Flux Power Revenue Plunges 18% Amid Tariff Headwinds, Net Loss Widens

TL;DR

**FLUX is bleeding cash with plummeting revenue and widening losses; steer clear until they can navigate tariff impacts and reignite growth.**

AI Summary

Flux Power Holdings, Inc. (FLUX) reported a significant decline in revenue and an increased net loss for the quarter ended September 30, 2025. Revenues decreased by 18.2% to $13,175,000 from $16,125,000 in the prior year. This led to a gross profit reduction of 27.8% to $3,765,000 from $5,218,000. The net loss widened to $2,562,000, or $0.15 per share, compared to a net loss of $1,669,000, or $0.10 per share, in the same period last year. Operating expenses saw a slight decrease of 7.6% to $5,943,000, primarily due to reduced selling and administrative expenses by $209,000 and research and development by $278,000. The company's cash position improved to $1,588,000 from $1,334,000 at June 30, 2025, partly due to a private placement generating $3,227,000. However, accounts receivable decreased by $3,877,000, and inventories decreased by $1,499,000, indicating potential slowdowns in sales or inventory management efforts. The company faces ongoing risks from global tariff uncertainties, which are expected to negatively impact revenues, profitability, and cash flows, particularly concerning components imported from China.

Why It Matters

This 10-Q reveals Flux Power is struggling with declining sales and widening losses, which directly impacts investor confidence and the company's ability to fund future growth. The 18.2% revenue drop and increased net loss of $2.56 million signal a challenging competitive landscape and potential market saturation for their lithium-ion solutions, especially against larger, more resourced competitors. For employees, continued losses could lead to job insecurity or reduced investment in R&D. Customers might see price increases due to tariff impacts, while the broader market for industrial electrification could face slower adoption if key players like Flux Power falter.

Risk Assessment

Risk Level: high — The company's net loss increased by 53.5% to $2,562,000 from $1,669,000 year-over-year, and revenues declined by 18.2% to $13,175,000. Furthermore, the filing explicitly states that global tariff uncertainties are expected to negatively impact revenues, profitability, and cash flows, with a particular concern for materials and components from China.

Analyst Insight

Investors should exercise extreme caution and consider reducing exposure to FLUX given the significant revenue decline and widening net losses. Monitor the company's strategies to mitigate tariff impacts and their ability to secure new orders, as these are critical for a turnaround. Await evidence of improved financial performance before considering new investments.

Financial Highlights

revenue

$13,175,000

net Income

-$2,562,000

eps

-$0.15

gross Margin

28.6%

cash Position

$1,588,000

revenue Growth

-18.2%

Key Numbers

• $13,175,000 — Revenues for Q1 2026 (Decreased by 18.2% from $16,125,000 in Q1 2025)
• $2,562,000 — Net loss for Q1 2026 (Increased from $1,669,000 in Q1 2025)
• $0.15 — Net loss per share for Q1 2026 (Increased from $0.10 in Q1 2025)
• $3,765,000 — Gross profit for Q1 2026 (Decreased by 27.8% from $5,218,000 in Q1 2025)
• $1,588,000 — Cash at September 30, 2025 (Increased from $1,334,000 at June 30, 2025)
• $3,227,000 — Proceeds from private placement (Net of offering costs, contributed to cash flow from financing activities)
• $7,497,000 — Accounts receivable at September 30, 2025 (Decreased from $11,374,000 at June 30, 2025)
• $15,726,000 — Inventories, net at September 30, 2025 (Decreased from $17,231,000 at June 30, 2025)
• 21,340,135 — Common shares outstanding (As of November 10, 2025)
• $1,173,000 — Value of warrants issued for subordinated debt settlement (Non-cash financing activity)

Key Players & Entities

• Flux Power Holdings, Inc. (company) — Registrant
• Gibraltar Business Capital, LLC (company) — Credit facility provider
• Nasdaq Capital Market (regulator) — Stock exchange
• SEC (regulator) — Securities and Exchange Commission
• FASB (regulator) — Financial Accounting Standards Board
• China (country) — Source of imported materials subject to tariffs
• Nevada (state) — State of incorporation for Flux Power Holdings, Inc.
• California (state) — State of incorporation for Flux Power, Inc.

FAQ

Risk Factors

• Tariff Uncertainties and Global Trade Policy [high — market]: Increased tariffs on imported products, particularly from China, are expected to negatively impact FLUX's revenues, profitability, and cash flows. The company may need to increase selling prices to maintain profit margins. Escalation of tariffs could materially affect cost-effective sourcing from China.
• Supply Chain Disruptions [medium — operational]: Trade-related disruptions can create uncertainty and supply chain interruptions, leading to last-minute procurement efforts at elevated costs. The company is monitoring the fluid nature of proposed tariffs and their impact on operations.
• Customer Economic Strain [medium — financial]: If tariffs escalate or global inflation persists, customers may face greater economic strain, potentially affecting demand for FLUX's products. The company is focused on maintaining operational flexibility.

Industry Context

Flux Power Holdings operates in a sector influenced by global trade policies and supply chain dynamics. The increasing use of tariffs by governments worldwide creates an uncertain environment for companies relying on imported components. Competitors may face similar challenges in sourcing materials and managing costs, potentially leading to price adjustments across the industry.

Regulatory Implications

The U.S. government's increased tariffs on imported goods, particularly from China, present a significant regulatory challenge. FLUX must navigate these trade policies, which directly affect its cost structure and pricing strategies, and potentially comply with evolving trade regulations.

