Dragonfly Energy Holdings Corp.

What they do

Dragonfly Energy designs, assembles, and tests lithium iron phosphate (LFP) battery packs and related power system components in the United States, selling under the Battle Born Batteries brand. It sources LFP cells from a limited number of suppliers and offers integrated battery management systems, heating capability, and Dragonfly IntelLigence monitoring. The company also resells accessories like chargers and inverters, and has a licensing agreement with Stryten Energy for the Battle Born brand in B2B sales.

Revenue drivers

• OEM sales — Largest revenue segment, $8.4 million in Q2 2026 (64% of net sales), primarily from RV OEMs integrating lithium storage systems.
• Direct-to-consumer (DTC) — $4.5 million in Q2 2026 (34% of net sales), sold through Battle Born brand, supporting aftermarket and brand awareness.
• Licensing fees — $0.25 million in Q2 2026, from the Stryten Energy brand licensing deal expected to generate $30 million over seven years.

Recent performance

In Q2 2026, net sales were $13.2 million, down 19% year-over-year, with OEM sales declining 16.1% and DTC down 24.7%. Gross margin improved to 33.0% from 28.3%, aided by a $1.1 million tariff refund benefit. Net loss attributable to common shareholders was $5.5 million, and Adjusted EBITDA was $(1.6) million, a $3.0 million improvement sequentially. Annual revenue has declined from $86.3 million in 2022 to $58.6 million in 2025, with net losses widening to $69.9 million in 2025.

Strategy

The company is shifting focus from DTC to OEM, fleet, and industrial channels, prioritizing high-volume integrated solutions. Management highlights the Battle Born DualFlow Power Pack for heavy-duty trucking and expects trucking revenue to more than double sequentially in Q3 as fleet programs expand. It recently acquired Dakota Lithium assets to broaden product portfolio and diversify beyond RV and trucking. Cost reduction actions, including facility consolidation, are driving operational improvements, with a target of positive Adjusted EBITDA at a $70 million annual net sales run rate.

Risks

• Debt covenant and liquidity risk — Failure to comply with loan agreement covenants could allow lenders to accelerate payment, potentially requiring asset sales or bankruptcy.
• Supplier concentration — Reliance on two suppliers for LFP cells and a single supplier for battery management systems creates disruption risk.
• Key customer dependence — Business growth depends on the success and needs of existing customers, including RV OEMs, which are subject to industry cyclicality.
• Solid-state development delay — Significant engineering challenges could delay or prevent the commercialization of solid-state battery cells, which are not yet revenue-generating.

Outlook

Management expects Q3 2026 revenue to be higher than Q2, driven by more than doubling of heavy-duty trucking revenue as Stevens Transport deliveries ramp. The Dakota Lithium acquisition is expected to contribute meaningful revenue and be accretive to Adjusted EBITDA starting in Q4. The company reaffirms its target of positive Adjusted EBITDA at a $70 million annual net sales run rate. Debt amendments preserve about $1 million of near-term liquidity and defer covenant requirements until September 2027.