Polar Power (POLA 1.68%), a provider of DC (direct current) power systems for the telecom, military, and renewable energy sectors, released its second quarter 2025 earnings on August 15, 2025. The report revealed a significant drop in both revenue and profitability on a GAAP basis compared to the same period last year, with GAAP revenue of $2.7 million and a net loss of $0.11 per share (GAAP). There were no analyst estimates available for the quarter, but results reflected declining momentum across core markets, with international sales and telecom revenue under particular pressure. Revenue and margin pressures were evident, with top-line contraction.
| Metric | Q2 2025 | Q2 2024 | Y/Y Change |
|---|---|---|---|
| Revenue | $2.7 million | N/A | N/A |
| Gross Profit | $0.9 million | $1.8 million | (49.2%) |
| Operating Expenses | $1.0 million | $1.4 million | (24.3%) |
| Net Income | N/A | $0.5 million | -100.0% |
| EPS – Basic and Diluted | $(0.11) | $0.20 | N/A |
Understanding Polar Power’s Business and Strategic Priorities
Polar Power manufactures DC power solutions, focusing on reliable backup and primary power for customers in telecom, military, and other mission-critical markets. Its portfolio includes base power units, hybrid power systems, and solar hybrid solutions compatible with diesel, natural gas, LPG (liquefied petroleum gas), and renewable fuels. This flexibility lets the company address shifting regulatory requirements and customer preferences for cleaner or more resilient energy systems.
In recent years, Polar Power has emphasized product diversification and the expansion of its customer base. The company aims to reduce dependence on single markets—especially telecom—by increasing its presence in military and international markets, and by introducing new products such as mobile electric vehicle (EV) chargers and microgrid solutions. Key to its success are sales execution, innovative technology, and building a resilient distribution network that includes resellers and service providers.
Quarter in Detail: What Happened and Why It Matters
The period saw GAAP revenue fall 42%, driven mainly by lower telecom and international sales—a decline underscored by management’s own comments. Telecom customers contributed 92% of total net sales, down slightly from 95% in Q2 2024, showing continued heavy dependence on one end-market. At the same time, international sales made up just 3% of total net sales, compared to 25% in Q2 2024. Management noted that “Sales to customers outside of the U.S. represented 3% of total net sales in Q2 2025, compared to 25% in Q2 2024,” highlighting a sharp erosion of geographic diversification.
Gross profit (GAAP) dropped by nearly half from the prior-year quarter, reflecting both the steep revenue shortfall and margin pressure. Operating expenses fell 24%, signaling cost-cutting measures, but these cuts were not enough to prevent an operating loss. The company reported a GAAP net loss of $0.3 million, translating into a GAAP EPS of $(0.11), compared with positive earnings in the prior year.
Other notable trends included a continued increase in aftermarket parts and services sales, which were up 288% year over year. Military customer sales also doubled as a share of revenue, though the segment remained small at just 6% of the total compared to 3% in Q2 2024. The decline in international sales was particularly acute, with management citing the near disappearance of overseas contributions—sales to customers outside of the U.S. fell to 3% of total net sales in Q2 2025 from 25% in Q2 2024—and slower field trial progress due in part to geopolitical factors such as civil unrest in Sudan.
Balance sheet trends raised further concerns. Cash and cash equivalents at the end of the period were $0.18 million (GAAP), while accounts payable more than doubled to $0.86 million as of June 30, 2025. The company’s line of credit rose to $5,302,000 from $4,797,000 at the end of 2024, as reported on the balance sheet for June 30, 2025. Inventories (GAAP) remained nearly flat at $13.0 million as of June 30, 2025, signaling limited product movement. The combination of negative operating cash flow and increased borrowings points to heightened liquidity risk if new sales initiatives do not begin to provide results in the coming periods.
Looking Forward: Management Outlook and Investor Considerations
Management provided qualitative commentary on strategic objectives but did not offer specific guidance on financial results for future periods. Leadership reiterated a focus on improving sales and marketing, diversifying the customer base, and launching new technologies. A notable pipeline development is the planned release of a 30 kW mobile EV charger, expected in the fourth quarter. This new product expands the company’s addressable market into electric vehicle infrastructure—an area aligned with broader trends toward electrification and renewable energy.
No financial forecasts, revenue targets, or earnings estimates were provided for the remainder of the year or upcoming quarters. Investors will need to monitor progress on product launches, effectiveness of the new reseller distribution strategy, and especially signs of stabilization or recovery in core and international sales. With low cash reserves, increasing debt, and ongoing losses, execution on these priorities is likely to be critical for the company’s near-term outlook.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
