Breaking Down Flux Power Holdings, Inc. (FLUX) Financial Health: Key Insights for Investors

You're looking at Flux Power Holdings, Inc. (FLUX) and wondering if the operational improvements are finally translating into a viable investment thesis, and honestly, the latest numbers show a company at a critical inflection point. For the full fiscal year 2025, the company delivered $66.4 million in revenue, a 9% jump year-over-year, but the real story is the margin expansion: the gross margin climbed to 32.7% from 28.3% a year ago, reflecting better cost management and a higher-value product mix. Still, the GAAP net loss for the year was $6.7 million, so they're not out of the woods yet, but the fourth quarter showed a significant win with adjusted EBITDA turning positive to $600,000, a major turnaround from the prior year's loss. Plus, the $5 million capital raise post-quarter helps shore up what was a tight cash position of just $1.3 million as of June 30, 2025, giving them a much-needed buffer against the macroeconomic uncertainty and tariff risks management flagged. This is a classic growth-to-profitability transition play, and we need to see if the recent $3.2 million in new airline orders can keep that momentum going.

Revenue Analysis

You want to know where Flux Power Holdings, Inc. (FLUX) is actually making its money, and the simple answer is that the company is successfully electrifying the industrial backbone of the US economy, but a key shift is happening toward software.

For the full fiscal year 2025, Flux Power Holdings, Inc. delivered $66.4 million in total revenue, marking a solid 9% increase from the $60.8 million reported in fiscal year 2024. This growth shows that the industry-wide conversion to lithium-ion solutions is a real tailwind, not just a promise.

Here's the quick math on the year-over-year change:

The core revenue stream is the sale of their advanced lithium-ion energy storage solutions-the physical battery packs-to commercial and industrial customers. These sales are concentrated in two primary business segments, both showing strong unit growth in the third quarter of fiscal 2025:

• Material Handling: Saw unit growth of 10%, powering things like forklifts.
• Ground Support Equipment (GSE): Experienced higher unit growth at 25%, serving the airline industry.

The GSE segment is defintely the one to watch, as it's driving higher average selling prices (ASPs) and securing large, concrete purchase orders. For example, the company recently secured a $2 million order from a major North American airline for its redesigned G80-420 battery pack, plus an additional $1.2 million order from another airline.

What this revenue analysis hides is the critical shift in the business model. The company is actively moving to diversify its revenue streams beyond just hardware sales by focusing on software-as-a-service (SaaS).

The new SkyEMS 2.0 software platform is a significant change, designed to create a recurring revenue stream by offering end-to-end battery life management. This is a huge opportunity because Flux Power Holdings, Inc. has an installed base of over 28,000 battery packs where they can upsell this telemetry (remote monitoring) service. This move from a one-time product sale to a connected solution sale is the right strategic action to improve long-term financial health, which you can read more about in Breaking Down Flux Power Holdings, Inc. (FLUX) Financial Health: Key Insights for Investors.

Profitability Metrics

You're looking for the hard numbers on Flux Power Holdings, Inc. (FLUX) to see if their growth story is translating into real profit. The quick takeaway is this: the company is getting much better at making money on its products, but the overhead still eats up all the gross profit. It's a classic scaling challenge.

For the full fiscal year 2025 (FY 2025), Flux Power Holdings, Inc. (FLUX) reported a total revenue of $66.4 million, a solid 9% increase over the prior year. More importantly, the efficiency of their production-measured by gross margin (Gross Profit / Revenue)-showed significant improvement, which is defintely a positive sign for investors.

Here's the quick math on their core profitability for the fiscal year ended June 30, 2025:

• Gross Profit: Approximately $21.7 million
• Gross Profit Margin: 32.7%
• Operating Loss: $5.0 million
• Operating Profit Margin: Approximately -7.5%
• Net Loss: $6.7 million
• Net Profit Margin: Approximately -10.1%

Gross Margin Trends and Operational Efficiency

The gross profit margin is the bright spot. It jumped 440 basis points (4.4 percentage points) from 28.3% in FY 2024 to 32.7% in FY 2025. This shows their operational efficiency (cost management) is working. The trend is even more compelling when you look at the final quarter, where the gross margin hit 34.5% in Q4 2025.

