Conferencia de resultados del primer trimestre fiscal de 2027 de Flux Power (FLUX): caen los ingresos y se emiten previsiones para el Q2-Q3

Puntos clave

• Flux Power (NASDAQ: FLUX) informó de unos ingresos de 6,8 millones de dólares en el primer trimestre fiscal de 2027, por debajo de los 8,2 millones de dólares del trimestre anterior y de los 13,2 millones de dólares de un año antes.
• El margen bruto cayó al 24,8% frente al 27,4% del trimestre anterior y al 28,6% interanual, lo que refleja la mezcla de productos, un menor apalancamiento operativo y mayores gastos de garantía como porcentaje de los ingresos.
• La pérdida neta se amplió a 3,2 millones de dólares, o 0,15 dólares por acción. El EBITDA ajustado fue negativo en 2,6 millones de dólares.
• Un cliente importante que había pausado sus pedidos reanudó las compras a través de un OEM. Flux Power también logró 25 pedidos de nuevos clientes, lo que representa aproximadamente 750.000 dólares en nuevos ingresos.
• La dirección prevé unos ingresos de entre 7 y 8 millones de dólares para el segundo trimestre fiscal y de entre 9 y 10 millones de dólares para el tercer trimestre fiscal, basándose en un pronóstico de ventas ponderado por probabilidad.
• El efectivo al cierre del trimestre era de 0,4 millones de dólares. La empresa está evaluando alternativas de financiación y alianzas estratégicas, mientras que su prestamista le exige captar al menos 4 millones de dólares en capital neto.

Resultados financieros clave

Rendimiento comercial y operativo

La reanudación de los pedidos de un cliente importante adelantó ingresos respecto a las expectativas previas de la dirección para el primer trimestre del año natural 2027. Sin embargo, la dirección señaló que aún es demasiado pronto para determinar el volumen o la regularidad de los futuros pedidos de dicho cliente.

Flux Power recibió 25 pedidos a través de socios OEM por parte de nuevos clientes, por un valor aproximado de 750.000 dólares. La empresa también está impulsando tres grandes programas con OEM. Un OEM se está preparando para realizar pruebas formales, otro ha introducido las baterías de Flux Power en un ciclo de pruebas aceleradas y la compañía está ampliando su colaboración en toda la red de distribuidores de Hyster-Yale.

Cinco OEM y dos distribuidores importantes están evaluando programas de marca blanca basados en la Serie S. Un socio OEM existente añadió la S8 a su sistema CRM para distribuidores, lo que la dirección prevé que genere aproximadamente 1 millón de dólares en negocio durante los próximos dos trimestres.

La demanda de sustitución está surgiendo a partir de la base instalada. Flux Power recibió un pedido inicial de segunda ronda por valor de más de 0,5 millones de dólares de un fabricante multinacional de equipos de minería y movimiento de tierras, y la dirección prevé más de 1 millón de dólares en pedidos adicionales en 2027. Los datos de SkyEMS se están utilizando para identificar las baterías que se aproximan a su sustitución.

La empresa también se dirige a las 500 cuentas de usuarios finales más grandes de América del Norte. La dirección prevé que esta campaña contribuya significativamente durante la segunda mitad del año fiscal 2027, al tiempo que complementa los canales de OEM y distribuidores.

En el área de robótica, una plataforma tecnológica global continúa realizando pruebas de campo con las baterías C48 de Flux Power. La dirección prevé pedidos a escala de producción el próximo año, sujetos a las pruebas y a la optimización del producto.

Las nuevas iniciativas de productos incluyen la detección integrada de gases para baterías de equipos de asistencia en tierra para aeropuertos y las alertas de carga y ubicación de baterías SkyVOX. Se espera que los envíos iniciales de detección de gases a un cliente del sector aerolíneas comiencen en el primer trimestre del año natural 2027, mientras que los envíos de SkyVOX están programados para comenzar durante el trimestre actual.

Flux Power está rediseñando su cadena de suministro basándose en ensamblajes integrados y socios globales de suministro. La dirección señaló que el modelo busca respaldar el crecimiento de la producción de cientos a miles de unidades con un menor coste por unidad, conservando internamente la ingeniería, el diseño y el control de calidad.

Previsiones de la dirección

La dirección prevé unos ingresos de 7 a 8 millones de dólares para el segundo trimestre fiscal de 2027 y de 9 a 10 millones de dólares para el tercer trimestre fiscal de 2027.

