Flux Power Holdings Reports Strong Growth Amid Challenges

Flux Power Holdings ((FLUX)) has held its Q3 earnings call. Read on for the main highlights of the call.

The latest earnings call from Flux Power Holdings painted a largely positive picture, highlighting strong revenue growth, improved gross margins, and successful product launches. Despite facing challenges such as tariff impacts and increased administrative costs, the company expressed confidence in its ability to leverage competitive advantages and continue its growth trajectory.

Revenue and Gross Margin Growth

Flux Power Holdings reported a significant increase in revenue for the third fiscal quarter, reaching $16.7 million, a 16% rise from the previous year’s $14.5 million. The gross profit also saw a substantial increase of 32.5%, climbing to $5.3 million from $4 million in the same period last year. This resulted in an improved gross margin of 32%, up from 28%.

Product Innovation and Strategic Initiatives

The company has made strides in product innovation, launching the G96 battery solution, which advances electrification in the airline drone support equipment market. Additionally, the Sky EMS platform is being expanded to support the full life cycle management of intelligent batteries, with plans to connect all batteries to the cloud.

Improved Financial Position

Flux Power Holdings has improved its financial position, reducing its adjusted EBITDA loss to $1.1 million in the third fiscal quarter of 2025, down from $1.7 million in the same quarter of 2024. The net loss also decreased to $1.9 million from $3 million the previous year.

Positive Customer Feedback and Market Position

The company has received positive feedback from customers, with increased demand in the material handling and ground support equipment markets, showing unit growth of 10% and 25%, respectively. Flux Power Holdings is perceived to have a competitive advantage due to its lower exposure to tariffs compared to competitors.

Tariff Challenges

Geopolitical complexities and new tariffs are impacting the global supply chain, presenting challenges for the company. Flux Power Holdings is adapting by evaluating new suppliers and focusing on supplier diversification to mitigate these issues.

Increased Selling and Administrative Expenses

Selling and administrative expenses rose to $5.7 million in the third fiscal quarter of 2025 from $5.3 million the previous year. This increase is partly attributed to professional fees related to the restatement of financial statements.

Cash Position

The company’s cash position decreased to $500,000 as of March 31, 2025, compared to $600,000 on June 30, 2024. However, Flux Power Holdings maintains available working capital through credit facilities.

Forward-Looking Guidance

Flux Power Holdings provided forward-looking guidance focused on five strategic initiatives to drive growth and efficiency. The company aims for “profitable growth” and consistent quarterly profitability, with a focus on optimizing supply chain and internal processes to reduce costs. The “solution selling” strategy is transforming sales processes to better align with customer needs. Product innovation remains a priority, with the G96 solution playing a key role. The “software and recurring revenue” initiative is advancing with the Sky EMS platform, central to their recurring revenue strategy and intelligent battery management.

In conclusion, Flux Power Holdings’ earnings call reflected a positive outlook with strong financial performance and strategic initiatives aimed at sustaining growth. Despite challenges such as tariffs and increased expenses, the company is well-positioned to capitalize on its competitive advantages and continue its upward trajectory.