Dragonfly Energy Q1 2025 Earnings Report

Dragonfly Energy EPS Results

• Actual EPS: -$14.50
• Consensus EPS: -$14.40
• Beat/Miss: Missed by -$0.10
• One Year Ago EPS: N/A

Dragonfly Energy Revenue Results

• Actual Revenue: $13.36 million
• Expected Revenue: $13.26 million
• Beat/Miss: Beat by +$96.00 thousand
• YoY Revenue Growth: N/A

Dragonfly Energy Announcement Details

• Quarter: Q1 2025
• Date: 5/15/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, May 15, 2025
• Conference Call Time: 4:30PM ET

Dragonfly Energy (NASDAQ:DFLI) Corp. is a designer and manufacturer of lithium iron phosphate (LiFePO4) battery systems geared toward mobile, residential and commercial energy storage applications. The company develops modular battery packs and integrated power management solutions that focus on safety, long cycle life and compact form factors. Dragonfly’s core product lineup includes 12-volt and 24-volt battery modules, as well as multi-unit rack systems tailored for backup power, solar energy storage and off-grid installations.

Serving a broad range of end markets, Dragonfly Energy’s batteries are commonly deployed in recreational vehicles, marine vessels, overland expedition setups and residential solar arrays. Its products integrate battery management software for state-of-charge monitoring, temperature regulation and cell balancing, delivering turnkey solutions for installers and end users. The company also offers custom engineering support to adapt its LiFePO4 chemistry and system architecture to specialized commercial and industrial applications.

Headquartered in Fort Lauderdale, Florida, Dragonfly Energy maintains manufacturing and engineering operations in the United States. The company’s leadership team is led by co-founder and Chief Executive Officer Kyle Manning, who has guided Dragonfly through product development milestones and the transition to a publicly traded entity on the NASDAQ under the ticker DFLI. Dragonfly continues to expand its distribution network and invest in research and development to enhance battery performance and scalability for emerging clean-energy markets.

Dragonfly Energy Q1 2025 Earnings Call Transcript

Key Takeaways

• Dragonfly reported 6.8% revenue growth in Q1, beating guidance with OEM sales up 10.8% while DTC sales dipped 3.6%.
• The newly launched corporate optimization program is driving resource reallocation, automation and facility consolidation to boost production capacity and cost discipline.
• The Battleborn Dual Flow PowerPack for heavy-duty trucks has launched with strong early fleet adoption, offering under-one-year ROI for partial electrification needs.
• Dragonfly’s US-based assembly in Nevada and a lithium supply agreement with Pioneer strengthen its domestic manufacturing and tariff resilience.
• Q1 gross margin rose to 29.4% and net loss narrowed to $6.8 M (vs. $10.4 M prior year); Q2 revenue is guided to $14.8 M (+12% YoY) with an adjusted EBITDA loss of ~$3.5 M.

Presentation

[Operator]

Good afternoon and welcome to Dragonfly Energy's first quarter 2025 earnings call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. I'll now turn the call over to Simon Serowiecki, Investor Relations. Please go ahead.

[Simon Serowiecki, Head of Investor Relations at Dragonfly Energy Holdings Corp]

Thank you, Operator. Appreciate you joining us for today's call. Joining me here are Dr. Dennis Ferris, Dragonfly Energy's Chairman, President, and Chief Executive Officer, and Wade Seaburg, Chief Commercial Officer. Before I turn the call over to Dennis, I'd like to make a brief statement regarding forward-looking remarks. During this call, the company will be making forward-looking remarks within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, based on current expectations. These forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from those expressed or implied by such forward-looking statements.

[Simon Serowiecki, Head of Investor Relations at Dragonfly Energy Holdings Corp]

Actual results may differ due to factors noted in the press release and in periodic SEC filings. Management will reference some non-GAAP financial measures. Reconciliations to the nearest corresponding GAAP measures can be found in today's release on the company's website.Please note that all comparisons will be discussed today on a year-over-year basis unless otherwise noted. I'll now turn the call over to Dennis.

[Dennis Phares, Chairman, Founder, and CEO at Dragonfly Energy Holdings Corp]

Thank you, Simon, and thank you, everyone, for joining us today. We were pleased to report revenue growth of 6.8% in the first quarter, exceeding our guidance and representing our second consecutive quarter of year-over-year revenue growth. While the RV market continues to navigate headwinds, adoption trends within our product portfolio remain healthy. This is evidenced by the 10.8% growth in net sales from OEM customers, driven by broader integration of our solutions at the factory level across more models within existing partnerships. Partially offsetting OEM growth was a slight decline in net sales from DTC customers, as the segment continues to be impacted by macroeconomic pressures.

