Flux Power Holdings Reports 61% Revenue Decline and Increased Net Loss in Latest Quarter

Flux Power Holdings, Inc. reported significant financial challenges in its latest 10-Q filing for the quarter ending March 31, 2026. The company generated revenues of $6.6 million for the quarter, a substantial decrease of 61% compared to $16.7 million in the same period last year. For the nine months ending March 31, 2026, revenues totaled $33.9 million, down 32% from $49.7 million in the prior year. The company also reported a net loss of $3.2 million for the quarter, compared to a loss of $1.9 million in the previous year, and a net loss of $5.1 million for the nine-month period, slightly improved from a loss of $5.5 million in the same period last year.

The decline in revenue was attributed to reduced capital spending by major customers, particularly in the material handling sector, which has been affected by economic uncertainties and increased competition. The company noted that its largest customer significantly cut its capital expense budget, contributing to the downturn. Additionally, Flux Power faced pricing pressures due to rising costs from tariffs, which have negatively impacted both revenues and profitability. The gross profit margin for the quarter was 27%, down from 32% a year earlier, primarily due to increased costs associated with excess and obsolete inventory and warranty expenses.

In terms of operational developments, Flux Power has been actively working to improve its supply chain and vendor strategies to mitigate the impact of tariffs and enhance profitability. The company has implemented cost reduction measures, including reductions in labor and overhead costs, and has increased selling prices for its energy storage solutions. Despite these efforts, the company reported a backlog of approximately $5.3 million as of March 31, 2026, reflecting a decrease in new orders and shipments compared to previous quarters.

Flux Power's financial condition remains precarious, with an accumulated deficit of $111.5 million as of March 31, 2026. The company had a cash balance of $372,000 and $10.3 million available under its credit facility with Gibraltar Business Capital, subject to borrowing base limitations. However, the company is currently in default of its minimum EBITDA financial covenant under this facility, which raises substantial doubt about its ability to continue as a going concern. Management is in negotiations with GBC to amend the credit facility or obtain a waiver, but there are no assurances that these efforts will be successful.

Looking ahead, Flux Power's management remains focused on navigating the challenges posed by economic uncertainties and tariff impacts while seeking to expand its customer base and product offerings. The company is also exploring additional funding sources to support its operations and growth initiatives. However, the ongoing volatility in market conditions and the potential for further tariff escalations could continue to affect demand for its products and overall financial performance.