Fly-E Group Reports 48.4% Revenue Decline and Increased Net Loss for Quarter Ended June 30, 2026

Fly-E Group, Inc. reported a significant decline in financial performance for the three months ended June 30, 2026, with revenues totaling $2.75 million, a decrease of 48.4% compared to $5.33 million in the same period last year. The company's gross profit also fell sharply to $299,864, down 86.7% from $2.26 million, resulting in a gross margin of 10.9%, compared to 42.4% in the prior year. The decline in revenue was primarily attributed to a reduction in retail sales due to the closure and sale of multiple retail stores, alongside increased competition that pressured pricing.

Operating expenses increased slightly to $3.84 million, up 1.9% from $3.77 million in the previous year. This increase was driven by higher general and administrative expenses, which rose by 37% to $3.35 million, largely due to increased development fees related to the company's ERP system and mobile applications. In contrast, selling expenses decreased significantly by 63.3% to $485,464, reflecting the reduced scale of operations following the closure of retail locations. The net loss for the quarter was $3.94 million, nearly double the loss of $2.01 million reported in the same quarter of 2025.

In terms of operational metrics, Fly-E Group's retail store count has been reduced from 36 to just 4, significantly impacting sales volume, which dropped from 10,448 units to 7,558 units year-over-year. The company has also streamlined its product offerings, focusing on E-motorcycles, E-bikes, and E-scooters, with a total of 27, 37, and 38 models available, respectively. The company continues to operate a rental service through its Go Fly mobile app, although rental revenue has also declined due to the reduced scale of operations.

Fly-E Group has been actively restructuring its business, having disposed of 28 subsidiaries to simplify its operational structure and improve financial reporting. As of June 30, 2026, the company reported working capital of approximately $8.1 million, with cash reserves dwindling to $60,281. The company is currently in default on a loan with Peapack-Gladstone Bank and is negotiating for an extension of repayment terms. Management has expressed substantial doubt about the company's ability to continue as a going concern, citing the need for additional financing to support operations and working capital requirements.

Looking ahead, Fly-E Group aims to alleviate its financial challenges through equity financing and other funding sources. The company is also focused on enhancing its product offerings and expanding its market presence, although it faces significant risks from competition, regulatory changes, and market conditions. The ongoing SEC investigation and various legal challenges, including a federal securities class action, add further uncertainty to the company's outlook.