Flux Power (FLUX) investor relations material

Executive summary

• Revenue for Q3 2026 was $6.6 million, down over 60% year-over-year, mainly due to a major customer's capital freeze, delayed orders, increased competition, and tariff-driven pricing pressures.

• Operating expenses decreased 30% year-over-year due to targeted headcount reductions and efficiency measures.

• Net loss widened to $3.2 million ($0.15/share), compared to $1.9 million ($0.12/share) in the prior year, driven by lower gross profit, partially offset by reduced expenses.

• Adjusted EBITDA was negative $2.5 million, versus negative $0.5 million a year ago.

• New marketing initiatives, expanded OEM partnerships, and a focus on digital strategy and lead generation are underway.

Financial highlights

• Q3 2026 revenue was $6.6 million, down from $16.7 million in Q3 2025.

• Gross margin was 27.3%, compared to 32% in the prior year period.

• Operating expenses were $4.8 million, down from $6.9 million year-over-year.

• Net loss was $3.2 million, with a net loss margin of (48)% for the quarter.

• Cash and cash equivalents at quarter-end were $0.4 million, down from $1.3 million at FY2025 year-end.

Outlook and guidance

• Sequential revenue growth of approximately 20% is expected in Q4 2026, with positive order activity trends and increased OEM volume commitments anticipated to drive growth into Q1 2027.

• Margin improvement initiatives and supply chain optimizations are expected to enhance profitability.

• Management expects continued challenges from tariffs, supply chain disruptions, and customer capital spending deferrals.

• Substantial doubt exists about the ability to continue as a going concern over the next 12 months due to liquidity constraints and a credit facility covenant breach.

• The company is seeking to renegotiate its credit facility and evaluating additional capital sources.