Flux Power Holdings Reports 18% Revenue Decline and Increased Net Loss in Q1 FY 2026

Flux Power Holdings, Inc. reported a decline in financial performance for the first quarter of fiscal year 2026, ending September 30, 2025. The company generated revenues of $13.2 million, a decrease of 18% from $16.1 million in the same period last year. This decline was attributed to a shift in sales mix towards lower-priced products in the material handling market and reduced volumes in the ground support equipment sector. The cost of sales also increased to $9.4 million, representing 71% of revenue, compared to 68% in the prior year, primarily due to higher inventory costs linked to import tariffs.

The company's net loss for the quarter was $2.6 million, compared to a loss of $1.7 million in the previous year. This increase in net loss was driven by the reduced gross profit, which fell to $3.8 million, or 29% of revenue, down from 32% a year earlier. Operating expenses decreased to $5.9 million from $6.4 million, reflecting lower professional fees and reduced research and development costs. However, the overall financial results indicate ongoing challenges in achieving profitability.

In terms of operational developments, Flux Power's backlog as of September 30, 2025, was approximately $5.7 million, down from $9.9 million at the end of the previous quarter. The decrease in backlog was influenced by customer deferrals of new orders due to economic uncertainties and higher capital spending concerns. The company has been actively working to expand its vendor strategy and optimize its supply chain to mitigate the impact of tariffs and improve profitability.

Strategically, Flux Power completed a private placement of prefunded preferred stock warrants and common stock warrants, raising approximately $3.2 million in cash proceeds. Additionally, the company successfully executed a public offering in November 2025, generating approximately $9.2 million in net proceeds. These funds are expected to support the company's operations and growth initiatives over the next 12 months. Management remains focused on enhancing product offerings and expanding customer relationships, particularly in the material handling sector, which is viewed as a significant growth opportunity.

Looking ahead, Flux Power faces challenges related to global tariff uncertainties and their potential impact on revenue and profitability. The company is evaluating strategies to improve its financial position, including planned price increases for its energy storage solutions and cost-saving initiatives. Management is optimistic that the recent capital raises will provide the necessary resources to navigate these challenges and support long-term growth objectives.