Dragonfly Energy (NASDAQ:DFLI) outlined a year of expanding OEM penetration, early commercial traction in heavy-duty trucking, and a set of cost and footprint actions aimed at improving profitability, as management reviewed preliminary fourth-quarter and full-year 2025 results on the company’s earnings call.
2025 results highlighted OEM growth and improved full-year profitability metrics
Chairman, President, and CEO Denis Phares said the company spent 2025 strengthening its financial foundation, expanding its commercial footprint, and validating its technology across multiple industries. For the full year, Dragonfly reported net sales up 16% to $58.6 million, driven primarily by OEM-channel growth. OEM revenue rose 34% year over year, which Phares attributed to continued integration of Dragonfly’s lithium power systems across a growing number of RV OEMs despite pressure in the broader RV market.
Fourth-quarter sales increased, while expenses and losses reflected one-time items
For the fourth quarter, management reported preliminary net sales of $13.1 million, up 6.9% year over year, citing strength in the OEM channel. OEM revenue increased about 30% as manufacturers continued integrating Dragonfly’s lithium systems at the factory level and the company expanded its customer base.
Direct-to-consumer (DTC) revenue fell to $4.7 million from $5.7 million, which management said reflected continued market headwinds and the company’s shifting focus toward OEM partnerships. On the call, Chief Commercial Officer Wade Seaburg described the DTC decline as “a continuation of that steady decline” that has been occurring for several years, adding that Dragonfly is prioritizing marketing and product development spending toward fleet, OEM, and systems-based opportunities.
Fourth-quarter gross profit was $2.4 million and gross margin was 18.2%, compared with $2.5 million and 20.8% a year earlier. Operating expenses rose 29.9% to $12.6 million, which included one-time expenses tied to debt restructuring. Net loss widened to $45 million from $9.8 million. Adjusted EBITDA was a loss of $3.8 million, compared with a loss of $2.3 million in the prior-year quarter.
Commercial updates: trucking validation, RV OEM expansion, and adjacent markets
Management emphasized progress in heavy-duty trucking, calling it a long-term opportunity even as the timing for meaningful revenue contribution has moved out. Seaburg said fleet engagement continues to progress and that the company is beginning to see “larger commitments emerge as fleets move beyond evaluation phases,” including deployments involving “hundreds of trucks per fleet” as 2026 progresses.
In the fourth quarter, Dragonfly received an initial production order from Werner Enterprises following an extended pilot program for its Battle Born DualFlow Power Pack. Seaburg described it as the company’s largest fleet deployment to date and said the order arrived during a prolonged freight recession in which many carriers have delayed capital spending.
Seaburg also noted the Battle Born DualFlow Power Pack received a SEAL Sustainable Product Award. He said the company’s systems are designed to reduce diesel idling during driver rest periods, and that in many deployments, fleets have seen idle time reduced by nearly 70%, preventing an estimated 10–12 metric tons of CO2 emissions per vehicle annually when deployed at scale.
In RV, Seaburg said Dragonfly ended 2025 with Battle Born batteries becoming standard across select model lineups at Airstream, Awaken RV, and Ember RV. In response to a question about early 2026 conditions, he said January demand was weaker than OEMs expected—consistent with RVIA data—leading OEMs to right-size inventory. He added that February and the first half of March showed some recovery, and that Dragonfly is seeing interest in expanded energy storage capacity tied to model-year changes. Seaburg said RVIA is projecting a flat overall market, while Dragonfly expects expansion in its energy-storage footprint within existing OEM relationships.
Dragonfly also pointed to adjacent markets. Seaburg highlighted rail, noting that the American Railway Engineering and Maintenance-of-Way Association (AREMA) recently approved what he described as the industry’s first lithium battery standard. He said Dragonfly’s partnership with National Railway Supply has begun introducing the company’s lithium systems into the rail market. In marine, he said World Cat expanded integration of Battle Born power systems into additional platforms after successful deployments in earlier models.
When asked about new product lines such as solar panels, Phares said the company has been moving toward “full systems” for industrial and RV OEM customers, helping increase per-unit revenue by supplying not only batteries but “the entire system in terms of the accessories.” He added that new products are contributing to revenue across segments, with the biggest impact coming from full-system incorporation.
Cost realignment, balance sheet actions, and path to positive adjusted EBITDA
Phares said the company completed several capital-raising transactions in 2025, including what he called a significant debt restructuring that improved liquidity and simplified the balance sheet.
He also detailed cost actions implemented earlier in March to better align resources with OEM trucking and industrial growth priorities and to better align incentives with shareholders. The plan includes:
- Leadership compensation reductions: Executive leadership and the board agreed to reduce cash compensation by about 20% for the remainder of fiscal 2026, effective April 1, 2026, with equity-based incentives provided in lieu of cash.
- Workforce and compensation adjustments: Selective workforce reductions and salary adjustments expected to reduce overall payroll expense by about 20%, with non-executive employees receiving equity-based compensation.
- Lower discretionary spending: Reduced discretionary spend, including lower DTC-focused marketing, as resources shift toward OEM trucking and industrial markets.
Management said the actions are expected to generate approximately $4.9 million in annualized cost savings. Phares added the company expects an additional $4.0 million in expense reduction through rental space consolidation, for a combined annual increase in adjusted EBITDA of $8.9 million.
Phares said the company expects to reach positive adjusted EBITDA as it approaches an annual revenue run rate of approximately $70 million.
Outlook: Q1 pressure, stabilization signs, and second-half trucking optimism
For the first quarter of 2026, management expects revenue of approximately $9.5 million and an adjusted EBITDA loss of $4.6 million. Phares said the quarter will reflect continued pressure from the broader economic environment—particularly in the RV market in January—and a slower-than-anticipated ramp in trucking, though he noted activity has shown signs of stabilizing since then.
On trucking conditions, Seaburg told analysts that his conversations with fleets align with expectations for a pickup later in the year, citing capital expenditures beginning to resume after “years of just not buying capital equipment.” He also pointed to the upcoming 2027 engine changes tied to new NOx emissions standards and said those engines are “showing higher idle rates,” which he believes increases the relevance of Dragonfly’s product. He said he is anticipating “a very exciting second half of the year” for the heavy-duty truck market.
Asked about exposure to lithium carbonate price volatility, Phares said the industry is susceptible to raw material increases, but Dragonfly had not experienced those to date. He added that potential increases could occur as the year progresses, though he characterized lithium carbonate as a relatively small component of the overall battery pack and said volatility could affect the broader industry over the next 12 months.
On cash burn, Phares said the company has been “very cognizant” of cash levels, addressed balance-sheet issues through last year’s fundraising, and is now focused on reducing spending while pursuing growth in adjacent markets and increased system uptake within RV OEMs—factors he said should support improved cash flow through 2026.
About Dragonfly Energy (NASDAQ:DFLI)
Dragonfly Energy Corp. is a designer and manufacturer of lithium iron phosphate (LiFePO4) battery systems geared toward mobile, residential and commercial energy storage applications. The company develops modular battery packs and integrated power management solutions that focus on safety, long cycle life and compact form factors. Dragonfly’s core product lineup includes 12-volt and 24-volt battery modules, as well as multi-unit rack systems tailored for backup power, solar energy storage and off-grid installations.
Serving a broad range of end markets, Dragonfly Energy’s batteries are commonly deployed in recreational vehicles, marine vessels, overland expedition setups and residential solar arrays.