El pronóstico se basa en una cartera de ventas ascendente (bottom-up) y ponderada por probabilidad que abarca tanto a clientes nuevos como existentes. El director financiero Kevin Royal declaró que las oportunidades incluidas en las previsiones tienen una alta probabilidad de cierre, pero la empresa sigue enfrentándose a un menor volumen de pedidos relacionado con tipos de interés más altos, precios del combustible más elevados y condiciones económicas generales más exigentes.

La dirección afirmó que la organización actual está dimensionada en gran medida para respaldar unos ingresos anuales de hasta 60 millones de dólares. Es posible que se requieran entre tres y cinco empleados adicionales a medida que crezcan los ingresos.

La empresa tiene como objetivo volver a márgenes brutos superiores al 30% mediante un mayor volumen y la optimización de la cadena de suministro. Se trata de un objetivo de la dirección y no de una previsión formal de márgenes, y los resultados trimestrales siguen siendo sensibles a la mezcla de productos.

Riesgos y aspectos a vigilar

• El efectivo y equivalentes de efectivo se limitaban a 0,4 millones de dólares al cierre del trimestre. El prestamista de Flux Power exige a la empresa captar al menos 4 millones de dólares en capital neto.
• La empresa prevé utilizar su línea de capital comprometido y está evaluando otras alternativas de financiación y alianzas estratégicas. También se necesitará capital adicional para respaldar el crecimiento previsto.
• Los patrones de pedidos futuros por parte del cliente principal que ha reanudado sus compras siguen siendo inciertos a pesar del último pedido.
• Los tipos de interés más altos, los precios del combustible más elevados, los aranceles y las restricciones de capital de los clientes continúan afectando a la actividad de compra.
• Los menores volúmenes de producción redujeron el apalancamiento operativo y aumentaron los costes indirectos y de mano de obra no absorbidos.
• Los programas con OEM requieren pruebas y certificaciones antes de que puedan comenzar pedidos significativos, lo que genera incertidumbre sobre los plazos y la conversión.

Puntos destacados de la sesión de preguntas y respuestas con analistas

La dirección aclaró que las previsiones de ingresos para el segundo y tercer trimestre fiscal reflejan una cartera ponderada por probabilidad en lugar de limitarse solo a una cartera de pedidos firmes. La mezcla de ingresos prevista incluye tanto a clientes existentes como nuevos.

En cuanto al cliente principal que reanudó sus compras, el consejero delegado Krishna Vanka afirmó que el nuevo pedido refuerza la confianza en que Flux Power sigue siendo el socio elegido por el cliente, pero la dirección aún no tiene visibilidad sobre un ritmo de pedidos regular.

La dirección prevé los primeros pedidos de los programas con OEM en desarrollo hacia el final del año fiscal 2027, sujeto al éxito de las pruebas y certificaciones.

En relación con los márgenes, la dirección reconoció que el negocio con OEM puede conllevar menores márgenes unitarios. Su estrategia consiste en compensar esa presión mediante mayores volúmenes, aprovisionamiento integrado y escala de producción, con el objetivo de restaurar el margen bruto por encima del 30%.

La empresa indicó que probablemente se requerirá una mayor inversión en fondo de maniobra a medida que crezcan los ingresos. Prevé recurrir en parte a su línea de capital comprometido mientras lleva a cabo la ampliación de capital requerida por su prestamista.

Transcripción completa de la conferencia de resultados

Transcripción completa de la conferencia de resultados

Comentarios de la dirección

Operator

Good afternoon, and welcome to Flux Power's Fiscal First Quarter 2027 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded today, November 3, 2026. I would now like to turn the call over to Leanne Sievers of Shelton Group Investor Relations. Leanne, please go ahead.

Leanne Sievers

Good afternoon, and welcome to Flux Power's Fiscal First Quarter 2027 Earnings Conference Call. I'm Leanne Sievers, President of Shelton Group, Flux Power's Investor Relations firm. Joining me today from Flux Power are Krishna Vanka, CEO; and Kevin Royal, Chief Financial Officer.

Before I turn the call over to Krishna, I'd like to remind our listeners that during the course of this conference call, the company will provide financial guidance, projections, comments and other forward-looking statements regarding future market developments, the future financial performance of the company, new products or other matters. These statements are subject to the risks and uncertainties that we discuss in detail in our documents filed with the SEC, specifically our 10-K and our most recent 10-Q, which identify important risk factors that could cause actual results to differ materially from those contained in the forward-looking statements.

