Fly-E Group Reports 53.3% Revenue Decline and Increased Net Loss in Latest Quarter

Fly-E Group, Inc. reported significant financial challenges in its latest 10-Q filing for the quarter ending December 31, 2025. The company recorded revenues of $2.65 million, a decrease of 53.3% compared to $5.68 million in the same quarter of the previous year. For the nine months ending December 31, 2025, revenues totaled $11.89 million, down 41.7% from $20.38 million in the prior year. The decline in revenue was attributed primarily to a substantial drop in the number of electric vehicles sold, which fell by 87%, alongside price reductions aimed at clearing aged inventory.

The company's gross profit for the quarter was $1.05 million, down 59.1% from $2.56 million a year earlier, resulting in a gross margin of 39.6%, compared to 45.1% in the previous year. Operating expenses also decreased to $2.61 million from $3.50 million, largely due to reduced selling expenses following the closure and sale of several retail stores. However, general and administrative expenses increased by 20.3% to $1.87 million, reflecting higher legal and professional fees associated with ongoing litigation and compliance obligations. The net loss for the quarter was $1.92 million, a significant increase from a loss of $684,487 in the same period last year.

In terms of operational developments, Fly-E Group has been restructuring its business by selling off non-core subsidiaries to streamline operations. During the nine months ended December 31, 2025, the company disposed of 19 subsidiaries, generating approximately $0.9 million in cash. As of December 31, 2025, the company operated six retail stores in the U.S., down from eight, and has plans to continue reducing its retail footprint to enhance operational efficiency.

The company’s liquidity position remains precarious, with cash reserves of $295,674 and working capital of approximately $13.4 million as of December 31, 2025. The company has faced challenges in meeting its loan obligations, particularly with Peapack-Gladstone Bank, where it defaulted on repayments. A forbearance agreement was reached to extend the repayment deadline to March 31, 2026. Management has expressed substantial doubt about the company's ability to continue as a going concern, citing the need for additional equity financing and other sources of funding to support operations.

Looking ahead, Fly-E Group aims to improve its financial performance through strategic initiatives, including enhancing its product offerings and expanding its rental services. The company is also focused on developing a mobile application to facilitate customer engagement and streamline operations. However, the ongoing litigation and market conditions, including increased competition and regulatory challenges, pose significant risks to achieving these objectives.