Exchange: NASDAQ | Sector: Industrials | Industry: Electrical Equipment Parts
Q1 2025
Published: Mar 20, 2025
Earnings Highlights
Revenue of $16.13M down 8.3% year-over-year
EPS of $-0.10 decreased by 83.3% from previous year
Gross margin of 32.4%
Net income of -1.67M
"“I can confidently say that we have the right technology at the right time with the right people to scale Flux Power into your market leader in this space.”" - Krishna Vanka
Flux Power Holdings Inc (FLUX) QQ1 2025 Results: Revenue Stabilization, Margin Expansion, and Backlog-Driven Outlook in Industrial Li-ion Energy Storage
Executive Summary
Flux Power reported a bifurcated QQ1 2025 performance characterized by revenue stability and margin expansion, offset by ongoing restatement-related costs and near-term profitability headwinds. In the fiscal first two quarters of 2025, Flux generated revenue of $16.1 million (Q1) and $16.8 million (Q2), marking a YoY progression in Q1 (+9% vs. F1 2024) and a YoY decline in Q2 (-8% vs. Q2 2024) with a positive sequential trend from Q1 to Q2. Gross margins expanded meaningfully from 27% in FY2024 Q4 to 32% in Q1 2025 and 33% in Q2 2025, driven by price increases, cost reductions, and favorable mix, while operating losses persisted due to restatement remediation costs and higher SG&A in Q2. The company reports a solid backlog and improving demand signals: open order backlog was $19.5 million as of Feb 28, 2025, with interim backlogs of $17.5 million as of Dec 31, 2024, suggesting a favorable long-term trajectory if the revenue cadence stabilizes. Management emphasizes transformative growth levers, including expanded product lines, heavier-duty models, and a software-enabled telemetry ecosystem (SkyBMS) with a potential recurring software revenue model. Management also underscored strategic OEM partnerships, UL EE-certified products, and a growing installation base (over 25,000 Flux-powered packs across North America). Near-term profitability remains contingent on sustaining higher gross margins, rationalizing costs post-restatement, and realizing scale in software-enabled solutions. The outlook combines modest Q3 revenue alignment with Q2 and a projected 5-10% QoQ uplift in Q4, with adjusted EBITDA breakeven to modest positive cash flow in Q4, signaling a potential path to profitability if demand stabilizes and cost controls persist.
Key Performance Indicators
Revenue
16.13M
QoQ: 4.37% | YoY:-8.25%
Gross Profit
5.22M
32.36% margin
QoQ: 4.70% | YoY:1.05%
Operating Income
-1.21M
QoQ: -22.03% | YoY:-230.87%
Net Income
-1.67M
QoQ: -13.06% | YoY:-110.60%
EPS
-0.10
QoQ: -10.00% | YoY:-83.33%
Revenue Trend
Margin Analysis
Key Insights
Q1 2025 revenue: $16.1 million, up 9% YoY from $14.8 million in Q1 2024; Q2 2025 revenue: $16.8 million, down 8% YoY from $18.2 million in Q2 2024 but up 4% QoQ from Q1 2025.
Gross profit: Q1 2025 $5.2 million (+23% YoY); Q2 2025 $5.5 million (+2% YoY).
Gross margins: Q1 2025 32% (vs 29% in Q1 2024); Q2 2025 33% (vs 30% in Q2 2024).
EBITDA: Adjusted EBITDA losses of $0.6 million (Q1 2025) and $1.0 million (Q2 2025).
Net income: Q1 2025 net loss of $1.669 million; Q2 2025 net loss of $1.9 million; net margin approx. -10% to -11% range.
Financial Highlights
Revenue and margin trends:
- Q1 2025 revenue: $16.1 million, up 9% YoY from $14.8 million in Q1 2024; Q2 2025 revenue: $16.8 million, down 8% YoY from $18.2 million in Q2 2024 but up 4% QoQ from Q1 2025.
- Gross profit: Q1 2025 $5.2 million (+23% YoY); Q2 2025 $5.5 million (+2% YoY).
- Gross margins: Q1 2025 32% (vs 29% in Q1 2024); Q2 2025 33% (vs 30% in Q2 2024).
- EBITDA: Adjusted EBITDA losses of $0.6 million (Q1 2025) and $1.0 million (Q2 2025).
- Net income: Q1 2025 net loss of $1.669 million; Q2 2025 net loss of $1.9 million; net margin approx. -10% to -11% range.
- Backlog: Backlog at Sep 30, 2024 was $21.2 million; backlog as of Dec 31, 2024 was $17.5 million and $19.5 million as of Feb 28, 2025 (management cited a longer OEM lead-time backdrop).
