Polar Power Reports 42% Revenue Decline in Q2 2025, Net Loss of $271,000

Polar Power, Inc. reported a significant decline in financial performance for the second quarter of 2025, with net sales of $2.7 million, a 42% decrease from $4.7 million in the same period of 2024. For the first half of 2025, the company recorded net sales of $4.4 million, down 31% from $6.4 million year-over-year. The decrease in revenue was primarily attributed to reduced sales of DC generators to telecommunications customers, exacerbated by excess inventory at a major customer’s warehouse and broader economic and geopolitical factors affecting purchasing decisions.

The company's gross profit for the second quarter fell to $930,000, a 49% decline compared to $1.8 million in the prior year. The gross profit margin also decreased from 39.3% to 34.3%, reflecting increased factory overhead absorption. Operating expenses for the quarter decreased to $1 million from $1.4 million, driven by reductions in sales and marketing, research and development, and general administrative expenses. Despite these reductions, Polar Power reported a net loss of $271,000 for the quarter, compared to a profit of $501,000 in the same period last year.

In terms of operational developments, Polar Power's sales backlog as of June 30, 2025, stood at $1.2 million, with 95% attributed to telecommunications customers. The company continues to focus on diversifying its customer base and expanding into non-telecommunications markets, including military and electric vehicle charging sectors. The company has also launched new products, including prime power DC generators optimized for propane and natural gas, which are expected to drive future growth.

The company’s financial position showed a decrease in total assets to $16.5 million from $17.5 million at the end of 2024, with current liabilities increasing to $9.5 million from $8.6 million. Cash and cash equivalents fell to $175,000 from $498,000, raising concerns about liquidity. Polar Power's management has expressed substantial doubt about the company's ability to continue as a going concern, emphasizing the need for additional financing and operational improvements to achieve profitability.

Looking ahead, Polar Power plans to hire additional sales and marketing staff to enhance its global outreach and customer base. The company aims to mitigate the financial impacts of rising costs and supply chain challenges while continuing to develop its product offerings. Management remains optimistic about the long-term potential of its markets, particularly in telecommunications and renewable energy applications, despite the current challenges.