Also, the company's press release and management statements during this conference call will include discussions of certain adjusted or non-GAAP financial measures. These financial measures and related reconciliations are provided in the company's press release and related current report on Form 8-K, which can be found in the Investor Relations section of Flux Power's website at www.fluxpower.com. For those of you unable to listen to the entire call at this time, a recording will be available via webcast on the company's website.

And now it's my pleasure to turn the call over to Flux Power's CEO. Krishna, please go ahead.

Krishna Vanka

Thank you, Leanne, and thanks, everyone, for joining our call today. This quarter, we continue to make meaningful progress according (sic) [ across ] our key business and sales initiatives while executing with discipline and positioning the company for accelerated growth. Let me start with a significant win that captures the commercial momentum we are building. I'm very excited to announce that the significant customer who had paused orders with us for the last few quarters has placed an order this quarter through our OEM. Although it's too early to predict how future orders will trend with this customer, we are very excited to see their commitment to use Flux Power products as they continue their journey towards clean energy.

Notably, we had not forecasted this business until the first quarter of calendar 2027. Securing it now pulls meaningful revenue forward. It also speaks to the accelerating pace of lithium-ion adoption among large fleet operators and their confidence in our products. In addition to this order, we also received 25 orders through our OEM partners from first-time Flux Power customers, representing approximately $750,000 in new revenue. Each new customer broadens our base and gives us a foundation for future fleet expansion and replacement business.

I also want to share with you additional updates on several strategic fronts. As you know, under the new management team, we have lowered product and operating costs while also optimizing our supply chain by creating a modular design. We also refreshed our sales leadership that have expanded our OEM relationships and launched new marketing programs aimed at diversifying our customer base. Our business today looks very different from a year ago.

Let me talk more about how we are transforming the business through supply chain optimization. Instead of traditional way of working with existing vendors and trying to get more margin with individual components, we are now extending our reach to other global partners, allowing us to move to a more integrated approach. That means combining key components into fewer, more unified assemblies and delivering a combination of components folded into one unit that provides us with the benefit of scale and buying power. This will help us stay competitive among market pricing pressures and allow us to use our S-Series products as an anchor product to win new OEMs with our white-label initiative.

With our existing infrastructure, this model will help us to move from producing hundreds of units to thousands at a better cost per unit, allowing for higher volume at higher gross margin and a faster path to profitability. Our goal always remains the same. Flux Power owns the engineering, the design and the quality standard and the world-class support we are known for. I would also like to highlight early momentum across our sales channels that is translating into commercial traction. 9 months ago, we hired a Director of OEM Business Development to expand into new OEMs and strengthen our long-standing partnerships.

OEM partnerships typically take time, but the progress has been remarkable. 3 large OEM programs are advancing, including 1 OEM preparing to formally test that could lead to certification. Another OEM has our batteries in an accelerated test cycle and has authorized us to begin outreach to its dealership network. Within the Hyster-Yale network, we have held 5 meetings with a major Midwest dealer in just the past 2 weeks and presented to the full sales team of a major Canadian dealership network. This matters because dealer adoption scales. Once leadership commits, Flux Power gets in front of every branch, fleet manager and salesperson in that network. One relationship becomes dozens of points of sale and that multiplies our reach without adding to our cost structure.

We are also seeing this in our installed base. 7 years ago, we replaced the incumbent lead battery solution across the nationwide operations of a multinational earthmoving and mining equipment manufacturer. That fleet is now entering its replacement cycle, and we have received the first second-round order valued at well over $0.5 million with an additional $1 million plus anticipated in 2027. These orders are being driven directly by SkyEMS, which lets us identify, battery by battery, which units are ready for replacement. Rather than competing for replacement cycle, we anticipate it with data.

To complement our OEM and dealer partner efforts, our new VP of Sales has launched a go-to-market campaign targeting the 500 largest end user accounts in North America. This initiative addresses a structural opportunity in our model. Historically, Flux Power has reached end users primarily through OEM and dealer partners. This campaign adds a direct, enterprise-level dialogue with the operators of largest fleets. These are organizations where standardization decisions are made centrally and where a single relationship can translate into deployments across many sites. Importantly, it is designed to complement our dealer and OEM partners, not to compete with them. We expect this campaign to contribute meaningfully in the back half of our fiscal year.

