$DFLI earnings report

Dragonfly Energy reported Q3 2026 net sales of $12,174 thousand, down 23.8% from $15,967 thousand in Q3 2025, and below the previously issued guidance of approximately $13.5 million according to the release. By customer type, OEM net sales were $7,122 thousand (down 33.3%) and DTC net sales were $4,802 thousand (down 4.7%). Licensing fee revenue was flat at $250 thousand. The company attributes the OEM decline to RV industry softness, citing RV Industry Association data showing wholesale shipments down 13.7% year to date through September, and attributes the DTC decline to macroeconomic pressures. Management describes heavy-duty trucking revenue of $1.3 million as more than doubling sequentially, a figure the filing does not show on a prior-quarter basis in its tables.

Profitability moved in both directions. Gross profit was $3,285 thousand against $4,736 thousand, and gross margin was 27.0% against 29.7%. The company says the gross profit decline was primarily driven by lower volumes. Total operating expenses fell to $7,338 thousand from $8,514 thousand, with selling and marketing down to $1,593 thousand from $2,630 thousand, which the company links to cost-reduction initiatives. Loss from operations widened to $(4,053) thousand from $(3,778) thousand. Net loss narrowed to $(5,539) thousand from $(11,070) thousand, but the filing does not explain the drop in interest expense, net, which was $(1,774) thousand against $(6,409) thousand. Net loss attributable to common stockholders was $(6,707) thousand after $(1,168) thousand of Series B preferred dividends, or $(3.71) per diluted share, against $(16.45) a year earlier. The per-share comparison is affected by the share count, which the filing shows as 1,807,571 weighted average shares against 673,112 a year earlier, a change the release does not discuss.

Adjusted EBITDA, a non-GAAP measure, was $(2,341) thousand against $(2,137) thousand in Q3 2025 and $(1.6) million in Q2 2026 as printed in the release. The company states the year-over-year Adjusted EBITDA decline of $0.2 million, despite a 23.8% fall in net sales, reflects cost-reduction progress. The EBITDA reconciliation in the filing begins from a line labelled Net Loss Before Taxes of $(6,707) thousand, which does not match the income statement's $(5,539) thousand; this is a discrepancy the release does not address, and this read uses the income statement figures.

Balance sheet and cash flow data show a sharp fall in liquidity. Cash and cash equivalents were $1,941 thousand at September 30, 2026, against $18,270 thousand at December 31, 2025. Net cash used in operating activities was $(13,071) thousand in the nine months, against $(11,245) thousand a year earlier. Current notes payable rose to $12,483 thousand from $433 thousand, and stockholders' equity was $(4,544) thousand against $11,530 thousand. The Dakota Lithium acquisition, completed at the end of July per the release, appears in the cash flow as $(1,000) thousand of cash paid and $1,755 thousand of noncash consideration.

For Q4 2026 the company guides to net sales of approximately $12.5 million and Adjusted EBITDA of approximately breakeven, which it says reflects anticipated tariff-related refunds and cost reductions. It also expects trucking revenue to nearly double sequentially and Dakota Lithium inventory to begin arriving toward the end of the quarter, with a more meaningful revenue contribution from Q1 2027. Gross margin, operating expense and tax rate guidance are not given. The guide depends on trucking growth, tariff refunds and an acquisition whose revenue is not yet visible in reported results.

Dragonfly reported preliminary second-quarter net sales of $ 13,159 (in thousands), down -19.0 % from $ 16,248 (in thousands). Both primary customer channels declined, with OEM revenue of $ 8,432 (in thousands), down -16.1 %, and DTC revenue of $ 4,477 (in thousands), down -24.7 %. Management attributed the OEM decline to continued macroeconomic pressure on RV production volumes, while citing consumer-demand pressure and negative third-party online commentary as factors in the DTC decline. Licensing Fee revenue was $ 250 (in thousands), unchanged year over year.

Profitability improved despite the lower sales base. Gross margin expanded to 33.0% from 28.3%, while gross profit was $4.3 million versus $4.6 million. The company attributed the gross-profit decline primarily to lower battery and accessory unit volume, partially offset by a $1.1 million tariff-refund benefit recorded in cost of sales. Operating Expenses declined to $7.2 million from $7.9 million as cost-reduction actions took effect, and the company continued its facility consolidation during the quarter.

The company remained loss-making on a GAAP basis, reporting Net Loss of $(4.4) million and Net Loss Attributable to Common Shareholders of $(5.5) million, or $(0.43) per diluted share. However, Adjusted EBITDA improved to $(1.6) million from $(2.2) million in the second quarter of 2025 and $(4.6) million in the first quarter of 2026. Management identified its cost-reduction actions as the driver of the sequential improvement. The reported results remain preliminary and may be adjusted during the preparation and review of the quarterly financial statements.

Commercial developments center on heavy-duty trucking and the Dakota Lithium acquisition. Deliveries under the Stevens Transport purchase order began during the quarter, and management expects heavy-duty trucking revenue to more than double sequentially in the third quarter as fleets expand deployments. The Dakota Lithium asset acquisition occurred subsequent to quarter-end; management expects the brand to begin contributing meaningful revenue and to be accretive to Adjusted EBITDA starting in the fourth quarter.

For Q3 2026, the company guided to net sales of approximately $ 13.5 million and Adjusted EBITDA of approximately $( 2.4 ) million. Management said the Adjusted EBITDA outlook includes temporary expense for vacated facility space and incremental costs to restore Dakota Lithium’s commercial operations. The company also cited lender amendments that reduce the minimum cash covenant, convert the next two quarters of interest to paid-in-kind interest, and defer specified leverage and coverage covenant requirements until September 2027, amendments expected to preserve approximately $1 million of near-term liquidity.