The CEO has pointed to strategic initiatives like cost reductions, product design simplification (like the redesigned G80-420 battery pack), and lower warranty expenses as the drivers for this margin expansion. That's exactly what you want to see from a growing manufacturer: better margins on every unit they ship. You can dive deeper into the market drivers in Exploring Flux Power Holdings, Inc. (FLUX) Investor Profile: Who's Buying and Why?

The Operating and Net Loss Reality

But here's the reality check: Gross profit is just the first step. The operating loss of $5.0 million and the net loss of $6.7 million for the full year tell you the company is still spending more on running the business (operating expenses, or OpEx) than it makes from sales. OpEx hit $26.8 million in FY 2025. This figure included about $2.9 million in non-recurring costs related to a multi-year financial statement restatement, which should not be an issue going forward.

If you back out those one-time restatement costs, the non-GAAP operating loss was closer to $2.1 million, and the non-GAAP net loss was $3.8 million. That's still a loss, but it shows a clearer path to breakeven once they stop incurring those extraordinary expenses. It also highlights that the ongoing sales, general, and administrative (SG&A) costs are the next big target for management.

Peer Comparison: Where FLUX Stands

Comparing Flux Power Holdings, Inc.'s profitability to the broader lithium-ion energy storage industry is tricky because of their focus on industrial equipment (like forklifts and ground support equipment). However, looking at key peers and industry benchmarks gives us a good context:

The industry is competitive, with general profit margins for EV battery production typically ranging from 10% to 20%, and some highly efficient manufacturers reaching 15-25%. Flux Power Holdings, Inc.'s GAAP gross margin of 32.7% is actually quite strong in this context, suggesting their specialized product mix and cost control are working well at the production level.

When we look at operating margins, the picture changes. For perspective, a large industrial peer, EnerSys, reported an EBIT (Operating) margin of 6.06% for its Energy Systems segment in the first nine months of FY 2025. Flux Power Holdings, Inc.'s GAAP operating margin of -7.5% is clearly behind, but the gap is closing, especially when you consider the one-time costs they had to absorb. The key is converting that high gross margin into a positive operating margin by controlling the SG&A line.

The next concrete step for you is to model their path to a positive operating margin. Finance: Project the FY 2026 OpEx assuming the $2.9 million restatement cost is gone and then calculate the sales volume needed to cover the remaining OpEx at a 34% gross margin.

Debt vs. Equity Structure

You're looking at Flux Power Holdings, Inc. (FLUX) and trying to figure out how they fund their growth, which is defintely the right place to start. The direct takeaway is this: Flux Power Holdings is currently operating with a negative equity position, meaning its financing is almost entirely debt-backed, and it is aggressively using equity funding to fix this structural imbalance.

As of the end of the fiscal year 2025 (June 30, 2025), the company's balance sheet showed a total shareholder equity deficit of approximately $-3.3 million, or a negative $4.37 million as of March 31, 2025, which is a critical signal of financial strain. The company had total debt of roughly $9.9 million. This isn't just a high debt level; it's a negative equity situation, which is a more serious challenge for a growing company.

Debt Load and Capital Structure

The company's debt is primarily structured around working capital needs, which is typical for a growth-focused manufacturer. This debt includes a senior secured revolving loan facility with Gibraltar Business Capital, LLC (GBC), which provides a credit line of up to $16.0 million, subject to a borrowing base. As of June 30, 2025, the company had an available balance of $2.4 million under this facility. This is short-term debt, used to manage day-to-day operations and inventory.

The debt-to-equity (D/E) ratio is the clearest indicator of this situation. Here's the quick math: with a negative equity figure, the D/E ratio becomes a negative number, specifically around -2.97 (or -297.2%) for the fiscal year 2025. You can't compare this directly to the industry average, but for context, the average D/E ratio for companies in the Industrials sector is around 60.1%. A D/E ratio of -2.97 signals a high-risk capital structure that relies heavily on debt to cover liabilities that exceed equity.

Balancing Debt and Equity Funding

Flux Power Holdings is actively balancing its debt and equity, but the focus is on shoring up its equity base. The company's reliance on debt financing, like the GBC revolving credit, gives them flexibility for working capital, but it also creates liquidity challenges, which is why the company has been focused on raising equity.