- Cash flow and liquidity: Operating cash flow in Q1 2025 was $0.944 million; cash balance at Dec 31, 2024 was $0.9 million; net change in cash for the period was modestly negative (-$0.084 million); net debt stood at approximately $13.36 million at period end with total debt around $13.92 million.
- Balance sheet health: Current ratio 0.879x; quick ratio 0.377x; cash and equivalents $0.559 million; total current assets $26.85 million vs current liabilities $30.53 million; total liabilities $31.73 million; equity negative about -$1.13 million.
- Customer and product milestones: 25,000 Flux-powered packs deployed across North America; ongoing telematics and asset management capabilities (SkyBMS) with a Fortune 50 pilot; UL Type EE certification for S-series products; private-label OEM collaboration.
- Guidance cues: Q3 2025 revenue expected to be in line with Q2 (~$16 million) and Q4 2025 revenue expected to rise ~5-10% versus Q3; adjusted EBITDA targeted to breakeven to modest positive in Q4, depending on cost trajectory and mix.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
16.13M
-8.25%
4.37%
Gross Profit
5.22M
1.05%
4.70%
Operating Income
-1.21M
-230.87%
-22.03%
Net Income
-1.67M
-110.60%
-13.06%
EPS
-0.10
-83.33%
-10.00%
Key Financial Ratios
currentRatio
0.88
grossProfitMargin
32.4%
operatingProfitMargin
-7.52%
netProfitMargin
-10.4%
returnOnAssets
-5.45%
returnOnEquity
148%
debtEquityRatio
-12.34
operatingCashFlowPerShare
$0.06
freeCashFlowPerShare
$0.06
priceToBookRatio
-44.96
priceEarningsRatio
-7.6
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Themes from the earnings call and management Q&A:
- Strategy and leadership: Krishna Vanka emphasized the right technology at the right time with the right people to scale Flux into a market leader, signaling an inflection towards execution and growth (quote: our chief executive statement). Kelly Frey highlighted a renewed go-to-market focus, expanded sales force, and solution-selling approach to convert lithium adoption into durable revenue streams (quote: “we’ve expanded our sales force and introduced a solution selling framework”). Kevin Royal pointed to margin progress and the restatement remediation costs as ongoing headwinds but with a clear path to margin improvement (quote: gross margins expanded to 32-33% and restatement-related Opex).
- Backlog and demand signals: The company pointed to a constructive backlog trajectory with $19.5 million open orders as of Feb 28, 2025 and comments on improving order flow and a potential rebound in 2025, supported by product breadth (heavy-duty models) and a telematics-centric value proposition (quote: backlog and guidance on monetizing the $19.5 million backlog).
- Product and technology: SkyBMS telemetry and energy management software discussed as a strategic moat and recurring revenue opportunity; pilot deployments with a Fortune 50 company and a planned software launch in 2025. Management anticipates software to become a material revenue contributor over time (quote: SkyBMS pilot, and the recurring software opportunity).
- Economics and profitability: While gross margins expanded meaningfully, adjusted EBITDA remains negative due to restatement-related costs and higher SG&A tied to restatement and staff expansion; management communicated a path toward breakeven/positive EBITDA in Q4 if operating leverage from higher gross margins and cost controls take hold.
- Customer diversity and renewal: Management cited lack of lost customers and ongoing migration to lithium across large fleets, including medical suppliers and large wineries, underscoring durable demand in end markets.
“I can confidently say that we have the right technology at the right time with the right people to scale Flux Power into your market leader in this space.”
— Krishna Vanka
“We’ve achieved over 25,000 Flux-powered lithium-ion packs operating in North America... nearly 100% customer retention and increased OEM certifications.”
— Kelly Frey
Forward Guidance
Flux provided a near-term cadence for QQ3–QQ4 2025 that implies a stabilization of revenue and a the potential for adjusted EBITDA breakeven to modest profitability in Q4 if cost control and mix improvements hold. Key elements:
- Q3 2025 revenue guidance: expected to be in line with Q2 (~$16 million).
- Q4 2025 revenue guidance: projected to increase by 5–10% quarter over quarter relative to Q3, supported by backlog conversion, ongoing product introductions (heavy-duty models), and pricing actions.
- Margin trajectory: management highlighted continued gross margin expansion (33% in Q2 2025) driven by cost reductions and selective price increases; profitability depends on the pace of backlog realization and the normalization of SG&A after restatement-related costs.
