Executive Summary
Flux Power reported 3Q25 revenue of $16.7 million, up 15.8% year over year, supported by stronger demand in material handling and ground support equipment (GSE) markets. Gross profit rose 32.5% to $5.3 million, lifting gross margin to 32.0% from 28.0% a year earlier, driven by lower warranty costs though offset by higher material costs. The quarter delivered an improved operating loss and net loss of $1.9 million, vs. a year-ago loss of $3.0 million, with Adjusted EBITDA at a negative $1.1 million (vs. negative $1.7 million in 3Q24). Despite top-line progress, Flux remains cash-flow negative and leverages a tight liquidity position, ending the quarter with roughly $0.5 million in cash and a $16 million credit facility plus a $1 million subordinated line of credit, subject to covenants. Management articulated a clear strategy to evolve Flux from a battery manufacturer to a software-enabled energy solutions provider, anchored by five initiatives (profitable growth, operational efficiencies, solution selling, right products, and software/recurring revenue). Key product developments include the G96 high-power platform for airport GSE and the Sky EMS software/IoT ecosystem, with Sky EMS already in pilots and a plan to cloud-connect every battery shipped. Tariff headwinds and supply-chain diversification remain near-term risks, but Flux expects improved margins and longer-term recurring revenue through software, data-driven services, and higher-value hardware offerings. The Q3 results underscore Flux’s pivot toward higher-margin, software-enabled solutions and domestic manufacturing resilience, while highlighting the near-term cash and liquidity challenges that require ongoing attention from investors.
Key Performance Indicators
Key Insights
Revenue: $16.742 million, YoY +15.81%, QoQ -0.52%. Gross Profit: $5.287 million, YoY +31.35%, QoQ -3.22%. Gross Margin: 31.58% (approx. 32%). Operating Income: -$1.578 million, YoY +38.69%, QoQ -6.63%. Net Income: -$1.939 million, YoY +35.47%, QoQ -2.76%. Earnings per Share (diluted): -$0.12, YoY +33.33%, QoQ -9.09%. EBITDA: -$1.329 million. EBITDA Margin: -7.94% (approx.). Gross Profit Margin: 31.6%. Operating Margin: -9.42%. Net Margin: -11.58%. Free Cash Flow: -$1.747 million. Cash at end of ...
Financial Highlights
Revenue: $16.742 million, YoY +15.81%, QoQ -0.52%. Gross Profit: $5.287 million, YoY +31.35%, QoQ -3.22%. Gross Margin: 31.58% (approx. 32%). Operating Income: -$1.578 million, YoY +38.69%, QoQ -6.63%. Net Income: -$1.939 million, YoY +35.47%, QoQ -2.76%. Earnings per Share (diluted): -$0.12, YoY +33.33%, QoQ -9.09%. EBITDA: -$1.329 million. EBITDA Margin: -7.94% (approx.). Gross Profit Margin: 31.6%. Operating Margin: -9.42%. Net Margin: -11.58%. Free Cash Flow: -$1.747 million. Cash at end of period: $0.505 million. Total debt: $13.668 million; Net debt: $13.163 million. Current ratio: 0.80; Quick ratio: 0.32; Cash ratio: 0.0148. Days Sales Outstanding: 52.93; Days Inventory Outstanding: 129.11; Days Payables Outstanding: 115.84; Cash Conversion Cycle: 66.20 days. Revenue growth drivers include higher demand in material handling and GSE markets with unit growth of 10% and 25%, respectively. Management notes progress toward a 40%+ gross margin target via product cost reductions and warranty management, offset by higher material costs.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
16.74M |
15.81% |
-0.52% |
| Gross Profit |
5.29M |
31.35% |
-3.22% |
| Operating Income |
-1.58M |
38.69% |
-6.63% |
| Net Income |
-1.94M |
35.47% |
-2.76% |
| EPS |
-0.12 |
33.33% |
-9.09% |
Key Financial Ratios
operatingProfitMargin
-9.42%
operatingCashFlowPerShare
$-0.09
freeCashFlowPerShare
$-0.11
Management Commentary
Key themes from the earnings call and management discussion include: 1) Strategic pivot to software-enabled energy solutions, anchored by Sky EMS, and a clear five-part initiative framework (profitable growth, operational efficiencies, solution selling, right products, software/recurring revenue). 2) G96 and higher-voltage platforms expand Flux’s addressed markets beyond traditional Li-ion batteries, targeting high-energy-demand GSE and potential new verticals, with Sky EMS pilots underpinning a broader recurring-revenue model. 3) Tariff exposure and supply-chain reconfiguration are central near-term headwinds; Flux is accelerating supplier diversification, domestic US assembly plans, and tariff-resistant design to preserve margins. 4) Management emphasizes a data-driven, cloud-connected battery ecosystem intended to reduce maintenance visits and unlock predictive maintenance and recycling workflows, positioning Flux as a tech-forward provider in a traditionally hardware-centric market.
"With the launch of the G96 solution, the platform is advancing the electrification of airline drone support equipment by addressing growing demands for higher power, greater intelligence, and sustainable operation. This product is helping us further expand our portfolio to support high energy demand pushback tractors, positioning Flux Power Holdings, Inc. as a technology leader in the shift to clean high-performance GSE electrification."
— Krishna Vanka
"There's the biggest thing that we've seen is that the market for lead-acid batteries, which is the first step towards electrification, very much is a commoditized product because it's not a very intelligent product if you will. When someone moves to lithium, you have an opportunity to take that data and use it to really fit into a larger solution that the client is trying to solve... basically a software company that happens to have very good batteries."
— Kelly Frey
Forward Guidance
Flux’s forward view centers on achieving consistent quarterly profitable results while scaling, with a stated near-term gross-margin target of 40% or higher via cost reductions and warranty improvements. The company plans to scale software and recurring revenue through Sky EMS, expand the high-power G96 platform for airline GSE, and accelerate US-based manufacturing to reduce tariff exposure and logistics costs. Management also signals continued investment in R&D for tariff-resistant chemistries and API integrations to strengthen the Sky EMS ecosystem. Risks to the outlook include ongoing tariff volatility, potential delays in customer capex cycles, and working-capital constraints given negative equity and limited liquidity. Investors should monitor: (1) progression toward 40% gross margin, (2) Sky EMS ARR or subscription metrics and number of cloud-connected batteries, (3) uptake of G96 in target markets and cross-sell opportunities, (4) progress on US domestic assembly and supplier diversification, and (5) covenant compliance and available liquidity under the Gibraltar/Cleveland credit facilities.