This is where the recent moves come in. The company has been busy with equity funding to address its negative equity and regain compliance with Nasdaq listing requirements. They closed a $5 million private placement of prefunded warrants and common warrants in September 2025, which had a net cash impact of approximately $3.8 million after debt conversion and fees. This was followed by another capital raise of $13.8 million net of fees in the period leading up to November 2025. They are using equity to pay down debt, like the cancellation of the Cleveland Capital promissory note in connection with the September 2025 private placement. This is a clear pivot toward equity to stabilize the balance sheet.

• Debt Strategy: Extend maturities and use revolving credit for working capital (e.g., GBC facility).
• Equity Strategy: Aggressively raise capital via private placements to convert debt and increase stockholders' equity.
• Recent Action: Raised $13.8 million in new capital, net of fees, by November 2025.

The goal is to move past the going-concern doubt and the Nasdaq non-compliance notice by building a positive equity base. You can learn more about their long-term strategy in their Mission Statement, Vision, & Core Values of Flux Power Holdings, Inc. (FLUX).

Next Step: Monitor the Q2 FY2026 balance sheet to see if the recent $13.8 million capital raise has successfully pushed stockholders' equity into positive territory.

Liquidity and Solvency

You're looking at Flux Power Holdings, Inc. (FLUX) and wondering if they have the cash to keep the lights on and fund their growth plans. That's the right question to ask, because liquidity-a company's ability to meet its short-term obligations-is the bedrock of any investment thesis. The numbers for the fiscal year ended June 30, 2025, paint a picture of a company with tight, but managed, liquidity, heavily relying on external financing.

The most immediate red flag is the short-term coverage. Flux Power Holdings, Inc.'s Current Ratio (current assets divided by current liabilities) for FY 2025 was a low 0.80. This means the company had only $0.80 in current assets for every dollar of current liabilities. Even more concerning is the Quick Ratio (acid-test ratio), which strips out inventory-often the least liquid current asset-and stood at just 0.37. That's a defintely tight position, suggesting that without selling off inventory (which accounts for over half of current assets), the cash on hand and receivables alone cannot cover their immediate bills.

Here's the quick math on their short-term position as of June 30, 2025 (in thousands):

The core issue here is the negative working capital (current assets minus current liabilities) of ($7,814,000) at the close of FY 2025. This negative trend highlights the company's reliance on its credit facilities to bridge the gap between paying suppliers (Accounts Payable of $16,295,000) and collecting from customers (Accounts Receivable of $11,374,000). The business model is growing-revenue hit $66.4 million in FY 2025-but the working capital is structurally weak, which is common for high-growth hardware companies that must carry significant inventory.

Looking at the cash flow statement, the trends are a mix of good and bad news. Flux Power Holdings, Inc. managed to generate $610,000 in net cash from operating activities in FY 2025, a significant turnaround from previous years' cash burn, despite reporting a net loss of ($6,674,000). This positive operating cash flow is a crucial sign of operational improvement, showing that the core business is getting closer to self-sufficiency. However, the company spent ($4,798,000) on investing activities, mainly capital expenditures, which is necessary for scaling. This deficit was largely covered by financing activities, which provided $734,000 in net cash, primarily through drawing on their revolving line of credit.

The liquidity strength isn't in its balance sheet cash-which was only $1,334,000 at year-end-but in its access to capital. They have a $16.0 million credit facility with Gibraltar Business Capital, with $2.4 million remaining available as of June 30, 2025. Plus, subsequent to the fiscal year end, the company raised approximately $5 million in gross proceeds from a private placement, which bolstered their cash position and helped them regain compliance with Nasdaq listing requirements. This is a capital-raise story, not a cash-generation story yet. For a deeper dive into the capital structure, you should read Exploring Flux Power Holdings, Inc. (FLUX) Investor Profile: Who's Buying and Why?

• Monitor inventory turnover; high inventory is a major current asset risk.
• Watch the line of credit balance; $13,627,000 is already drawn.
• The positive operating cash flow is a major step toward sustainability.

Valuation Analysis

When you look at Flux Power Holdings, Inc. (FLUX), the immediate takeaway is a classic growth-stock conundrum: it appears undervalued based on analyst price targets, but its fundamental profitability ratios scream caution. The current stock price of approximately $1.58 as of November 20, 2025, is significantly below the consensus price target of $6.00, suggesting a potential upside of nearly +279.7%. This gap is what you need to understand.

