Dragonfly Energy Holdings Corp. Q1 FY2025 earnings call

• Revenue growth of 6.8% in Q1, exceeding guidance, with second consecutive quarter of y-o-y revenue growth. OEM net sales grew 10.8% due to broader integration of solutions at factory level. DTC net sales declined due to macroeconomic pressures.
• Corporate optimization program launched to focus on near-term revenue-generating opportunities, reallocating resources to product development with near-term revenue potential. Accelerated launch of Battle Born dual flow power pack for heavy-duty trucking market.
• Manufacturing operations enhanced with increased automation, standardized user interfaces, and new accountability frameworks. Consolidation into new 400,000 square foot facility strengthens ability to serve customer base while maintaining cost discipline.
• Domestic manufacturing capabilities provide competitive advantage, with investments in domestic production since 2012. Lithium supply agreement with Ioneer positions company ahead in localizing critical mineral supply chain.

First quarter net sales were $13.4 million, up 6.8% year-over-year. OEM net sales increased 10.8% to $8.1 million, representing 60.4% of total net sales. DTC net sales saw a slight decline of approximately 3.6% to $5.0 million, making up 37.3% of total net sales. First quarter gross profit increased 12.5% to $3.9 million, with gross margin at 29.4%, primarily driven by higher volume. Operating expenses were $9.8 million, higher than the prior year due to one-time expenses like patent litigation and the February capital raise. Net loss was $6.8 million with a diluted loss per share of $0.93, and adjusted EBITDA was negative $3.6 million compared to negative $5.2 million in the prior year.

• Expect net sales in Q2 to be approximately $14.8 million, representing 12% year-over-year growth.
• Expect adjusted EBITDA loss of approximately $3.5 million in Q2. Company believes it is well-positioned to navigate market volatility and work towards profitability and sustained growth through prioritizing near-term revenue, optimizing manufacturing, and reinforcing financial position.

• Macro-economic pressures impacting DTC segment. Uncertainty in tariff landscape which could affect costs. Difficulty in predicting and incorporating tariff effects into financial projections.

Q: Inquires about commercialization of dry electrode manufacturing technology.

A: Development is ongoing, but currently focusing on near-term revenue and profitability; still making progress on dry electrode.

Q: Asks about cash balance and EBITDA guidance for Q2.

A: Completed preferred equity deal, feels cash will help reach profitability by year-end. Q2 EBITDA loss due to continued investment in near-term products and tariff effects which are hard to predict.