Energy Focus reported a sharp third-quarter rebound, swinging to profit as sales rose on a large expansion of its uninterruptible power supply business with a new customer in Taiwan. The quarter also benefited from a customs-duty refund, while the increase in cash included short-term borrowings and favorable timing between customer receipts and supplier payments.
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Sales rose to $4.8 million, up 481.2% from $0.8 million a year earlier. Commercial sales increased by $4.3 million, or 2,115.8%, driven primarily by the Taiwan UPS business, including installation and setup work.
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Revenue increased 28.1% from the second quarter, to $4.8 million from $3.7 million. Commercial sales rose by about $2.2 million sequentially, partly offset by a $1.4 million decline in military sales. Setup-service revenue was $254,000, compared with $4,000 in the prior quarter, largely tied to the Taiwan project.
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Gross margin improved to 20.5%, from 17.8% a year earlier and negative 6.8% in the second quarter. Higher commercial sales and a more favorable product mix helped. The quarter also included a roughly $184,000 refund from U.S. Customs and Border Protection for previously paid duties, recorded as a reduction in cost of goods sold.
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Energy Focus posted operating income of $500,000, compared with an operating loss of $200,000 a year earlier and $900,000 in the second quarter. Net income was also $500,000, or 8 cents per basic and diluted share, versus losses of $200,000, or 3 cents per share, a year earlier and $900,000, or 14 cents per share, in the second quarter.
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Cash was $3.3 million at September 30, up from $1.1 million at the end of 2025 and $900,000 a year earlier. The company attributed the increase partly to $900,000 of short-term borrowings and to customer payments arriving before related supplier payments were due.
The results show how strongly the quarter’s sales and return to profitability were tied to the Taiwan customer and UPS project. The reported margin also received a boost from the customs refund, while the higher cash balance partly reflects borrowing and payment timing rather than operations alone.