Polar Power Reports Third Quarter 2025 Financial Results

Core Viewpoint - Polar Power, Inc. reported a significant decline in net sales and a net loss for the three months ended September 30, 2025, primarily due to reduced demand from its largest telecommunications customer and geopolitical factors impacting sales [2][10][20]. Financial Performance - Net sales decreased by 74% to $1.3 million compared to $4.9 million in the same period last year [2][10]. - The company experienced a gross loss of $2.26 million, a decrease of 259% from a gross profit of $1.42 million in the previous year [14][20]. - Operating expenses decreased by $0.22 million, but were offset by a $0.45 million impairment of right-to-use assets, leading to a net loss of $4.08 million compared to a net income of $0.01 million in the same period last year [2][20]. Sales and Market Dynamics - Sales to the largest U.S. telecommunications customer accounted for 63% of total net sales, up from 46% in the previous year, indicating increased reliance on this customer [11][12]. - The company's backlog increased to $5.3 million from $1.2 million, showing signs of improvement and diversification in sales [6]. Cost Structure and Margins - Cost of sales increased by 1% to $3.53 million, with cost of sales as a percentage of net sales rising to 277.5% from 71% in the previous year [13][14]. - The gross loss as a percentage of net sales was (177.5)% for the quarter, compared to a gross profit percentage of 29% in the same period last year [14]. Operational Adjustments - The company has reduced sales and marketing expenses by 21% to $198,000, and R&D expenses decreased by 9% to $157,000, reflecting cost-cutting measures [15][16]. - General and administrative expenses decreased by 16% to $807,000, primarily due to a reduction in staff [17]. Strategic Outlook - The CEO highlighted that geopolitical uncertainty and restructuring in the telecom sector have impacted short-term sales, but recovery in the telecom sector and growth in microgrids and EV charging are expected to provide a more sustainable growth platform [9]. - The company is focusing on diversifying its product offerings into microgrids, electric vehicle charging, and foreign military markets to broaden its market opportunities [8].