The core valuation metrics for Flux Power Holdings, Inc. are complex because the company is still in a high-growth, pre-profitability phase. For the fiscal year 2025 (FY2025), which ended June 30, 2025, the company reported a GAAP net loss of $6.7 million, or ($0.40) per share. So, traditional metrics like the Price-to-Earnings (P/E) ratio are negative, sitting around -3.95x (based on the $1.58 price and the FY2025 EPS of -$0.40). You can't use a negative P/E to compare value, so you have to look deeper.

Here's the quick math on the key valuation ratios for Flux Power Holdings, Inc. (FLUX) for FY2025:

• Price-to-Earnings (P/E): -3.95x. This is negative because the company is not yet profitable.
• Price-to-Book (P/B): -4.70x. This negative figure indicates the company has a negative book value (shareholders' equity), which is a serious liquidity concern, plus it points to a defintely high-risk profile.
• Enterprise Value-to-EBITDA (EV/EBITDA): Not meaningful. The FY2025 Adjusted EBITDA was near breakeven at ($0.1) million, and the Enterprise Value is around $39 million. Dividing a large number by a near-zero or negative one makes the ratio unusable for comparative analysis.

The stock price trend over the last 12 months shows high volatility, which is typical for a small-cap growth stock. The 52-week trading range has been wide, from a low of $1.15 to a high of $7.55. The stock has seen a decline of over -30% in the last 52 weeks, despite the company's full-year FY2025 revenue increasing 9% to $66.4 million and gross margin improving significantly to 32.7%. This tells me the market is punishing the lack of sustained profitability and the tight cash position of $1.3 million as of June 30, 2025. You should also be aware that the company does not pay a dividend, so the dividend yield and payout ratios are both 0.00%.

Analyst consensus, however, paints a much more optimistic picture. While some research firms have a more cautious 'Hold' recommendation, a number of analysts maintain a 'Strong Buy' rating with an average 12-month price target of $6.00. This optimism is generally tied to the company's strong revenue growth trajectory and the substantial improvement in gross margin, which hit 32.7% in FY2025, showing their operational efficiencies are starting to work. The market is clearly discounting future growth heavily right now, creating that huge implied upside. For a deeper dive into their strategic goals, you can review the Mission Statement, Vision, & Core Values of Flux Power Holdings, Inc. (FLUX).

What this estimate hides is the execution risk. The company needs to convert that gross margin expansion into consistent net income and positive free cash flow, especially in a challenging macroeconomic environment with tariff uncertainty. The consensus suggests the market is pricing in a successful transition to profitability, but the current stock price of $1.58 is saying, 'Show me the money first.'

Risk Factors

You're looking at Flux Power Holdings, Inc. (FLUX) and seeing a company that has improved its gross margin to 32.7% in fiscal year 2025, up 440 basis points, which is a great sign of operational efficiency. But, honestly, a seasoned analyst focuses on what can break the model, and for FLUX, the risks are real and clustered around three core areas: financial stability, market headwinds, and supply chain fragility.

The most immediate concern is financial. Flux Power Holdings, Inc. has a history of losses and negative working capital, which is why the company's filings mention substantial doubt about its ability to continue as a going concern (a term for a company's ability to stay in business). For the full fiscal year 2025, the net loss was still significant at approximately $6.7 million, even though that was a 20% improvement over the prior year. This is a critical point because it ties directly to their Nasdaq listing compliance.

The company remains out of compliance with the Nasdaq minimum stockholders' equity requirement of $2.5 million. As of March 31, 2025, the stockholders' equity was a deficit of $4,372,000. This is why management has been forced to raise capital, including a $5 million private placement post-Q4 2025 and a subsequent offering that raised approximately $9.2 million net of fees in Q1 of fiscal year 2026. This dilution is a necessary, but defintely painful, action to stay listed and fund operations.

• Financial Risk: Need for constant capital raises to offset negative working capital.
• Compliance Risk: Non-compliance with Nasdaq's minimum equity rule.
• Operational Risk: Material weaknesses in internal financial controls.

On the external side, the market is showing caution. We've seen delays in new orders because large customer fleets are cutting back on capital spending, influenced by economic uncertainty, higher interest rates, and global tariff uncertainties. Here's the quick math: the company's backlog dropped to a multi-year low of around $9.0 million at the end of Q4 2025, down from $16.9 million just three months earlier. That near-term weakness impacts future revenue and profitability.

