DFLI — Dragonfly Energy Holdings Corp.

Summary of Dragonfly Energy (DFLI) Q1 2026 Earnings Call

1. Key Financial Results and Metrics

• Net Sales: $9.7 million (OEM: $5.8 million; DTC: $3.7 million), reflecting a decline due to a softer RV market.
• Gross Margin: 17.6%, impacted by lower sales volumes.
• Operating Expenses: $7.4 million, down from $9.8 million due to cost reduction measures.
• Net Loss: $7.7 million, or $0.64 per diluted share.
• Adjusted EBITDA: Negative $4.6 million.
• Q2 Guidance: Expected net sales of approximately $13.2 million (36% sequential growth) and adjusted EBITDA loss of about $1.9 million, indicating improvement.

2. Strategic Updates and Business Highlights

• RV Market: Continued headwinds with new RV retail sales down over 20% year-over-year; however, healthy adoption trends noted among OEM partnerships.
• Heavy-Duty Trucking: Significant momentum with a $3 million order from Stevens Transport for nearly 500 trucks, marking a transition from pilot programs to fleet-wide implementation.
• Cost Structure: Implemented measures to align costs with growth opportunities, resulting in approximately $4.5 million in annualized expense reductions and an expected additional $4 million from rental space consolidation.
• Technology Development: Received patent allowance for solid-state electrolyte technology, enhancing the company’s IP portfolio, which includes nearly 90 patents.

3. Forward Guidance and Outlook

• 2026 Outlook: Positioned as a pivotal year with expectations of reaching positive adjusted EBITDA at an annualized sales run rate of approximately $70 million.
• Commercial Momentum: Anticipated growth in trucking revenue and improved conditions in the RV market as the year progresses.

4. Bad News, Challenges, or Points of Concern

• RV Market Decline: The RV sector continues to face significant challenges, with both retail sales and wholesale shipments declining year-over-year.
• Net Losses: The company reported substantial net losses, indicating ongoing financial challenges.
• Market Headwinds: The broader RV market remains soft, which could impact future sales and profitability.

5. Notable Q&A Insights

• Trucking Market Pipeline: Wade Seaburg highlighted a strong pipeline of opportunities in the trucking sector, with fleets beginning to order trucks again, indicating a recovery in capital spending.
• Addressable Market: The heavy-duty trucking market is robust, with approximately 250,000 trucks built annually, half of which require driver comfort features.
• Technology Development: Denis Phares noted ongoing efforts to develop dry electrode and solid-state technologies, emphasizing the importance of partnerships and supply chain development despite the focus on profitability and cost management.

Overall, Dragonfly Energy is navigating a challenging RV market while capitalizing on growth opportunities in the heavy-duty trucking sector, with a strategic focus on cost management and technology development.