Flux Power's Robotics Bet and Software Pivot: A Turnaround Story or a Liquidity Squeeze?
The lithium battery maker trims costs, wins a global tech customer, and bets on SkyEMS 3.0 — but cash is thin and revenue is still falling.
FLUX · Earnings Call · 2026-08-20
A Tale of Two Trends
Flux Power's fiscal Q4 2026 call (reported 08/20/2026) was a study in contrasts: the company trimmed operating expenses by a third year-over-year, but revenue still fell more than half. The headline number – $8.2M in quarterly revenue, down from $16.7M a year ago – masks progress in new areas. The most striking announcement was the company's entry into the robotics vertical, through a collaboration with a very large global technology company.Management said they've already deployed 70 batteries for testing and are looking at full-scale production in Q1 or Q2 of next year. This is a genuine new vertical that could diversify a customer base heavily dependent on one material-handling account. The pivot doesn't stop there. In the same quarter, Flux announced it received official certification from Hyster-Yale for all three classes of forklifts – a market worth $3.5 billion in high sales revenue during fiscal 2025. As CEO Krishna Vanka noted, “This certification is for all of the Hyster-Yale Class I, II and III forklifts. These 3 classes of forklifts represented $3.5 billion in high sales revenue during their fiscal year 2025.” — Krishna Vanka, Chief Executive Officer · 2026-08-20 This opens a direct path to a much larger share of the North American lift-truck market, and combined with a new VP of sales focused on enterprise accounts, it gives the company multiple growth engines beyond its legacy dealer network.We are also very excited to announce we entered a new and growing vertical robotics in the last quarter. We are doing this in close collaboration with a very large global technology platform company.
From Hardware to Software
The other major strategic shift is the June 30 launch of Sky EMS 3.0, an AI-driven software platform that overlays predictive analytics on every battery Flux sells. The company has historically competed as a hardware manufacturer, but now it's embedding software to increase retention and eventually attach recurring revenue. As Krishna stated, “This software driven differentiation is difficult for hardware only vendors to replicate quickly and also strengthens our moat in the market.” — Krishna Vanka, Chief Executive Officer · 2026-08-20 The platform has already been defaulted on all GFC batteries sold to airline customers, and the company intends to extend it to every material-handling sale. It's a classic move to escape commoditization, but it also carries execution risk given the company's limited resources. This isn't entirely new – the company has been talking about software for several quarters. In the February call, CEO Krishna Vanka described the next-generation telematics product: “The SkyLink Telematics, which is really our next-generation product, as I mentioned, is significantly powerful, comes with the chip for machine learning and even implementing some AI.” — Krishna Vanka, Chief Executive Officer · 2026-02-12 But the full 3.0 release is a more mature and fully integrated version, and the company claims 90 platform enhancements in just six months.The Financial Reality
Behind these strategic shifts, the numbers remain painful. Quarterly revenue was $8.2M, down from $16.7M a year ago, and full-year revenue fell to $42.1M from $66.4M. Gross margins contracted to 27.4% in Q4, down from 34.5% a year earlier, though they were roughly flat sequentially. The company has been aggressive on cost: “We reduced operating expenses by 33% over the fourth quarter of fiscal 25 and a decrease of 28% when comparing full year 2026 versus 2025.” — Krishna Vanka, Chief Executive Officer · 2026-08-20 But even with those cuts, the company burned through cash and ended the quarter with just $300K on hand. Effective net cash stood at -$5M, and the cash runway is thin. Guidance for the coming quarters shows a near-term trough:This implies the Q4 sequential improvement may stall before recovering, and the company is reliant on the robotics customer and the Hyster-Yale certification to drive the rebound. The biggest overhang remains the capital freeze from their most significant material-handling customer, which management says is still in place. In the prior quarter's call, the tone was cautiously optimistic: “We are definitely seeing increased activity, and we believe we are coming back up from this quarter-picking up 20% this quarter-and then hopefully continuing that trend forward.” — Krishna Vanka, Chief Executive Officer · 2026-05-07 That optimism has given way to a more sober tone this quarter, but management maintains that the partnership is strong and expects business to resume. For investors, the stock has been a brutal performer – down 97% from its 2021 peak and another 45% in the last 90 days. The market is pricing in significant distress. The robotics opportunity is real but still unproven; the software pivot could add recurring revenue but won't move the needle short-term. The company is trading at just 0.5x revenue, but with negative cash flow and a near-zero cash balance, this is a high-risk turnaround. Execution on the robotics order, the OEM certification, and the eventual thawing of the capital freeze will determine whether Flux Power emerges as a larger, more diversified player or becomes another cautionary tale. The next two quarters will be critical.For the first quarter of 2027, we are currently expecting revenue to be down in the range of $6 million to $7 million However, expect the second fiscal quarter revenue to rebound and be in the range of $8 million to $9 million