What Investors Should Do

1. Monitor tariff developments and their impact on FLUX's supply chain and cost of goods sold.
2. Analyze FLUX's ability to pass on increased costs to customers through price adjustments.
3. Evaluate the effectiveness of FLUX's supply chain adjustments and cost-reduction measures in mitigating tariff impacts.
4. Assess the company's cash burn rate and its reliance on financing activities like private placements to maintain liquidity.

Glossary

Tariffs

Taxes imposed by a government on imported goods and services. (Directly impacts FLUX's cost of goods sold and potentially its revenue and profitability due to imported components from China.)

Private Placement

A private offering of securities to a small group of accredited investors, rather than through a public offering. (FLUX raised $3,227,000 through a private placement, which contributed to an improved cash position.)

Subordinated Debt

Debt that ranks below other, more senior debt in the event of a liquidation or bankruptcy. (FLUX issued warrants valued at $1,173,000 for the settlement of subordinated debt, indicating a non-cash financing activity.)

Year-Over-Year Comparison

For the quarter ended September 30, 2025, Flux Power Holdings reported an 18.2% decrease in revenue to $13,175,000 and a widened net loss of $2,562,000, compared to the prior year. Gross profit declined by 27.8%, indicating margin pressure. While operating expenses saw a slight reduction, the overall financial performance deteriorated. The company's cash position improved due to a private placement, but significant decreases in accounts receivable and inventories suggest potential sales slowdowns or inventory management changes.

Key Financial Figures

• $0.001 — ch registered Common Stock, par value $0.001 per share FLUX Nasdaq Capital Mark

Filing Documents

• form10-q.htm (10-Q) — 852KB
• ex31-1.htm (EX-31.1) — 19KB
• ex31-2.htm (EX-31.2) — 18KB
• ex32-1.htm (EX-32.1) — 8KB
• ex32-2.htm (EX-32.2) — 8KB
• 0001493152-25-022356.txt ( ) — 5210KB
• flux-20250930.xsd (EX-101.SCH) — 38KB
• flux-20250930_cal.xml (EX-101.CAL) — 52KB
• flux-20250930_def.xml (EX-101.DEF) — 168KB
• flux-20250930_lab.xml (EX-101.LAB) — 414KB
• flux-20250930_pre.xml (EX-101.PRE) — 315KB
• form10-q_htm.xml (XML) — 640KB

- Financial Information

PART I - Financial Information ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 5 ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 26 ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 33 ITEM 4.

CONTROLS AND PROCEDURES

CONTROLS AND PROCEDURES 34

- Other Information

PART II - Other Information ITEM 1.

LEGAL PROCEEDINGS

LEGAL PROCEEDINGS 36 ITEM 1A.

RISK FACTORS

RISK FACTORS 38 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 39 ITEM 3. DEFAULTS UPON SENIOR SECURITIES 39 ITEM 4. MINE SAFETY DISCLOSURES 39 ITEM 5. OTHER INFORMATION 39 ITEM 6. EXHIBITS 39

SIGNATURES

SIGNATURES 40 Page 2 Table of Contents SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This report contains forward-looking statements. The forward-looking statements are contained principally in the sections entitled "Description of Business," "Risk Factors," and "Management's Discussion and Analysis of Financial Condition and Results of Operations." These statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to, the factors described in the section captioned "Risk Factors" below. In some cases, you can identify forward-looking statements by terms such as "anticipates," "believes," "could," "estimates," "expects," "intends," "may," "plans," "potential," "predicts," "projects," "should," "would," and similar expressions intended to identify forward-looking statements. Forward-looking statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. You should read these factors and the other cautionary factors materialize, or if any underlying assumptions prove incorrect, our actual results, performance or achievements may vary materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements. These forward-looking statements include, among other things, statements relating to:

Business

Business Trends and Uncertainties In 2025, the U.S. government increased certain existing tariffs and implemented new tariffs on imported products. In April 2025, the U.S. government increased import tariffs across a wide range of countries at various rates, including on product imports from almost all countries, and individualized higher tariffs on certain countries, notably China. Some of these tariff announcements have since been followed by announcements of limited exemptions and temporary pauses. Due to the uncertainties pertaining to tariffs and tariff levels, it is difficult for us to reliably forecast their ongoing impact to our business or that of our customers, but it is expected that tariffs would negatively impact our revenues, profitability and cash flows. Management is actively evaluating ways to mitigate potential impacts of tariffs. We import a portion of our raw materials and components from countries that are subject to import tariffs imposed by the U.S. government, in particular materials and components that are from China. We expect to be able to offset some of the impact of the enacted tariffs with supply chain adjustments, alternative manufacturing locations and cost reduction actions. However, at current and anticipated tariff levels, we will also need to increase the selling prices of our products to achieve an acceptable profit margin. In response to business uncertainties resulting from tariffs and increased tariff levels imposed by the U.S. government on goods imported into the U.S., we temporarily paused imports from our battery cell supplier in China. The pause was short-lived as both parties quickly agreed to modified terms. Currently, neither the pause in shipments nor the modified terms have materially affected the Company's operations. However, further escalation of tariffs between the U.S. and China could have a material effect on our ability to cost-effectively source from our supplier in China. Trade-related disruptions ca

View Full Filing

View this 10-Q filing on SEC EDGAR