Energy Focus 2025 Q2 Earnings Narrowed Losses and Revenue Decline

Energy Focus (EFOI) reported its fiscal 2025 Q2 earnings on August 12, 2025, showing a notable reduction in losses but a significant drop in revenue. The company’s results reflected a challenging operating environment, particularly in the military segment, while commercial sales showed resilience. The earnings did not include revised forward guidance, and the performance was mixed with respect to market expectations.

Energy Focus reported a 26.4% year-over-year decline in revenue, with total net sales reaching $1.14 million in Q2 2025 compared to $1.55 million in Q2 2024. The company’s product offerings saw varied performances, with commercial products contributing $773,000 and MMM products generating $348,000. The setup service segment added a modest $22,000 to the total revenue, while the products segment accounted for the largest share at $1.12 million.

The company's earnings improved year-over-year, with a net loss of $-231,000 in Q2 2025, a 58.3% reduction compared to $-554,000 in Q2 2024. On a per-share basis, losses narrowed to $0.04 per share, representing a 66.7% improvement from $0.12 per share. While the reduction in losses is positive, the continued net negative earnings indicate the company is still operating at a loss.

Energy Focus’s stock price demonstrated mixed performance in the short term. The shares edged up 2.04% on the latest trading day and 1.01% for the most recent full trading week. However, the stock plummeted by 23.08% month-to-date, indicating significant volatility. A strategy of buying shares after the earnings report and holding for 30 days yielded moderate returns but underperformed the market. The strategy's CAGR was 2.67%, underperforming the benchmark by 38.40 percentage points, while the 109.49% volatility highlighted the risks associated with the stock.

CEO Chiao Chieh (Jay) Huang attributed the 26.4% revenue decline to ongoing federal budget uncertainties and delays in new defense contract activity, which led to a 71.0% drop in military sales. In contrast, commercial sales rose 117.7%, driven by a high-dollar uninterruptible power supply (UPS) project in Taiwan. The company managed to improve its gross profit margin to 12.9% in Q2 2025, up from 8.1% in the prior year, despite a decline from 31.5% in Q1 2025. Huang emphasized cost efficiency and commercial market opportunities as strategic priorities moving forward.

Energy Focus has not provided explicit forward-looking guidance for revenue, earnings, or other financial metrics in the Q2 2025 earnings report. The company’s commentary highlights ongoing challenges in the military market due to federal budget uncertainties and underscores the importance of commercial sales and cost controls as strategic priorities. No specific numerical expectations or qualitative guidance beyond current performance was stated.

Additional News
In the week following Energy Focus’s earnings release, several notable news items emerged from Nigeria. The Federal Government withdrew its criminal complaint against a passenger accused of unruly behavior aboard an Ibom Air flight and reduced the flight ban imposed on a local airline. Meanwhile, the Lagos State Government announced a two-day traffic diversion in Ikoyi to accommodate infrastructure work. In security-related news, the Nigerian Air Force reported over 1,500 operational flight hours and the destruction of over 592 terrorists in Borno State. Political developments included Anambra State Governor Charles Soludo publicly endorsing President Bola Tinubu ahead of the 2027 elections, citing a 22-year friendship and economic reforms. Additionally, the Nigerian Correctional Service highlighted a critical shortage of doctors to treat mentally ill inmates, underscoring a growing public health concern.