Core Points - Orion Energy Systems, Inc. will participate in Singular Research's 19th Annual Best of the Uncovereds Conference on December 11, 2025 [1] - CEO Sally Washlow will present virtually and be available for one-on-one investor meetings during the event [2] Company Overview - Orion specializes in energy efficiency and clean tech solutions, including LED lighting, EV charging solutions, and maintenance services [3] - The company focuses on turnkey design-through-installation solutions for large national customers and projects through ESCO and distribution partners [3] - Orion is committed to helping customers achieve business and environmental goals while reducing carbon footprints and enhancing business performance [3][4]

Core Viewpoint - Orion Energy Systems, Inc. (OESX) has shown a significant price increase of 41.2% over the past four weeks, with a mean price target of $17.83 indicating a potential upside of 26.4% from the current price of $14.11 [1] Price Targets and Analyst Consensus - The average price target for OESX ranges from a low of $15.00 to a high of $20.00, with a standard deviation of $2.57, suggesting a variability in analyst estimates [2] - The lowest estimate indicates a 6.3% increase, while the highest suggests a 41.7% upside [2] - A low standard deviation indicates strong agreement among analysts regarding the stock's price movement direction [9] Earnings Estimates and Analyst Optimism - Analysts have shown increasing optimism about OESX's earnings prospects, as evidenced by a strong consensus in revising EPS estimates higher [11] - Over the last 30 days, the Zacks Consensus Estimate for the current year has increased by 57.1%, with two estimates moving higher and no negative revisions [12] - OESX holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates [13] Caution on Price Targets - While price targets are a common metric for investors, relying solely on them for investment decisions may not be prudent due to potential biases in analyst estimates [3][10] - Analysts often set optimistic price targets influenced by business relationships, which can lead to inflated expectations [8]

Core Viewpoint - Orion Energy Systems, Inc. (OESX) has shown a significant price increase of 26.6% over the past four weeks, with a mean price target of $17.83 indicating a potential upside of 75.2% from the current price of $10.18 [1] Price Targets and Analyst Estimates - The mean estimate consists of three short-term price targets with a standard deviation of $2.57, where the lowest estimate of $15.00 suggests a 47.4% increase, and the highest estimate of $20.00 indicates a potential surge of 96.5% [2] - A low standard deviation among price targets suggests a strong agreement among analysts regarding the stock's price movement, which can serve as a starting point for further research [9] Earnings Estimates and Analyst Sentiment - There is increasing optimism among analysts about OESX's earnings prospects, as indicated by a strong consensus in revising EPS estimates higher, which correlates with potential stock price increases [11] - The Zacks Consensus Estimate for the current year has risen by 42.3% over the past month, with no negative revisions, indicating positive sentiment [12] - OESX holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates, suggesting a strong potential for upside [13] Caution on Price Targets - While the consensus price target is a commonly referenced metric, relying solely on it for investment decisions may not be prudent due to historical inaccuracies in price predictions by analysts [3][7] - Analysts often set optimistic price targets influenced by business relationships, which can lead to inflated expectations [8] - Investors should approach price targets with skepticism and consider them as one of many factors in their decision-making process [10]

Core Insights - Orion Energy Systems, Inc. will participate in the Craig-Hallum Alpha Select Conference on November 18, 2025, in New York City [1] - The CEO and CFO of Orion will be available for one-on-one investor meetings during the event [2] Company Overview - Orion specializes in energy efficiency and clean tech solutions, including LED lighting, EV charging solutions, and maintenance services [3] - The company focuses on turnkey design-through-installation solutions for large national customers and projects through ESCO and distribution partners [3] - Orion is committed to helping customers achieve business and environmental goals while reducing carbon footprints and enhancing business performance [3] Sustainability Commitment - Orion emphasizes responsible operations across all areas of the organization, highlighting its sustainability and governance priorities [4]

