1. FLYE's net revenue decreased 42.7% to $3.9 million this quarter. 2. Gross profit dropped 66.4%, reflecting retail sales challenges. 3. Wholesale revenue rose 91.3%, indicating a shift in business focus. 4. Net loss of $1.8 million is 55.4% higher than last year. 5. Operational efficiency improved with a 51% reduction in operating expenses.
FAQ
Why Bearish?
The significant revenue drop and increased net loss signal financial strain, similar to market reactions in 2022 when FLYE experienced sales declines leading to stock price drops.
How important is it?
The financial results directly impact investor perception and can lead to stock volatility, particularly in an Electric Vehicle market with rising safety concerns.
Why Short Term?
Immediate financial results are poor, which could affect investor sentiment and stock performance in the short term, similar to market reactions after negative earnings reports.
Fly-E Group, Inc. Reports Second Quarter and First Half Financial Results for Fiscal Year 2026
Fly-E Group, Inc. (Nasdaq: FLYE), a company specialized in electric vehicles including motorcycles, bikes, and scooters, has released its unaudited financial results for the second quarter and first half of fiscal year 2026, which ended on September 30, 2025. The results reveal a challenging period marked by significant fluctuations in revenue and operations.
Second Quarter Financial Summary
- Net Revenues: $3.9 million, down from $6.8 million year-over-year, a decline of 42.7%.
- Gross Profit: $1.0 million, a decrease of 66.4% from $2.9 million over the same period last year.
- Gross Margin: 25.0%, down from 42.6% in the previous year.
- Net Loss: $1.8 million, compared to a loss of $1.1 million year-over-year.
- Losses per Share: Basic and diluted losses per share were $2.18, versus $4.65 in the same period last year.
CEO Remarks on Strategic Focus
Mr. Zhou (Andy) Ou, Chairman and CEO of Fly-E, shared insights on the company's performance, stating, "We navigated the second quarter of fiscal year 2026 with discipline and focus, despite a challenging retail environment." Mr. Ou pointed out the significant progress in the wholesale segment with wholesale revenue rising by 91.3% year-over-year to $1.7 million, reflecting a strategic pivot towards this area. Furthermore, he noted that the rental business recorded a gross margin of 79.8%, positioning it as a potential profitability driver moving forward.
Difficult Market Conditions Impacting Revenue
The decline in net revenues can largely be attributed to a 61% drop in average unit prices of electric vehicles as Fly-E adjusted prices to clear aged inventory. Retail sales revenue plunged to $2.0 million, indicating a 65.8% drop from previously reported figures. This downturn has been exacerbated by incidents of lithium-battery accidents affecting consumer confidence in E-Bikes and E-Scooters, leading many customers to pivot towards oil-powered vehicles.
Despite these challenges, Fly-E's strategic focus on wholesale sales has bolstered revenue from disposed entities during this quarter, contributing positively to wholesale revenue.
Operating Expenses and Cost Management
Total operating expenses for the second quarter decreased by 51.0% to $2.0 million. This reduction reflects a more streamlined operational approach, including:
- Selling Expenses: Fell to $1.0 million, a 49.7% reduction year-over-year.
- General and Administrative Expenses: Decreased to $1.0 million, down 52.4%.
This cost-cutting initiative is in part due to closed retail operations, which also contributed to a decrease in payroll and rent expenses.
First Half of Fiscal Year 2026 Overview
For the first half of fiscal year 2026, Fly-E reported net revenues of $9.2 million, marking a 37.2% decrease from $14.7 million in the same period last year. This downturn resulted from a significant drop in units sold, including a 641-unit decrease in motorcycles and a 5,332-unit decrease in battery sales.
Future Outlook
As Fly-E Group, Inc. continues to navigate market challenges, the company aims to enhance profitability through improved operational efficiency, a robust product and service portfolio, and strategic focus on high-margin segments like rental services. The management remains optimistic about potential growth despite the current retail environment.