Flux Power (NASDAQ:FLUX) reported fiscal first-quarter 2027 revenue of $6.8 million, down from $8.2 million in the preceding quarter and $13.2 million a year earlier, as lower spending from a key customer and broader economic conditions weighed on order activity.
Chief Financial Officer Kevin Royal said higher interest rates and fuel prices affected customers’ purchasing patterns during the quarter. The company recorded a net loss of $3.2 million, or $0.15 per share, compared with a $2.3 million loss, or $0.11 per share, in the prior quarter. The loss was also higher than the $2.6 million, or $0.15 per share, reported in the year-earlier period.
Margins Decline as Volume and Product Mix Shift
Gross margin was 24.8% in the fiscal first quarter, compared with 27.4% in the prior quarter and 28.6% in the first quarter of fiscal 2026. Royal attributed the decline to product mix, reduced operating leverage at lower production volumes, higher unabsorbed labor and overhead, and increased warranty expense as a percentage of revenue.
Operating expenses totaled $4.6 million, rising from $4.4 million sequentially but declining from $5.9 million a year earlier. Royal said the year-over-year reduction reflected prior headcount cuts and efforts to streamline the operating model.
On a non-GAAP basis, excluding stock-based compensation, Flux Power reported a net loss of $3 million, or $0.14 per share. Adjusted EBITDA was negative $2.6 million, compared with negative $1.6 million in the preceding quarter and negative $1.7 million a year earlier.
Company Forecasts Sequential Revenue Growth
Flux Power expects fiscal second-quarter revenue of $7 million to $8 million and fiscal third-quarter revenue of $9 million to $10 million. Royal said the outlook is derived from a bottoms-up sales forecast that incorporates customer discussions and probability assessments across the company’s pipeline.
He said opportunities included in the second- and third-quarter outlook carry a “very high level of probability” of closing, while the projected mix includes both existing and new customers.
CEO Krishna Vanka said a significant customer that had paused orders for several quarters placed an order through an original equipment manufacturer, or OEM, during the first quarter. Flux Power had not forecast the business from that customer until the first quarter of calendar 2027, according to Vanka.
Vanka said the order provides confidence that the customer intends to resume working with Flux Power, though he said the company does not yet know the magnitude or regularity of future orders. The company also received 25 orders through OEM partners from first-time Flux Power customers, representing about $750,000 in new revenue.
OEM, Dealer and White-Label Efforts Expand
Management highlighted efforts to broaden the company’s sales channels through OEMs, dealers and direct enterprise outreach. Vanka said three large OEM programs are progressing, with one OEM preparing for formal testing that could lead to certification, another placing Flux Power batteries into an accelerated test cycle, and Hyster-Yale dealer-network activity expanding.
The company expects orders from the first two OEM programs to begin arriving toward the latter part of its fiscal year, Vanka said during the question-and-answer session. Flux Power is also pursuing white-label programs, with five OEMs evaluating such arrangements and two major dealers exploring white-label partnerships.
In addition, Flux Power’s S8 product was added to one leading OEM partner’s dealer customer relationship management system. Vanka said the company expects that move to generate approximately $1 million in new business over the next two quarters.
The company is also targeting the 500 largest end-user accounts in North America through a campaign led by its new vice president of sales. Vanka said the program is intended to supplement, rather than compete with, dealer and OEM relationships, and is expected to contribute more meaningfully in the second half of the fiscal year.
Supply Chain, Product Initiatives and Liquidity
Vanka said Flux Power is pursuing supply-chain changes intended to combine key components into more integrated assemblies, reducing the number of individual components and potentially improving purchasing scale. He said the approach is designed to support higher-volume production at lower cost per unit while maintaining the company’s engineering, design and quality standards.
Management said it believes the strategy could help offset lower margins associated with OEM business through greater volume and supply-chain efficiencies. Royal said Flux Power’s current organization is largely sized to support annual revenue of up to $60 million, although the company may need to add three to five personnel as growth resumes.
Flux Power also announced integrated gas detection for airport ground-support-equipment batteries, developed with a major airline. Initial airline shipments are expected in the first quarter of calendar 2027, and the company plans to offer a retrofit program for batteries already in the field.
The company also began shipments of SkyVOX, a product that adds battery location and charging alerts to its SkyEMS fleet intelligence platform. Separately, Vanka said a global technology-platform customer continues field testing robots powered by Flux Power’s C48 batteries, with production-level orders anticipated next year.
Flux Power ended the quarter with $0.4 million in cash and cash equivalents, compared with $0.3 million at the end of the prior quarter. Royal said the company is evaluating financing alternatives and strategic partnerships. He added that a recently filed Form 8-K disclosed that Flux Power’s lending partner requires it to raise at least $4 million in net capital.
Royal said the company has a plan to raise capital and intends to use its committed equity facility as part of that effort.
About Flux Power (NASDAQ:FLUX)
Flux Power Holdings, Inc develops, manufactures and sells lithium-ion battery systems for commercial and industrial applications. The company focuses primarily on energy solutions for material-handling equipment, including electric forklifts, pallet jacks, reach trucks and other warehouse vehicles.
Its product portfolio includes modular lithium-ion battery packs, battery-management systems, chargers and related software and monitoring capabilities. These systems are designed to support fleet electrification, improve energy efficiency and reduce the maintenance requirements associated with traditional lead-acid batteries.
Flux Power serves customers in the material-handling, warehousing, distribution, manufacturing and airport ground-support markets.