Revenue Performance - Product revenue increased by 3.6% to $12.813 million, while service revenue rose by 1.6% to $7.106 million for the three months ended September 30, 2025[129]. - Total revenue for the same period reached $19.919 million, reflecting a 2.9% increase compared to $19.361 million in the prior year[129]. - Total revenue for the first six months of FY2026 was $39.494 million, a 0.6% increase from $39.267 million in FY2025, driven by a 4.7% increase in product revenue[138]. - Service revenue decreased by 6.8%, or $1.0 million, to $13.169 million in the first six months of FY2026 compared to FY2025[138]. Profitability and Margins - Gross profit increased by 38.1% to $6.177 million, with gross margin improving from 23.1% to 31.0% due to higher revenue in the EV and maintenance segments[129]. - Gross profit increased by 37.7% to $12.078 million in the first six months of FY2026, with gross margin improving from 22.3% to 30.6%[138]. Expenses - Cost of service revenue decreased by 17.3% to $4.965 million, primarily due to restructuring efforts made in fiscal 2025[129]. - General and administrative expenses decreased by 16.5% to $3.812 million, attributed to the absence of Voltrek earnout expenses and reduced wages[130]. - Sales and marketing expenses fell by 16.6% to $2.376 million, mainly due to decreased wages and benefits from restructuring[131]. - Research and development expenses decreased by 29.6% to $231,000 compared to the previous year[132]. Segment Performance - Lighting segment revenue decreased by 1.6%, or $0.2 million, to $10.664 million in Q2 FY2026 compared to Q2 FY2025, with an operating loss reduced by 33.4% to $853 thousand[134]. - Maintenance segment revenue increased by 18.3%, or $0.7 million, to $4.491 million in Q2 FY2026, with operating income rising by 257.4% to $554 thousand[135]. - EV segment revenue increased by 0.8%, or $39 thousand, to $4.764 million in Q2 FY2026, with operating income improving by 275.3% to $1.059 million[136]. - Maintenance segment revenue for the first six months of FY2026 increased by 19.2%, or $1.4 million, to $8.488 million, with operating income rising to $683 thousand[144]. - EV segment revenue decreased by 12.8%, or $1.1 million, to $7.460 million in the first six months of FY2026, but operating income improved by 188.3% to $737 thousand[147]. Cash Flow and Liquidity - Cash and cash equivalents decreased to approximately $5.2 million as of September 30, 2025, from $6.0 million at March 31, 2025, due to a $1.3 million debt repayment[149]. - Cash provided by operating activities was $1.304 million in the first six months of FY2026, compared to a cash outflow of $2.464 million in the same period of FY2025[151]. - Cash used in financing activities was $1.8 million in the first six months of fiscal 2026, primarily due to payments on the revolving credit facility and long-term debt[154]. - Cash provided by financing activities was $2.5 million in the first six months of fiscal 2025, mainly from a term loan, partially offset by payments on the revolving credit facility and long-term debt[155]. - Net working capital as of September 30, 2025, was $8.1 million, with current assets of $32.0 million and current liabilities of $24.0 million[156]. - The borrowing base under the revolving credit facility supported approximately $14.1 million of availability as of September 30, 2025, with $5.8 million drawn against it[158]. Other Financial Information - The company expects customer concentration to remain around 24.3% for fiscal 2025, with efforts to diversify its customer base ongoing[127]. - The company completed a 1-for-10 reverse stock split on August 22, 2025, to comply with Nasdaq's Minimum Bid Price Rule[120]. - An estimated liability of approximately $1.4 million has been accrued for the remaining earnout amount related to the acquisition of Voltrek[121]. - Backlog totaled $18.2 million as of September 30, 2025, expected to be recognized as revenue within one year[166]. - Monthly principal payments of $25,000 on the Senior Subordinated Note will begin on January 15, 2026, increasing to $50,000 on July 15, 2026[163]. - The final Remaining Earnout Amount could exceed the current accrued liability and materially affect future liquidity[165]. - The credit agreement includes a springing minimum fixed cost coverage ratio of 1.0 to 1.0 when excess availability falls below $4.0 million, which is currently not required[160]. - The company has no off-balance sheet arrangements[167].

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Financial Data and Key Metrics Changes - Orion reported Q2 2026 revenue of $19.9 million, a slight increase from $19.4 million in Q2 2025, with a gross profit margin rising to 31% from 23.1% year-over-year, reflecting an 800 basis point improvement [8][17] - The net loss improved to $0.6 million or $0.17 per share from a net loss of $3.6 million or $1.10 per share in Q2 2025, indicating better financial performance [17] - Adjusted EBITDA turned positive at $0.5 million in Q2 2026 compared to a negative $1.4 million in Q2 2025, marking the fourth consecutive quarter of positive adjusted EBITDA [17] Business Line Data and Key Metrics Changes - The LED lighting segment revenue decreased by 2% to $10.7 million in Q2 2026 from $10.8 million in Q2 2025, impacted by lower ESCO channel sales despite increased project activity [13] - Maintenance segment revenue increased by 18% to $4.5 million in Q2 2026 from $3.8 million in Q2 2025, benefiting from new customer contracts and expanded existing relationships [15] - EV charging solutions revenue was $4.8 million in Q2 2026, slightly up from $4.7 million in Q2 2025, reflecting the completion of a significant project [15] Market Data and Key Metrics Changes - The Dodge Momentum Index report indicated that commercial, industrial, and public sector construction planning is 33% ahead of year-ago levels, suggesting a positive outlook for the lighting market [6] - The EV charging market outlook improved with the federal declaration of $5 billion in government EV charging funds, boosting confidence in the sector [7] Company Strategy and Development Direction - Orion aims to achieve three milestones in fiscal 2026, including maintaining its NASDAQ listing, implementing a growth profitability and cost containment initiative, and reaching $84 million in revenue with positive adjusted EBITDA for the full fiscal year [4][5] - The company is focusing on expanding its LED lighting distribution business and enhancing its electrical infrastructure offerings, integrating various services to meet customer demands [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about sustainable and profitable growth beginning in the second half of the fiscal year, driven by ongoing improvements in cost control and operational efficiency [4][11] - The company anticipates modest growth in LED lighting and electrical maintenance revenues, with flat to slightly lower EV charging revenues for the fiscal year [18] Other Important Information - Orion's total operating expenses declined to $6.4 million in Q2 2026 from $7.7 million in Q2 2025, reflecting ongoing cost control measures [16] - The company issued $1 million of common stock and made $875,000 in cash payments to partially satisfy an earn-out obligation during the quarter [18] Q&A Session Summary Question: What is the outlook for the EV business given recent government clarity? - Management noted an increase in enterprise customers integrating EV charging into their projects, with ongoing expansion in utility programs and infrastructure work [19] Question: Are there plans for geographic expansion in the EV segment? - The company is looking at geographic expansion and has hired personnel to lead efforts in new areas, particularly where EV infrastructure work is prominent [22] Question: Can you clarify the $42 million-$45 million recurring revenue potential? - This figure represents the total over the life of a three-year contract renewal with a major customer [22] Question: What are the expectations for gross margins moving forward? - Management indicated that while improvements are expected, gross margins are likely to remain in the high 20s to low 30s range, depending on revenue mix and sales volumes [24] Question: How much revenue headwind was faced due to the unprofitable maintenance contract? - The headwind from the unprofitable contract was estimated to be less than $500,000, as the company is growing in other areas [29] Question: Is the maintenance business a lead generator for product sales? - Yes, the maintenance business is seen as a lead generator, providing insights and opportunities for additional sales in lighting and EV segments [32]