- Cash flow: CFO indicated the objective of achieving breakeven to modestly positive cash flow in Q4 2025, contingent on revenue stability and working capital management.
- Key risk factors to monitor: duration and magnitude of macro headwinds (higher rates, economic uncertainty), the pace of order conversion from backlog, supplier lead times, and the ability to monetize SkyBMS software as a recurring revenue stream while maintaining margin expansion.
Overall: The company is transitioning from a restatement remediation phase to a growth phase anchored by backlog execution, product expansion (heavy-duty lines), and monetization of software/telemetry, with a path to profitability contingent on sustainable top-line growth and operating leverage.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
FLUX Focus
32.36%
-7.52%
1.48%
-7.60%
AEIS
37.20%
7.56%
2.01%
36.27%
EOSE
-2.35%
-5.06%
-1.61%
14.08%
ESP
26.80%
16.50%
3.76%
11.89%
HAYW
49.50%
14.60%
1.00%
51.76%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Flux Power is at a pivotal transition from restatement remediation to growth execution, with a backlog-backed revenue trajectory and a portfolio of product, technology, and customer win opportunities that could unlock a material software recurring revenue stream. Key positives include margin expansion to 32-33%, a growing dealer/OEM network, and the SkyBMS telemetry platform with a Fortune 50 pilot that could yield long-term software monetization. The near-term profitability hinge remains on stabilizing revenue, achieving cost discipline post-restatement, and converting backlog into realized revenue while expanding gross margins further. The company’s valuation will likely hinge on successful monetization of telemetry software, the scalability of heavy-duty product lines, and the ability to maintain a healthy cash flow profile as working capital normalizes. Investors should monitor: (1) Q3/Q4 revenue progression and backlog conversion, (2) actual EBITDA trajectory post-restatement normalization, (3) the rate and success of software revenue onboarding, and (4) the impact of OEM partnerships and UL certification on the addressable market. Overall, Flux presents potential upside if it can convert backlog momentum into recurring software revenue and achieve cash-flow breakeven to modest profitability in the near term.
Key Investment Factors
Growth Potential
Strategic product breadth (heavy-duty models), expanding telemetry-driven software and data analytics (SkyBMS) with potential recurring revenue; backlog execution (17.5–19.5m range) supports near-term revenue visibility; backlog monetization and new OEM partnerships (private-label program, UL EE certification) positioning Flux to capture larger fleet opportunities.
Profitability Risk
Near-term profitability depends on successful restatement remediation cost containment and achieving positive EBITDA; high working capital needs with current ratio below 1.0; elevated debt and modest cash balance; supply chain lead times and order lumpiness; customer concentration in certain fleets; macro headwinds (rates, economic uncertainty) could dampen ramp opportunities.
Financial Position
Liquidity constrained with cash at $0.56m and total debt of $13.92m; negative shareholder equity; improving gross margins (32-33%) but ongoing SG&A and restatement-related costs weigh on net income; access to credit facility with Gibraltar up to $20m subject to covenants; improving working capital metrics needed to sustain operations and fund growth.
SWOT Analysis
Strengths
Backlog strength with $19.5 million open orders as of Feb 28, 2025; 17.5 million as of Dec 31, 2024.
25,000 Flux-powered lithium-ion packs deployed across North America, Canada, and Mexico implying broad field validation.
Strong gross margin expansion (32-33% in Q1-Q2 2025) fueled by pricing actions and cost reductions.
Telematics and data analytics leadership via SkyBMS with a Fortune 50 pilot; potential recurring software revenue.
New leadership and expanded sales/engineering teams, including CRO and Senior Head of Engineering, enhancing growth execution.
Strategic OEM partnerships and UL EE certification for S-series, broadening the addressable market and product safety credentials.
No known lost customers and positive market reception to lithium transition across end markets.
Weaknesses
Current period net losses despite gross margin gains (Q1 net loss $1.669m; Q2 net loss $1.9m).
Restatement-related costs (~$1.2m in H1 2025) and severance expenses weighing on profitability.
Weak near-term liquidity: cash balance of $0.559m and negative equity position; current ratio <1.0.
Significant exposure to long lead times and lumpiness in orders, which complicates forecasting.
Opportunities
Recurring software revenue from SkyBMS telemetry and energy management solutions.
Expansion into heavy-duty models and adjacencies (private-label programs with major OEMs).
Growth in automotive/industrial fleets migrating to lithium, with supporting data analytics and AI-driven optimization (heat shaving, charging optimization).
Automation and integration opportunities in warehouses as automation adoption rises.