[Dennis Phares, Chairman, Founder, and CEO at Dragonfly Energy Holdings Corp]

While we remain committed to serving our valued DTC customers, we expect long-term growth to be led by our OEM channel as we expand our strategic partnerships and accelerate our product development and rollout efforts.As we discussed in the prior quarter, we successfully launched our corporate optimization program to more precisely focus the organization and its priorities on near-term revenue-generating opportunities, accelerating our path to growth and profitability. This strategic initiative is already delivering tangible operational improvements, strengthening our ability to execute across key target markets.

[Dennis Phares, Chairman, Founder, and CEO at Dragonfly Energy Holdings Corp]

As part of this initiative, we reallocated resources to prioritize product development with near-term revenue potential. A strong early example of this strategy is the accelerated launch of our Battle Born Dual-Flow Power Pack for the heavy-duty trucking market, a practical hybrid electrification solution. In today's uncertain market, we believe many fleets are looking to adopt partial electrification strategies that balance short-term cost control with long-term sustainability and performance goals. As Wade will discuss shortly, the Dual-Flow solution is already gaining traction among fleets navigating these operational challenges.

[Dennis Phares, Chairman, Founder, and CEO at Dragonfly Energy Holdings Corp]

The optimization program has also enabled us to implement several targeted enhancements across our manufacturing operations, resulting in increased production capacity without the need for any additional headcount. Under the leadership of Dr. Vic Singh, our Chief Operating Officer, we have increased the use of automation on our product lines, standardized user interfaces, and implemented new accountability frameworks. Along with recent consolidation into our new 400,000 sq ft facility, these operational enhancements are strengthening our ability to serve and grow our diverse customer base while maintaining our focus on cost discipline and organizational efficiency.

[Dennis Phares, Chairman, Founder, and CEO at Dragonfly Energy Holdings Corp]

Ultimately, we believe our corporate optimization initiative, combined with our stronger financial position following our recent debt restructuring and capital raise, provides the foundation for continued revenue growth as we drive towards profitability. Turning to the broader market environment, I'd like to highlight Dragonfly Energy's unique strategic position amid today's volatile tariff landscape. First and foremost, our growing U.S.-based production capabilities provide a significant competitive advantage over companies relying on overseas production. We have been investing in domestic battery production since 2012, well before onshoring became a national priority.

[Dennis Phares, Chairman, Founder, and CEO at Dragonfly Energy Holdings Corp]

While we continue to source certain components, such as battery cells, from overseas suppliers, we complete all final assembly at our Nevada-based facility, an approach that not only strengthens quality control but also reflects our longstanding commitment to U.S. manufacturing. We view this strategy as an interim step on our path to becoming a complete domestic producer, including production of our own lithium iron phosphate cells. We believe our domestic operations allow us to add substantial value through design, assembly, testing, and integration, resulting in greater flexibility, improved quality assurance, and key cost advantages. With a larger portion of our cost structure tied to U.S.

[Dennis Phares, Chairman, Founder, and CEO at Dragonfly Energy Holdings Corp]

Labor and overhead rather than imported finished goods, we are better positioned to absorb tariff-related impacts. In addition, our vertically integrated approach lays the groundwork for further domestic expansion. We've accelerated efforts to transition select components to North American-based sourcing where feasible, and we remain committed to expanding our domestic footprint as market conditions and regulatory factors evolve. In addition, Dragonfly Energy holds a lithium supply agreement with Ioneer, positioning us ahead of the curve as the U.S. works to localize critical mineral supply chains.

[Dennis Phares, Chairman, Founder, and CEO at Dragonfly Energy Holdings Corp]

Located in Nevada, Ioneer's Rhyolite Ridge Lithium Boron Project offers both logistical and strategic advantages. With lithium development recognized as a priority industry by state leadership, we believe this agreement supports our long-term vision of building a more sustainable and resilient U.S.-based battery ecosystem as we continue working toward full vertical integration of our battery manufacturing within the state.In direct response to tariff developments, we've taken proactive steps to help mitigate potential impacts. First, we've leveraged our position as a long-term strategic customer to secure favorable terms with key foreign suppliers, helping to offset potential cost increases.

[Dennis Phares, Chairman, Founder, and CEO at Dragonfly Energy Holdings Corp]

Second, we're working closely with our customers to manage pricing adjustments and ensure minimal disruption to their operations. We continue to evaluate additional strategies to enhance our flexibility and efficiency as the trade environment evolves. Looking ahead, we believe our domestic manufacturing foundation, combined with our strategic diversification into adjacent markets, positions Dragonfly Energy to navigate this volatile environment while continuing to deliver high-quality energy storage solutions to a diverse and growing customer base. Now, I would like to pass the call to Wade, who will discuss trends we are seeing in the heavy-duty trucking industry.

