Envirotech Vehicles (AZIO) Financials

Important data note: The supplied filings identify the company as AZIO AI Holdings, Inc. (NASDAQ: AZIO), rather than Envirotech Vehicles. The analysis below is based on the AZIO financial statements provided.

Revenue improved in the second quarter of 2026, but profitability remains weak. Revenue increased 18.4% sequentially to $2.66 million from $2.25 million in Q1 2026 and was more than double the $1.05 million reported in Q2 2025. Gross profit also turned positive at $71,329, compared with a gross loss of $188,612 in Q1. However, gross margin was only approximately 2.7%, leaving little room to cover operating expenses.

Operating performance deteriorated despite the revenue increase. Selling, general and administrative expense rose 62% sequentially to $5.80 million, producing an operating loss of $5.74 million. The net loss widened to $6.64 million, or $0.46 per basic share, from a $3.99 million loss, or $0.31 per share, in Q1 2026. The company has reported sizable net losses in every period provided, including a $13.59 million loss in Q4 2025 and a $14.04 million loss in Q1 2025.

Cash flow and liquidity are the most significant concerns. Cash used in operating activities increased to $5.39 million in Q2 from $3.34 million in Q1. The company also spent $3.19 million on property, plant and equipment. Although $6.72 million of debt issuance provided financing, cash still declined by $1.87 million during the quarter, leaving only $141,955 in cash at June 30, 2026.

The balance sheet has weakened materially. Current assets of $4.12 million were far below current liabilities of $26.92 million, implying a current ratio of approximately 0.15. Total liabilities reached $27.94 million, while shareholders’ equity was negative $12.38 million. Short-term debt increased to $9.27 million from $3.49 million in Q1, suggesting continued reliance on external financing to fund operations.

• Revenue momentum improved: Q2 2026 revenue rose 18.4% sequentially and 154% year over year from Q2 2025.
• Gross profitability recovered: The company generated $71,329 of gross profit in Q2 2026 after reporting a gross loss in Q1, although the margin remained very thin.
• Capital investment increased: Property, plant and equipment grew substantially, supported by $3.19 million of capital expenditures in Q2, which could support future production or sales capacity if those investments generate adequate returns.
• Accounts receivable increased: Receivables rose to $2.36 million from $1.60 million in Q1, which may reflect higher sales but also places greater importance on timely customer collections.
• Comparability is limited: Several historical income statement and cash flow periods are marked as restated or calculated, so investors should review the company’s filings before relying on direct period-to-period comparisons.
• Losses remain substantial: The Q2 2026 net loss widened to $6.64 million, and the company has remained unprofitable throughout the periods provided.
• Operating cash burn accelerated: Cash used in operations increased to $5.39 million in Q2 from $3.34 million in Q1, while the company continues to spend heavily on capital expenditures.
• Liquidity is extremely strained: Q2 cash of $141,955 was only a small fraction of current liabilities of $26.92 million, creating significant near-term funding risk.
• Leverage increased: Short-term debt rose to $9.27 million, and the quarter’s financing inflow was driven primarily by $6.72 million of new debt rather than internally generated cash.
• Shareholder value has been eroded: Retained earnings were negative $123.21 million, total equity was negative $12.38 million, and weighted average basic shares increased to 14.34 million from 12.89 million in Q1, indicating dilution risk alongside continued losses.

Overall, AZIO’s revenue trajectory and return to a positive gross profit are encouraging, but they have not yet translated into a sustainable business model. Investors should closely monitor gross margins, operating expense growth, operating cash flow, additional debt or equity financing, and whether the company can restore positive working capital.