We are also pursuing new avenues for growth. As I mentioned earlier, we are using the S-Series as an anchor product to open doors with new OEMs and dealer networks through white-label solutions tailored to their use cases. Today, 5 OEMs are evaluating Flux Power white-label programs and 2 major dealers are exploring white-label partnerships. We have also extended the platform with 2 new S24 configurations. One of our leading OEM partners added the S8 to its dealer CRM system, which we expect to generate approximately $1 million in new business over the next 2 quarters.

I also discussed last quarter that we are converting early wins in high-growth new verticals, most notably robotics. Our customer, a global technology platform, is continuing field test of their new robots with our C48 batteries. Both engineering teams are working very closely in optimizing the batteries for their use case, and we anticipate seeing production-level orders next year. We are also looking at other potential use case in this new and exciting vertical. Robotics is a compelling growth opportunity that sits squarely at the intersection of Flux Power's core strengths; lithium-ion power systems, battery intelligence and fleet performance. As industrial operations become more increasingly automated, it extends our capabilities into one of the fastest-growing segments of autonomous material handling.

Alongside the S-Series expansion, we are also growing through product innovation. Last week, we announced 2 additions that raise the value of every battery we sell. First, integrated gas detection for our airport GSE batteries developed with a major airline. Safety drives buying decisions on the ramp, so this strengthens our competitive position in GSE. First shipments to an airline customer are expected in the first quarter of calendar 2027. We also plan to offer a retrofit program, which creates a new revenue opportunity across batteries already in the field.

Next, SkyVOX, which adds battery location and charging alerts to our fleet intelligence platform. SkyVOX adds content to each battery sale and connects more customers to SkyEMS, the same data platform that is already helping us anticipate replacement orders. Shipments for SkyVOX begin this quarter. Growing market demand. With all of this progress taken together, these developments reflect a commercial strategy that is beginning to compound. As macroeconomic headwinds ease, we expect to capitalize on pent-up demand and leading indicators suggest that demand is beginning to release.

One of our long-standing OEM partners recently reported second quarter bookings of $680 million, more than double the prior year and its fourth consecutive quarterly increase led by the Americas. Its management has described the first half of 2026 as the bottom of the cycle. Industry analysts at Interact Analysis forecast U.S. forklift orders to grow 3% to 5% this year with global orders up to 6%. Battery decisions follow truck orders. So the trucks being booked today become battery opportunities for Flux Power in 2027.

At the same time, customers are also prioritizing safety, space optimization and sustainability and the labor equation increasingly favors lithium. The industry loses more than 30 million labor hours a year changing lead acid batteries at a time when operators are hard to find. We are seeing proof that lithium-ion will become the dominant battery technology in the coming years, and we are building a scalable framework to capture that opportunity. We are encouraged by our pipeline entering the second quarter and remain focused on disciplined execution.

With that, I'll now turn the call over to our CFO, Kevin Royal, who will review our first quarter financial results in more detail. Kevin, please go ahead.

Kevin Royal

Good afternoon, everyone. Revenue for the first fiscal quarter of 2027 was $6.8 million, down from $8.2 million in the prior quarter and compared to $13.2 million in the same quarter a year ago. The decrease was primarily driven by lower spending by one of our key customers and broader economic conditions, including higher interest rates and higher fuel prices that are impacting the order patterns of our customers. Gross margin for the first fiscal quarter of 2027 was 24.8% compared to 27.4% in the prior quarter and 28.6% in the first quarter of 2026. The decrease in gross profit as a percentage of revenue was largely due to changes in product mix, a loss in operating leverage due to lower volumes resulting in higher unabsorbed labor, and overhead and an increase in warranty expense as a percentage of revenue.

Operating expenses in the first quarter were $4.6 million, an increase from $4.4 million in the prior quarter and $5.9 million in the same quarter a year ago. The 22% year-over-year decrease in operating expenses primarily reflects the benefit of our previous actions to reduce headcount and streamline our operating model. Net loss for the first quarter was $3.2 million or $0.15 per share compared to a net loss of $2.3 million or $0.11 per share in the prior quarter and a net loss of $2.6 million or $0.15 per share in the first fiscal quarter of 2026.

On a non-GAAP basis, excluding stock-based compensation costs, the first quarter net loss was $3 million or $0.14 per share compared to a net loss of $2.1 million or $0.10 per share in the prior quarter and a net loss of $2.4 million or $0.14 per share in the same quarter a year ago. Adjusted EBITDA for the first quarter was negative $2.6 million compared to negative $1.6 million in the prior quarter and a negative $1.7 million in the prior year period.

