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Fly-E Group, Inc. Third Quarter and Nine-Month Financial Overview for Fiscal Year 2026

Fly-E Group, Inc. (Nasdaq: FLYE) recently published its unaudited financial statements for the third quarter and the first nine months of the fiscal year 2026, ending December 31, 2025. With a focus on electric motorcycles, electric bikes, and electric scooters, Fly-E is at the forefront of the electric vehicle revolution. However, the latest financial results indicate both challenges and opportunities that the company is navigating within the market.

Third Quarter Highlights

In Q3 of fiscal year 2026, Fly-E reported net revenues of $2.6 million, a significant drop from $5.7 million recorded in the same period last year. The gross profit for this quarter was $1.0 million, reflecting a decrease from $2.6 million year-over-year, leading to a gross margin of 39.6%, down from 45.1%.

The company also reported a net loss of $1.9 million for the quarter, compared to a loss of $0.7 million in Q3 of the previous year. This translates to basic and diluted losses per share of $1.18, down from $2.78 in the same quarter last year, highlighting the company's ongoing struggle to maintain profitability.

CEO Mr. Zhou (Andy) Ou commented on the results, indicating that the company remains focused on its strategic execution and operational efficiency in a challenging consumer landscape. Notably, wholesale revenue surged by 153.4% to $1.8 million, and rental services revenue skyrocketed by 288.6% to $0.2 million, signaling growth in certain service areas despite the overall revenue decline.

Detailed Revenue Breakdowns

The sharp decline in Fly-E's retail revenue was primarily due to an 87% drop in electric vehicle sales, which also led to reduced selling prices aimed at clearing aged inventory. Retail sales revenue plummeted to $0.6 million from $4.9 million in the previous year, largely influenced by a series of lithium battery incidents that have raised safety concerns among customers. As potential buyers opted for traditional oil-powered vehicles over electric options, the company felt the impacts of market hesitation.

Interestingly, while retail revenues contracted, the increase in wholesale earnings was mainly attributed to additional purchases from disposed retail entities, as these stores continued to source products, boosting wholesale figures.

Cost Analysis and Operating Expenses

The cost of revenues for Q3 was $1.6 million, a decrease of 48.6% from the previous year, driven by lower sales volume.

Operationally, Fly-E reported total operating expenses of $2.6 million, representing a decrease from $3.5 million year-over-year. Selling expenses were reduced drastically by 62.3%, reflecting the impacts of fewer retail locations and a focused operational strategy. Moreover, general and administrative expenses rose by 20.3% to $1.9 million, mainly due to increased professional fees associated with legal matters and reporting requirements.

Nine-Month Performance Overview

For the nine months ended December 31, 2025, Fly-E reported net revenues of $11.9 million, a drop of 41.7% from $20.4 million last year. Notably, the total units sold fell sharply by 15,447 units. While retail revenue was down to $6.4 million from $17.7 million, wholesale revenue grew significantly to $5.0 million, a remarkable 89.5% increase.

Total operating expenses over this nine-month period were $8.4 million, indicating an overall decrease of 22.1%. However, the net loss increased to $5.7 million, which is an alarming rise of 184.4% from the prior year.

Conclusion

These financial results illustrate that Fly-E Group, Inc. is in a transitional phase, facing typical industry challenges, but also capitalizing on certain growth opportunities such as increased rental services and wholesale distribution. Future strategies aimed at building customer trust in electric vehicles, combined with a potential restructuring of retail outlets, will be crucial for the company's journey to recovery and sustained profitability. The dedication of shareholders and customer loyalty remains vital as the company navigates through this period of financial adjustment.

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