $5.3 million, with gross margin improving to 32% from 28% year-over-year.
• The company's adjusted EBITDA loss decreased to $1.1 million from $1.7 million in the prior year.
• Net loss for the quarter was $1.9 million, an improvement from the $3.0 million loss in the third quarter of 2024.
• Flux Power's order backlog as of March 31, 2025, was $16.9 million, and as of April 30, 2025, it was approximately $15.1 million.
• The company launched the new SkyEMS software platform and G-Series G96 High Voltage lithium-ion energy solution.
• Krishna Vanka replaced Ron Dutt as CEO, and Kelly Frey was appointed Chief Revenue Officer.
• The company was awarded a patent for its Intelligent Battery Cycle Life Maximization Algorithm.
• Flux Power expects to achieve sustainable positive cash flow this calendar year.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive due to the revenue growth, improved gross margins, and reduced EBITDA loss. However, the company is still operating at a net loss and has low cash reserves, which tempers the overall positive outlook.

Positives

• Revenue increased by 16% year-over-year, indicating strong demand for Flux Power's products.
• Gross profit and gross margin improved, suggesting better cost management and pricing strategies.
• The adjusted EBITDA loss decreased, showing progress towards profitability.
• The company secured a patent for its AI-based algorithm, enhancing its technology portfolio.
• New airline customer orders and total GSE orders demonstrate market traction.
• The launch of the SkyEMS software platform and G-Series G96 High Voltage solution expands the company's offerings.
• The appointment of a new CEO and Chief Revenue Officer could bring fresh perspectives and leadership.
• The company expects to achieve sustainable positive cash flow this calendar year.

Negatives

• The company still reported a net loss of $1.9 million for the quarter.
• Cash reserves are low at $0.5 million as of March 31, 2025.
• Selling and administrative expenses increased due to professional fees associated with the restatement of previously filed financial statements.
• The company relies on a line of credit for working capital, with $5.0 million remaining available subject to borrowing base limitations and financial covenants.

Risks

• The company's ability to comply with the terms of its credit facilities and obtain necessary capital is a risk.
• The company's ability to raise capital and continue as a going concern is a risk.
• Uncertainties related to the development and success of new products, projected sales, and customer acceptance could impact future results.
• Tariffs and supply chain issues could add uncertainty in the market.
• The company's ability to fulfill backlog orders and realize profit from contracts is subject to change.

Future Outlook

Flux Power anticipates continued growth momentum in 2025, driven by investments in software and battery product offerings, and expects to achieve sustainable positive cash flow this calendar year.

Management Comments

• The third quarter of fiscal 2025 was underscored by revenue and margin momentum as we expanded products and software to support the new orders reflecting an industry wide shift to lithium-ion solutions, said Krishna Vanka, Flux Powers CEO.
• We are shaping the future of intelligent energy solutions, where every battery functions as part of a connected, self-optimizing network.
• We believe our software will create a significant recurring revenue stream.
• With strategic supply chain and profitability improvement initiatives, cost reduction, higher volume purchasing, and increasing the price of our products for new orders, we are targeting continued margin improvement, commented Kevin Royal, Chief Financial Officer of Flux Power.

Industry Context

The announcement reflects the broader industry trend towards electrification and the increasing adoption of lithium-ion energy storage solutions in commercial and industrial sectors. Flux Power is positioning itself to capitalize on this trend with its advanced battery packs and software solutions.

Comparison to Industry Standards

• Flux Power's revenue growth of 16% is comparable to other companies in the lithium-ion battery space, such as Romeo Power (which has since merged with Nikola) and Workhorse Group, which have also experienced significant growth due to the increasing demand for electric vehicles and energy storage solutions.
• The company's focus on developing a software platform (SkyEMS) for battery management aligns with the industry trend of offering integrated hardware and software solutions, similar to what Tesla does with its battery management systems.
• The gross margin of 32% is within the typical range for companies in this sector, but there is room for improvement compared to industry leaders like Tesla, which often have higher margins due to economies of scale and vertical integration.

Management Changes

Stakeholder Impact

• Shareholders may be encouraged by the revenue growth and improved financial performance.
• Employees may benefit from the company's growth and expansion.
• Customers will have access to new and innovative energy storage solutions.
• Suppliers may see increased demand for their products and services.
• Creditors will be monitoring the company's ability to manage its debt and maintain financial stability.

Next Steps

• The company plans to provide further updates on its full software strategy in the coming months.
• Flux Power will host a conference call to discuss the Q3 2025 financial results.

Key Dates

Keywords

lithium-ion batteries, energy storage, electric vehicles, material handling, ground support equipment, SkyEMS, financial results, revenue, EBITDA, backlog