Turning to the balance sheet. We ended the quarter with cash and cash equivalents of $0.4 million compared to $0.3 million in the prior quarter. We are currently evaluating potential financing alternatives and strategic partnerships to ensure the company has the financial flexibility necessary to continue executing on its operating strategy. We expect to provide additional updates over the coming weeks.

Before turning the call over to Krishna, I want to provide some insight around our near-term revenue expectations. Based on the improved order activity that Krishna highlighted in his comments, we expect fiscal second quarter revenue to be in the range of $7 million to $8 million, and we expect our fiscal third quarter revenues to be in the range of $9 million to $10 million. To reiterate my earlier comments, we continue to experience lower order volumes as a result of broader economic conditions, including higher interest rates and higher fuel prices that are impacting the order patterns of our customers.

Now I'll turn the call back to Krishna for closing comments before we open it to your questions.

Krishna Vanka

Thank you, Kevin. I'm proud that the team was able to achieve $6.8 million as we committed to you on the last call. This was accomplished even in the face of the capital freeze at our most significant customer, tariffs and the war that has resulted in higher fuel prices. This was not an easy considering these 3 factors, but the future is looking stronger and momentum is building. As I detailed today, there is a lot of great progress happening on our OEM partnerships and with our sales acceleration programs. These are the areas where our supply chain optimization is going to be a real game changer for this company and will be an important lever for improving gross margin and scaling efficiently.

As we look to the future, our team is focused on executing our strategy to reposition the company towards profitability, supported by the following 4 factors: number one, transforming the business. We have lowered product and operating costs, improved operating efficiencies, optimizing supply chain to improve margins and manufacturing scalability. We also refreshed sales and OEM leadership team, expanded OEM relationships and launched aggressive new marketing programs aimed at diversifying our customer base. Number two, early momentum. We have achieved certification with a new major OEM, increased our addressable market within electric material handling with the new models. We made a significant platform leap with the launch of AI-driven SkyEMS 3.0, further positioning Flux Power as a differentiated technology provider.

Number three, new avenues for growth. We have also developed and are currently executing a strategy to leverage our S-Series as an anchor product to approach new OEMs and dealership networks. By providing unique white-label solutions for their use cases, we are creating new avenues for accelerated and predictable growth engines. Number four, growing market demand. And lastly, we are seeing the proof that lithium-ion will become the dominant battery technology in the coming years. This is happening while Flux Power continues to build a scalable framework to capture this potentially significant market opportunity.

With that, let's open the call to questions. Operator?

Operator

[Operator Instructions] The first question today comes from Amit Dayal with H.C. Wainwright.

Preguntas y respuestas

Amit Dayal

Just on the outlook first, the $7 million to $8 million and $9 million to $10 million for 2Q and 3Q, is that based on some concrete backlog? Or is that just the visibility you have based on discussions you're having with customers?

Kevin Royal

Yes. So it's based on our sales forecast, which is developed from a bottoms-up technique using the discussions that our sales force are having with their customers and applying probability to those -- to the pipeline. In order to make its way into that forecast for Q2 and Q3 for the numbers that we provided, it would have a very high level of probability of actually closing.

Amit Dayal

Understood. And is this mostly with some existing customers? Or are there some new customers as a part of this mix?

Kevin Royal

It's really a combination of new and existing customers.

Amit Dayal

Okay. And then maybe just a last question for me. The balance sheet, is the cash you have sufficient to, sort of, meet various operating needs and investment needs, et cetera? Like how are you managing that side of the story? You also said you could be looking for strategic partnerships in the press release. Can you just give us any sense of what options are in front of you to, sort of, address this kind of overhang on the story?

Kevin Royal

Sure. So we recently filed an 8-K where we disclosed that our lending partner is requiring that we raise at least $4 million net capital. And as I mentioned in my prepared remarks, we are working through that process, and we have good options ahead of us to fulfill that requirement.

Operator

The next question comes from Rob Brown with Lake Street Capital Markets.

Robert Brown

Just wanted to follow up again on the kind of the resumption of the customer ordering patterns, and I think that helps your kind of outlook. But how much visibility do you have now on the resumption of ordering activity at that customer? And is this sort of a kind of an ongoing resumption? Or do you have visibility kind of beyond this quarter?