[Wade Seaburg, Chief Commercial Officer at Dragonfly Energy Holdings Corp]

Thank you, Dennis. I'd like to take a few moments to provide an update on what we are seeing across the heavy-duty trucking market, where we continue to engage with both fleet owners and OEMs offering unique value-add solutions. In response to market uncertainty, fleets are increasingly focused on extending the life of existing trucks and unlocking real-world operational savings today, not years down the line. We believe our product portfolio is uniquely positioned to meet those needs, delivering cost-effective, practical solutions that reduce idling, lower maintenance burdens, and improve system reliability across aging fleets.

[Wade Seaburg, Chief Commercial Officer at Dragonfly Energy Holdings Corp]

This trend plays directly into Dragonfly Energy's strengths. Grounded in years of experience developing advanced battery technology and power system innovations, we believe our deep technical expertise, combined with a flexible U.S.-based manufacturing foundation, enables us to deliver practical, application-specific solutions that align with the evolving needs of our customers.A strong example of this approach is our Battle Born Dual-Flow Power Pack, a practical and cost-effective solution for fleets seeking idle reduction benefits without the complexity or cost of an all-electric APU system.

[Wade Seaburg, Chief Commercial Officer at Dragonfly Energy Holdings Corp]

Many fleets are either dealing with the common failures of diesel APUs or simply aren't ready to transition to a fully electric system for climate control. With capital expenditures under pressure, the Dual-Flow addresses these challenges head-on by powering hotel loads such as HVAC, lighting, and electronics, during rest periods, allowing fleets to significantly reduce engine idling. In addition to fuel savings, the system also helps extend the life of the truck's starter batteries by isolating and supporting parasitic loads.With seamless integration into both new and existing vehicles, a compact footprint, and an ROI typically under one year, the Dual-Flow is gaining traction as a smart,

[Wade Seaburg, Chief Commercial Officer at Dragonfly Energy Holdings Corp]

dependable option for fleets looking to cut operating costs without overhauling their current systems. The strength of our value proposition is reflected in the increased fleet engagement we've seen over the past few months, marking meaningful progress as we work to establish ourselves within the heavy-duty trucking industry. At recent trucking industry events, we believe Dragonfly Energy solutions have emerged as a priority for attendees, with many high-profile potential customers making Dragonfly their first point of contact. As battery-related challenges in fleet operations become more visible, our solutions are being recognized as practical, high-impact tools that deliver immediate cost and performance benefits.

[Wade Seaburg, Chief Commercial Officer at Dragonfly Energy Holdings Corp]

Even in a challenging market, operators see that our offerings are purpose-built to address their real-world needs, supported by a compelling ROI. We believe Dragonfly Energy is uniquely positioned to capitalize on this industry shift. Our ability to deliver practical, lithium-powered solutions that directly address fleet needs continues to resonate with operators navigating today's cost and reliability challenges. We're excited to work alongside our partners to drive meaningful performance improvements and support their long-term sustainability and operational goals. I'll now turn the call back to Dennis.

[Dennis Phares, Chairman, Founder, and CEO at Dragonfly Energy Holdings Corp]

Thank you, Wade. I will now provide a review of our first quarter results as well as a more detailed outlook for the second quarter of 2025. First quarter net sales of $13.4 million were up 6.8%, led by continued strength from our OEM customers. OEM net sales increased 10.8% to $8.1 million as we continue to see healthy adoption trends within our product portfolio. Net sales growth was partially offset by the DTC segment, which saw revenue decline approximately 3.6% to $5.0 million, reflecting continued macroeconomic uncertainty. First quarter gross profit increased 12.5% to $3.9 million, and gross margin increased 500 basis points to 29.4%, primarily driven by higher volume.

[Dennis Phares, Chairman, Founder, and CEO at Dragonfly Energy Holdings Corp]

Operating expenses were $9.8 million, above the $8.9 million reported in the prior year period, primarily due to expenses related to patent litigation and the February capital raise, both of which are one-time in nature. Net loss was $6.8 million, with a diluted loss per share of $0.93, compared to net loss of $10.4 million with a diluted loss per share of $1.55. Adjusted EBITDA was negative $3.6 million, compared to negative $5.2 million. Looking ahead to the second quarter, we expect net sales to be approximately $14.8 million, representing year-over-year growth of 12%, and we expect an adjusted EBITDA loss of approximately $3.5 million.

[Dennis Phares, Chairman, Founder, and CEO at Dragonfly Energy Holdings Corp]

To conclude, we believe Dragonfly Energy is well-positioned to navigate ongoing market volatility while continuing to deliver high-quality energy storage solutions to our diverse customer base. By prioritizing near-term revenue opportunities, optimizing our manufacturing operations, and reinforcing our financial position, we have established a clear path toward profitability and sustained growth. Our domestic manufacturing capabilities provide a strategic advantage in today's complex environment, allowing us to respond quickly and effectively to evolving customer needs. We look forward to building on this momentum throughout 2025 and driving long-term value for our shareholders. Operator, we would like to open the call to questions.