Also, the supply chain is a single point of failure. Flux Power Holdings, Inc. relies on a single supplier in China for its core lithium-ion battery cells. This exposes them to major tariff impacts and supply chain disruptions, plus it makes them vulnerable to fluctuations in raw material prices, like lithium-ion phosphate cells. Anyway, the lithium-ion battery space is getting more competitive, and while FLUX is recognized for its growth, that competition puts constant pressure on pricing and margin.

What this estimate hides is the mitigation strategy. Management is actively trying to offset these risks by focusing on profitability through cost reduction and supply chain efficiencies. They are also leveraging their installed base of over 28,000 packs to upsell their SkyEMS telemetry software, which is a higher-margin recurring revenue stream. Plus, they are expanding into new, high-value markets like airport ground support equipment (GSE), evidenced by a $2.0 million order from a major North American airline for a redesigned battery pack. That's a smart move to diversify revenue away from just material handling.

Here's a snapshot of the key financial risks and their impact:

If you want to dive deeper into the operational and financial improvements that are helping to counter these risks, you can read the full analysis at Breaking Down Flux Power Holdings, Inc. (FLUX) Financial Health: Key Insights for Investors. Your next step should be to monitor the Q2 FY2026 report for any further decline in backlog or any new compliance updates from Nasdaq.

Growth Opportunities

You're looking at Flux Power Holdings, Inc. (FLUX) and wondering if the recent financial improvements are a blip or a genuine trend. Honestly, the operational data suggests a clear path for growth, even with the macroeconomic caution the CEO noted. The company's strategy is smart: focus on high-margin innovation and expanding the addressable market with the right certifications.

For the full fiscal year 2025, Flux Power Holdings, Inc. delivered $66.4 million in revenue, a solid 9% jump from the prior year. More importantly, the gross margin improved significantly to 32.7%, up 440 basis points from the year before. This shows they are getting better at managing costs and pricing their advanced lithium-ion battery solutions effectively. The net loss also tightened, improving to $6.7 million, or ($0.40) per share, from a larger loss in FY2024. That's a defintely positive trajectory.

Here's the quick math on forward-looking growth: analysts project Flux Power Holdings, Inc.'s revenue to hit around $74.63 million for the next fiscal year. This continued top-line expansion, coupled with operational focus, is expected to push the company toward profitability, with earnings per share (EPS) projected to swing from a loss of ($0.16) to a gain of $0.15 per share in the subsequent year. What this estimate hides is the potential impact of their recent strategic moves.

The company's future is being built on three core pillars: product innovation, market expansion, and strategic partnerships. These aren't just buzzwords; they are concrete, revenue-driving actions.

• Product Innovations: New patents, including one issued in November 2025 for continuous battery State of Health (SoH) monitoring, strengthen their proprietary Battery Management System (BMS). This technology directly translates to better fleet uptime and lower total cost of ownership for customers.
• Software and Recurring Revenue: The launch of the SkyEMS 2.0 SaaS platform, which has already converted a major airline from a beta tester to a paying customer, is a critical step toward a higher-margin, recurring revenue stream.
• Market Expansion: Achieving UL EE listing across their entire material handling portfolio has opened up a new estimated total addressable market of around $1 billion. That's a massive new hunting ground.

The company is also doubling down on key verticals. They have doubled their airline customer base to 8 major North American airlines, securing repeat orders like a recent $2 million purchase for their redesigned G80-420 battery pack. The recurring business, including a November 2025 total of $2.4 million in repeat orders from food & beverage and manufacturing customers, reinforces the long-term customer trust in their technology.

Their competitive advantages are clear. They specialize in a niche-industrial lithium-ion for material handling and airport Ground Support Equipment (GSE)-and their proprietary technology gives them an edge over traditional lead-acid solutions. This specialization, plus their inclusion in the Financial Times' list of the Americas' Fastest Growing Companies 2025, provides strong market validation.

To get a better sense of the institutional confidence behind these numbers, you should read Exploring Flux Power Holdings, Inc. (FLUX) Investor Profile: Who's Buying and Why?

The strategic initiatives driving this growth are summarized below:

The company is focused on execution, and the recent capital raises should provide the necessary working capital to accelerate their product development roadmap and capitalize on that $1 billion market opportunity. They are positioned to capture a larger share of the industrial electrification shift.