Krishna Vanka

So -- hello, as I mentioned, this came as a surprise for us, a pretty good surprise that they came forward and placed an order for this quarter. This, sort of, helps us build the confidence that this customer is willing to work with us once they resume the order patterns next year. As I mentioned, we are not 100% sure on how much and the regular ordering pattern, but we are getting a sense that they are resuming to place the orders and that they would like to move forward with Flux Power when they're ready to go. So it's more of a confidence builder for us and the visibility that we are their chosen partner as they resume placing the orders.

Robert Brown

Okay. Great. And then on your white-label efforts, I think you said you had 3 large programs going. How does that ramp? And when do you expect to see kind of revenue from those efforts?

Krishna Vanka

Yes. Thanks. Great question. So yes, we expanded our OEM reach. And, yes, we are working with 3 major OEMs. One of them, as I mentioned, is testing the battery. The other one put us in their accelerated cycle. The third one is the Hyster-Yale where we are now working with the dealerships. The first 2, I would say, are in halfway through the process, testing being the critical component of an OEM saying, yes, we want to use your batteries. Once we pass the test phase, then we'll be working closely with the OEM.

And we actually got one of those 2 OEMs where we are already socializing with the dealership networks, our products, our solutions. So we're trying to do this as fast as we can, obviously. But generally, I would anticipate towards the later part of the -- towards the end of the fiscal year, we'll start seeing some orders coming from these OEMs.

Operator

The next question comes from Craig Irwin with ROTH Capital Partners.

Craig Irwin

First, I should say congratulations on the resumption of orders from your major customer. It's a very nice development. And I guess we're all rooting for them to take lots of product going forward. Krishna, my question I wanted to ask you is about a year ago, you made the difficult decision to retrench -- to reduce your frictional costs, your cost structure with the falloff in demand that you saw in your end market. Can you maybe talk to us about the recent expense burden, SG&A and R&D, how this could change the [ revenue ]. You are guiding for gentle growth over the next couple of quarters, but do you expect the changes that you made to be more structural, variable as we look at the impact on the financial model?

Kevin Royal

So Craig, this is Kevin. As revenues pick up, there will be some -- a few select additions that we would need be -- to make in order to support that growth, but we're talking about very few. We, in large part, are sized for growth that would go on an annual basis up to $60 million. But again, with the exception that we'd probably have to add 3 to 5 personnel, which would not -- in the operating expense categories, which we wouldn't see as significant.

Craig Irwin

Okay. Fantastic. So I like the conversation about all of the different things you're doing with OEM customers, both directly and with the dealerships. When I step back from that, I look at the OEM channel is often not as lucrative on a gross margin basis versus the direct sales channel. There are elements of variability, and obviously, lithium-ion is quite different to lead acid. But can you talk through around margin expectations over the next few quarters and sort of longer-term potential of these OEM customers? Is it feasible for us to see margins back in the mid-30s the way they were 1.5 years ago?

Krishna Vanka

Yes, definitely. So again, what you are seeing quarter-over-quarter, the margin variation is really because of the mix. Our approach with OEMs is actually twofold. One is obviously to get new OEM business, but as I also informed, we are working on supply chain optimization where we are able to work with global partners in bringing higher-value components together, which will give us further margins on the same products.

So while it is true that an OEM would probably reduce the margin, as you said, the volume increase is there, which can nicely offset if we optimize our supply chain. So that's the strategy we are taking is to get more OEMs, get to a more scalable supply chain. More importantly, we don't add any extra resources to be able to supply in thousands of units compared to the hundreds of units and ultimately bring back those margins to what you said, 30-plus points.

Craig Irwin

Okay. Excellent. And then last question, if I may, I guess, for Kevin. You've done a really good job taking working capital out of the company over the last couple of years. It's a tight ship, right? You've really got this on the right path. Is there much potential of more cash out from working capital? Or do we maybe need a little bit of cash to support the growth that's likely to materialize over the next several quarters?

Kevin Royal

Yes. I would say the latter, that there is a need, and we've recognized that. We've worked with our lender. We've got a plan moving forward to raise some capital. We currently have an equity line of credit, a committed equity facility, and we plan to lean on that. That's fully disclosed, and it's a way for us to raise capital, much-needed capital as we move forward.

Craig Irwin

Understood. Well, we look forward to watching your progress.

Operator

This concludes our question-and-answer session. I would like to turn the conference back over to Krishna Vanka for any closing remarks.

Krishna Vanka

Thank you all again for joining today's call. We really enjoyed speaking to you, giving you the updates, and we look forward for the fiscal Q2 call in February 2027. Operator, you may now disconnect.

Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.