[Operator]

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press Star one on your touch-tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press Star two. If you're using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Your first question comes from George Gianarikas from Canaccord Genuity. Your line is already open.

[George Gianarikas, Sustainability Research Analyst at Canaccord Genuity Corp]

Hi, good afternoon, everyone. Thank you for taking my questions. I'd like to ask about the commercialization opportunities around your Dry electrode manufacturing technology. Any updates there, any developments, any news would be very much appreciated. Thank you.

[Dennis Phares, Chairman, Founder, and CEO at Dragonfly Energy Holdings Corp]

Hi, George. Thank you for your question. I will say that development is ongoing. We're obviously still working on developing the scale-up equipment, and we do have interest from commercial partners. I would like to say that we've been devoting a significant amount of resource to that, but that is not the case in the last quarter. We've been really focusing on near-term revenue and getting back to profitability. That's been our number one priority, but we're certainly continuing progress on the Dry electrode as fast as we can.

[George Gianarikas, Sustainability Research Analyst at Canaccord Genuity Corp]

Thank you. Maybe as a follow-up, I'd just like to focus on the balance sheet and profitability. First, just thoughts on the cash balance as reported as of the end of March. Also, I saw your EBITDA guidance for the quarter, and I would have expected a little bit of an improvement sequentially based on the increased revenue. Just any thoughts on those two? I'd appreciate it. Thank you.

[Dennis Phares, Chairman, Founder, and CEO at Dragonfly Energy Holdings Corp]

Sure. In terms of the cash balance, we did just complete the preferred equity deal. It came in two tranches. One, the initial tranche came in the first quarter, and the second tranche came in the second quarter. We do feel that we have the cash to get us back to profitability at the end of the year. In terms of the cash at the end of the first quarter, we did pay down some AP, so we feel very good about the fact that we're able to catch up on some of those expenses. Moving forward, we have been really focused on investing in near-term revenue growth, and that's really where the spend has gone.

[Dennis Phares, Chairman, Founder, and CEO at Dragonfly Energy Holdings Corp]

Although we had some reductions in our research and development, the fact that we were able to accelerate the development of a highly anticipated heavy-duty trucking product like the Dual-Flow was entirely made possible by the enhanced investments that we made in this near-term opportunity. I can't stress enough that the importance for us to get back to cash flow positive, to get back to profitability, is going to open up a lot of doors in terms of our ability to really produce in not just the Dry electrode, but also getting back to the solid-state development, which we're all still very excited about.

[Dennis Phares, Chairman, Founder, and CEO at Dragonfly Energy Holdings Corp]

The frustration in the recent history is the fact that we've been having to focus on cash flow and our ability to really give ourselves some breathing room, especially through this preferred equity deal and some debt relief that we got, is going to make all this possible.

[George Gianarikas, Sustainability Research Analyst at Canaccord Genuity Corp]

Thank you. Maybe just a follow-up on the EBITDA in Q2 that you are expecting a loss of $3.5 million, I think it was, but why is not there a little bit of a sequential improvement in Q2 based on the fact that revenues are amping a little bit? Thanks.

[Dennis Phares, Chairman, Founder, and CEO at Dragonfly Energy Holdings Corp]

That's because of some continued investment in, as I said, the near-term product development and the new products that we have coming out and driving the business that is going to get us back to the profitability that we expect. The other thing that I have to say is we're also incorporating the effect of tariffs, and that's been difficult to predict. It's obviously something that's been in flux, but given the fact that we have been allowing the situation to evolve and allowing ourselves to plan for that accordingly and try to hold on as best as we can to the very important customers that we have, we've been able to incorporate that in the projections for this quarter.

[George Gianarikas, Sustainability Research Analyst at Canaccord Genuity Corp]

Thank you.

[Dennis Phares, Chairman, Founder, and CEO at Dragonfly Energy Holdings Corp]

Thank you, George.

[Operator]

Ladies and gentlemen, as a reminder, if you have a question, please press Star 1. There are no further questions at this time. I would hand over the call to Dennis Ferris for closing remarks. Please go ahead.

[Dennis Phares, Chairman, Founder, and CEO at Dragonfly Energy Holdings Corp]

Thank you for everyone joining us today. We look forward to sharing additional details with all of you in the coming quarters. Have a great day.

[Operator]

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation, and you may now disconnect.

Participants

Executives

• Wade Seaburg, Chief Commercial Officer
• Dennis Phares, Chairman, Founder, and CEO
• Simon Serowiecki, Head of Investor Relations

Analysts

• George Gianarikas, Sustainability Research Analyst at Canaccord Genuity Corp