Dragonfly Energy (DFLI) Q2 2024 earnings summary

Executive summary

• Secured a $30 million global licensing agreement for Battle Born Batteries with Stryten Energy, including a $5 million upfront payment expected in Q3 2024 and additional royalty revenue streams.

• Expanded into medium and heavy-duty trucking, partnering with Highway Transport for a 500+ truck fleet conversion and broadening distribution through Daimler Truck CTS, Rush Enterprises, and Fontaine Modification.

• Strengthened RV market presence via partnerships with Fraserway RV and Meyer Distributing, and leveraged Meyer’s network to reach new B2B customers.

• Progressed R&D on dry electrode cell production and advanced government funding negotiations for a new manufacturing facility.

• Hosted high-profile government officials and launched sustainability initiatives, including tree planting and emission-reducing solutions.

Financial highlights

• Q2 2024 net sales were $13.2 million, down 31.6% year-over-year from $19.3 million.

• Gross profit was $3.2 million (24% margin), down from $3.9 million (20.4% margin) in Q2 2023.

• Operating expenses decreased to $9.9 million from $12.5 million year-over-year.

• Net loss was $13.6 million ($0.22/share), compared to $11.9 million ($0.25/share) in Q2 2023.

• Adjusted EBITDA was $(6.2) million, compared to $(5.7) million in Q2 2023.

Outlook and guidance

• Q3 2024 net sales expected between $13.5 million and $15 million; gross margin guidance is 24%-26%.

• Operating expenses for Q3 2024 anticipated at $10 million-$10.5 million.

• $5 million upfront payment from Stryten Energy expected in Q3 2024, with further licensing revenue based on unit volume.

• Majority of new revenue streams from Stryten, trucking, and oil & gas expected to ramp in Q4 2024.

• Management anticipates needing to raise additional funds through equity or debt to support ongoing operations and growth.