Dragonfly Energy (NASDAQ:DFLI) reported third-quarter sales below its forecast as weak recreational vehicle demand offset growth in its heavy-duty trucking business. The company expects trucking revenue to nearly double sequentially in the fourth quarter and adjusted EBITDA to reach approximately break-even.
Net sales fell to $12.2 million from $16 million a year earlier, missing the company’s guidance of approximately $13.5 million. Chairman, President and CEO Denis Phares attributed the shortfall to lower original equipment manufacturer volumes and continued softness in direct-to-consumer sales.
Trucking revenue rose to $1.3 million from approximately $0.5 million in the second quarter. Phares said some fleets placed orders for commercial deployment without first conducting a pilot, a change the company believes could shorten its sales cycle.
Trucking Growth and 2027 Discussions
Chief Commercial Officer Wade Seaburg said third-quarter trucking growth was driven primarily by shipments under a Stevens Transport purchase order and initial deliveries against Werner Enterprises’ first production order. Dragonfly also made initial deliveries to several other fleets.
Stevens, which has hundreds of trucks equipped with Dragonfly systems, reported approximately 4% lower diesel consumption compared with trucks using traditional diesel-powered auxiliary power units, Seaburg said. The fleet also reported reductions in maintenance requirements and downtime.
Based on internal fleet modeling, Seaburg said Dragonfly’s DualFlow Power Pack can pay for itself in approximately four months at current diesel prices, with comparable payback for its all-electric auxiliary power unit.
The company expects fourth-quarter trucking growth to come from expanded deliveries to Stevens and Werner as well as orders from new customers. Seaburg said Dragonfly is beginning to receive commitments for 2027 truck builds and is discussing deployments with larger fleets, including potential orders covering hundreds or thousands of trucks.
RV Weakness Weighs on Results
Dragonfly’s OEM net sales were $7.1 million in the third quarter, while direct-to-consumer sales were $4.8 million. Phares said declines primarily reflected lower RV volumes and soft consumer demand. Seaburg noted that RV Industry Association data showed wholesale shipments down 13.7% year to date through September.
The company continues to focus on premium RV manufacturers, including Airstream, Ember RV and Awaken RV, which have made its Battle Born batteries standard across select product lines, Seaburg said.
Gross profit fell to $3.3 million from $4.7 million, and gross margin declined to 27% from 29.7%. Operating expenses dropped to $7.3 million from $8.5 million. Dragonfly reported a net loss attributable to common shareholders of $6.7 million, or $3.71 per diluted share, compared with a loss of $11.1 million, or $16.45 per diluted share, a year earlier.
Adjusted EBITDA was negative $2.3 million, compared with negative $2.1 million a year earlier, but exceeded the company’s guidance for negative $2.4 million. Phares attributed the result to progress on reducing costs.
Outlook and Dakota Lithium Integration
For the fourth quarter, Dragonfly forecast approximately $12.5 million in net sales and approximately break-even adjusted EBITDA. The outlook includes continued cost reductions and the anticipated benefit of tariff-related refunds, while RV demand is expected to remain soft.
Phares said the company has consolidated operating rental space and resized operations. In response to an analyst’s question about the balance sheet, he said Dragonfly continues to manage cash tightly, pursue sources of capital such as grants and funding from the Nevada Tech Hub, and look for opportunities to raise capital.
Dragonfly completed its acquisition of the Dakota Lithium brand and associated assets at the end of July. Phares said the company is rebuilding inventory, reconnecting with dealers and distributors, and strengthening Dakota’s e-commerce and marketing capabilities. New inventory is expected to begin arriving toward the end of the fourth quarter, with broader availability and a more meaningful revenue contribution starting in the first quarter of 2027.
Phares said the company expects Dakota to be accretive to adjusted EBITDA because it can use Dragonfly’s existing infrastructure with minimal additional overhead. He also said upgrades supported by Tech Hub funding are helping the company maintain its dry-electrode and solid-state research programs, which remain at pilot scale.
About Dragonfly Energy (NASDAQ:DFLI)
Dragonfly Energy Holdings Corp. develops and manufactures lithium-ion battery systems and energy-storage technologies. Through its Battle Born Batteries brand, the company offers batteries and related power solutions designed for recreational vehicles, marine applications, off-grid systems, and other mobile and stationary energy-storage uses. The company is also developing solid-state battery technology based on a dry powder coating manufacturing process. Dragonfly Energy’s technology is intended to support the production of safer, more efficient, and scalable energy-storage systems while reducing reliance on conventional liquid electrolyte designs.
