Dragonfly Energy Holdings Corp ((DFLI)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Dragonfly Energy Holdings Corp recently held its earnings call, revealing a mixed sentiment. The company showcased strong revenue growth, particularly in the OEM segment, and improvements in gross profit and margin. Strategic advancements in technology and capital structure indicate potential for future growth. However, challenges persist in the DTC segment and heavy-duty trucking market, with the company still operating at a net loss and negative adjusted EBITDA.
Strong Revenue Growth
Net sales for Dragonfly Energy grew by 23% to $16.2 million, marking the third consecutive quarter of year-over-year revenue growth. This demonstrates the company’s ability to sustain its growth trajectory despite market challenges.
OEM Segment Success
The OEM segment saw a remarkable 50% increase in net sales year-over-year, reaching $10.1 million. This success is attributed to the strong adoption of integrated solutions, highlighting the company’s strategic focus on OEM partnerships.
Improved Gross Profit and Margin
Dragonfly Energy reported a 45.4% increase in gross profit, amounting to $4.6 million, with a gross margin improvement of 430 basis points to 28.3%. These figures reflect the company’s effective cost management and operational efficiency.
Patent Advancement
The company was granted a patent for its nonflammable all solid-state battery program, which enhances safety, thermal stability, and scalability. This advancement positions Dragonfly Energy as a leader in innovative battery technology.
Successful Capital Structure Simplification
Dragonfly Energy successfully exchanged its remaining preferred shares for common stock and completed a public offering, raising $5.5 million. This move strengthens the company’s financial flexibility and capital structure.
Innovation in OEM Partnerships
The development of integrated energy storage systems for Airstream and other OEMs showcases Dragonfly Energy’s engineering capabilities and commitment to innovation.
Decline in DTC Segment
Net sales in the DTC segment declined to $5.9 million from $6.5 million, attributed to ongoing macroeconomic uncertainty. This highlights the challenges faced in the consumer market.
Heavy-Duty Trucking Challenges
The heavy-duty trucking market remains challenging, with delays in revenue impact from pilot programs due to tariff increases and freight market uncertainty.
Ongoing Net Loss
Dragonfly Energy reported a net loss of $7.0 million, or $0.58 per share, which is an improvement from the previous year’s net loss of $13.6 million or $2.02 per share.
Adjusted EBITDA Still Negative
While adjusted EBITDA improved, it remained negative at $2.2 million compared to negative $6.2 million, indicating the company is still working towards profitability.
Forward-Looking Guidance
CEO Denis Phares reported a robust 23% year-over-year increase in net sales, driven by OEM partnerships. Despite challenges in the DTC segment, the company achieved significant gross profit and margin improvements. Operating expenses decreased, contributing to a reduced net loss. Dragonfly Energy anticipates Q3 net sales of $15.9 million, aiming for continued growth and progress towards profitability. Strategic initiatives include domestic manufacturing advantages, patent advancements, and expansion into the heavy-duty trucking market.
In summary, Dragonfly Energy Holdings Corp’s earnings call reflected a positive outlook with strong revenue growth and strategic advancements, despite challenges in certain segments. The company is focused on leveraging its technological innovations and partnerships to drive future growth and move towards profitability.