DRAGONFLY 2025 Q2
Earnings Overview & AI Insights

Earnings Performance

Summary of Financial Performance:

Dragonfly Energy Holdings Corp. reported strong Q2 2025 financial results, with net sales increasing 23% year-over-year to $16.2 million, marking the third consecutive quarter of growth. OEM segment sales surged by over 50% to $10.1 million, while DTC segment sales declined to $5.9 million due to macroeconomic pressures. Gross profit rose 45.4% to $4.6 million, with gross margin expanding by 430 basis points to 28.3%, driven by lower inventory costs and higher absorption of fixed costs. Operating expenses fell to $7.9 million from $9.9 million, reflecting cost optimization efforts. Net loss narrowed significantly to $7 million ($0.58/share) from $13.6 million ($2.02/share) in the prior year. Adjusted EBITDA improved to negative $2.2 million from negative $6.2 million. The company completed a $5.5 million equity raise and streamlined its capital structure by converting preferred shares into common stock.

Company Outlook & Strategy:

Management forecasts Q3 2025 net sales of $15.9 million, representing 25% year-over-year growth, with adjusted EBITDA expected at negative $2.7 million. While Q3 is seasonally softer, Dragonfly Energy remains focused on driving near-term revenue growth through OEM partnerships, particularly in the RV and heavy-duty trucking markets. The company’s domestic manufacturing capability is positioned as a strategic differentiator, allowing better cost control, quality assurance, and agility in responding to tariff volatility and supply chain localization trends. Dragonfly is also advancing its intellectual property portfolio, particularly with its all-solid-state battery patent, which enhances safety and scalability for future products.

Key Industry Trends:

Management highlighted an industry shift toward premium features and value-added offerings, particularly in the RV market. OEMs are increasingly seeking integrated energy storage solutions rather than standalone batteries, underscoring the demand for turnkey, high-performance systems. Additionally, supply chain localization is becoming a prominent trend due to tariff volatility, which Dragonfly Energy has leveraged through its domestic production facilities.

Operational Highlights:

• Airstream Partnership: Dragonfly developed an integrated energy storage system that will be standard in select 2026 Airstream RV models, showcasing its engineering capabilities and manufacturing enhancements.
• Smart Battery Adoption: OEMs are beta testing the proprietary DragonFly Intelligence platform for advanced battery monitoring and communication, with plans for broader adoption in 2026 product lineups.
• Heavy-Duty Truck Pilots: Fleet pilot programs demonstrated measurable idle reduction and cost savings, with meaningful revenue contributions anticipated in early 2026.
• Domestic Manufacturing: Production at the Nevada facility provides supply chain control, cost management, and tariff mitigation, reinforcing Dragonfly's competitive edge.

Challenges & Risks:

• Macroeconomic Pressures: Persistent caution among retail customers has led to lower DTC sales, impacting overall revenue growth.
• Seasonal Weakness: Q3 sales are expected to be softer than Q2 due to typical seasonal trends.
• Heavy-Duty Truck Market Adoption: While pilot programs show promise, broader adoption of solutions in this challenging market remains uncertain.
• Tariff Volatility: While mitigated through domestic production, external trade dynamics remain a potential risk.

Key Analyst Questions & Responses:

1. OEM Growth Strategy: Analysts focused on the company's ability to deepen OEM relationships through early design-phase collaboration and turnkey energy storage solutions. Executives emphasized the growing adoption of integrated systems and smart battery platforms.
2. Heavy-Duty Truck Market: Questions addressed the timeline for significant revenue from trucking solutions. Management expressed confidence in market adoption, citing strong pilot program results.
3. Capital Structure and Equity Raise: Analysts asked about the implications of the recent equity offering. Management highlighted institutional participation and the elimination of preferred share-related interest and dilution as key benefits.
4. Product Innovation: Analysts queried the impact of the all-solid-state battery patent. Executives stressed its importance in enhancing safety, scalability, and competitive positioning for future growth.

Dragonfly Energy Holdings Corp. demonstrated strong execution in Q2 2025, leveraging OEM partnerships, domestic manufacturing, and innovation to drive growth despite macroeconomic challenges. Management remains optimistic about sustained revenue growth and profitability in the long term.