Dragonfly Energy Reports 2025 Revenue Growth, Implements Cost Reductions and Targets Profitability in 2026

Dragonfly Energy Holdings Corp. Reports Q4 and Full Year 2025 Results and Announces Major Corporate Actions

Key Highlights for Investors

Full Year 2025 Revenue Growth: Revenue increased 16% year-over-year, driven primarily by a robust 34% growth in OEM (Original Equipment Manufacturer) sales.
Cost Structure Improvements: The company announced a comprehensive cost realignment initiative targeting \$8.9 million in annualized savings, including executive compensation reductions, workforce adjustments, discretionary spending cuts, and facility consolidation.
Accelerated Path to Profitability: Dragonfly Energy is targeting positive Adjusted EBITDA at a \$70 million annual revenue run rate.
Preliminary Q4 and FY2025 Financials: Net sales for Q4 were \$13.1 million, and full year sales were \$58.6 million. However, net losses remain substantial, with Q4 net loss at \$(45.0) million and FY2025 net loss at \$(69.9) million. Adjusted EBITDA losses were \$(3.8) million for Q4 and \$(11.8) million for FY2025.
Balance Sheet Strengthening: Cash and cash equivalents rose to \$18.3 million at year-end 2025, up from \$4.8 million in 2024, reflecting capital actions and debt restructuring.
Guidance for Q1 2026: Company expects revenue of \$9.5 million and adjusted EBITDA loss of \$4.6 million, citing ongoing softness in the RV market and slower ramp in trucking segment.

Detailed Financial and Strategic Review

Revenue and Segment Trends

Dragonfly Energy delivered strong year-over-year revenue growth, primarily fueled by OEM partnerships. OEM net sales for Q4 2025 reached \$8.1 million, up 30.1%, while DTC (Direct-to-Consumer) net sales declined by 18% to \$4.7 million, reflecting strategic deprioritization of DTC channels and macroeconomic challenges. Licensing fee revenue remained flat in the quarter but surged 139.8% for the year, indicating new licensing activity.

For the full year, OEM net sales jumped to \$36.9 million (up 33.8%), DTC sales fell to \$20.7 million (down 8.5%), and licensing revenue hit \$1.0 million. Total annual net sales were \$58.6 million, up 15.8%.

Profitability and Margin Analysis

Gross profit for Q4 was \$2.4 million, with a gross margin of 18.2% (down from 20.8% in Q4 2024 due to inventory adjustments and lower volumes). Full year gross profit increased 34.6% to \$15.6 million, with margin expansion to 26.7% (up 370 basis points), driven by higher sales volumes.

Operating expenses rose to \$12.6 million in Q4 (from \$9.7 million), primarily due to one-time debt restructuring costs and lease impairments. For the year, operating expenses were \$38.8 million, up slightly from \$37.4 million.

Net losses remain significant: \$(45.0) million in Q4 and \$(69.9) million for FY2025, with adjusted EBITDA losses at \$(3.8) million for Q4 and \$(11.8) million for FY2025. The company attributed part of the losses to inventory valuation adjustments and non-recurring expenses.

Strategic Cost Realignment Initiatives

In March 2026, Dragonfly Energy launched a major cost reduction program, aiming to save \$8.9 million annually. Key actions include:

Executive and Board Compensation: 20% reduction in cash compensation for executives and directors for the remainder of 2026 (from April 1), replaced with equity incentives, aligning interests with shareholders.
Workforce Adjustments: 20% reduction in payroll via targeted workforce reductions and salary cuts, with affected employees receiving equity compensation.
Discretionary Spending Cuts: Reduced marketing spend focused on DTC channels; shift towards commercial revenue growth.
Facility Consolidation: Rental space consolidation expected to save \$4.0 million.

These actions are intended to enhance operational efficiency and focus the company’s resources on commercial markets, including OEM, trucking, and industrial channels.

Balance Sheet and Capital Actions

Dragonfly Energy strengthened its balance sheet through capital raising and debt restructuring:

Cash and cash equivalents increased to \$18.3 million vs. \$4.8 million in 2024.
Notes payable (current and long-term) decreased significantly, reflecting repayments and conversion to preferred shares.
Preferred stock issuance and conversion actions, including \$25 million in notes converted to preferred stock.
Stockholders’ equity improved to \$11.5 million (vs. \$(9.4) million deficit in 2024).

Guidance and Outlook for Q1 2026

Management expects Q1 2026 revenue of \$9.5 million and adjusted EBITDA loss of \$4.6 million. Results are forecast to be impacted by softness in the RV market (especially January) and a slower-than-expected ramp in trucking. The company anticipates stabilizing activity and improved operating leverage as 2026 progresses.

Shareholder Considerations and Price-Sensitive Items

Substantial Net Losses: Despite revenue growth and margin improvement, the company continues to report large net losses and negative adjusted EBITDA, which may weigh on investor sentiment and share price.
Strategic Cost Reductions: The newly implemented cost realignment and executive compensation cuts may be viewed positively as they demonstrate management’s commitment to profitability and shareholder alignment.
Shift to Commercial Markets: The company’s strategic pivot toward OEM, trucking, and industrial markets (away from DTC) may affect future growth rates and revenue mix. Investors should monitor the success of these initiatives.
Balance Sheet Actions: Debt reduction and equity raises have improved liquidity and financial position, but preferred stock issuance and conversions may impact dilution and capital structure.
Preliminary Financials: All results are preliminary and subject to adjustment upon completion of the 2025 audit. Investors are cautioned to interpret the numbers carefully.
Guidance Risks: Q1 2026 guidance indicates continued losses and revenue softness, especially in RV and trucking segments. Any deviation from guidance could affect share price.
Forward-Looking Statements: Many statements are forward-looking and subject to risks, including market recovery, execution of commercial strategy, and success in new segments.

Additional Investor Information

Dragonfly Energy will host a webcast and conference call on March 16, 2026 at 4:30 PM ET to discuss these results. Investors may access the call live or via an archive on the company’s website.

The company remains focused on expanding OEM partnerships, improving operational efficiency, and achieving sustainable profitability. Its proprietary battery technology and dry electrode manufacturing process positions it for growth in energy storage, EV, and industrial markets.

Disclaimer

This article is based on preliminary financial results and management commentary from Dragonfly Energy Holdings Corp. All forward-looking statements are subject to risks and uncertainties, including market conditions, execution risks, and audit adjustments. Investors are advised to review the company’s official filings and consult their financial advisors before making investment decisions. The information provided is for informational purposes only and does not constitute investment advice.