Core Insights - Orion Energy Systems, Inc. (OESX) reported a quarterly loss of $0.17 per share, significantly better than the Zacks Consensus Estimate of a loss of $0.72, marking an earnings surprise of +76.39% [1] - The company posted revenues of $19.92 million for the quarter ended September 2025, missing the Zacks Consensus Estimate by 2.74%, but showing a year-over-year increase from $19.36 million [2] - The stock has gained approximately 12.7% since the beginning of the year, underperforming compared to the S&P 500's gain of 15.1% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.42 on revenues of $20.74 million, and for the current fiscal year, it is -$1.86 on revenues of $83.26 million [7] - The estimate revisions trend for Orion Energy Systems was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Building Products - Lighting industry, to which Orion Energy Systems belongs, is currently ranked in the bottom 18% of over 250 Zacks industries, suggesting a challenging environment for the stock [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact investor sentiment [5]

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Financial Performance - Q2'26 total revenue increased to $19.9 million, up from $19.4 million in Q2'25, reflecting a growth of approximately 2.6% year-over-year[4] - Net loss narrowed to $(0.6) million in Q2'26 from $(3.6) million in Q2'25, representing an improvement of $3.0 million[4] - Adjusted EBITDA for Q2'26 was $0.5 million, marking the fourth consecutive quarter of positive adjusted EBITDA, compared to a loss of $(1.4) million in Q2'25[5] - Net loss for the six months ended September 30, 2025, was $1,825,000, a decrease from a net loss of $7,383,000 in the same period of 2024, indicating improved financial performance[33] - The company reported a basic net loss per share of $0.17 for the three months ended September 30, 2025, compared to $1.10 for the same period in 2024[29] - Net income for the three months ended September 30, 2025, was a loss of $581 million, compared to a loss of $3,625 million for the same period in 2024[35] Revenue Breakdown - Maintenance revenue grew by 18% to $4.5 million in Q2'26, up from $3.8 million in Q2'25, due to new customer contracts and expanded relationships[2] - EV charging revenue was $4.8 million in Q2'26, relatively flat compared to Q2'25, with expectations for slight declines in FY'26 due to market uncertainties[20] - Orion reiterated its FY 2026 revenue growth outlook of approximately 5%, targeting $84 million, which is expected to lead to positive adjusted EBITDA for the full fiscal year[5] - Significant new business wins included $11 million in public sector lighting and $7 million in LED lighting for major automotive industry facilities[7] Cost Management - Gross profit margin improved by 790 basis points to 31.0% in Q2'26 compared to 23.1% in Q2'25, driven by product mix and cost improvements[4] - Orion's operating expenses decreased to $6.4 million in Q2'26 from $7.7 million in Q2'25, reflecting ongoing cost containment efforts[18] - Operating expenses for the six months ended September 30, 2025, were $13,333,000, down from $15,475,000 in the same period of 2024, reflecting cost management efforts[29] - The company continues to face pressures to reduce selling prices of its lighting products due to increased competition, which may negatively impact gross margins[29] Assets and Liabilities - Cash and cash equivalents decreased to $5,155,000 as of September 30, 2025, down from $5,972,000 at the end of March 2025[32] - Total assets decreased to $47,902,000 as of September 30, 2025, compared to $52,463,000 as of March 31, 2025[32] - Total liabilities decreased to $36,520,000 as of September 30, 2025, from $40,579,000 as of March 31, 2025, indicating improved financial stability[32] Operational Changes - The company is currently implementing a new ERP system, which may involve substantial costs and potential operational disruptions[29] - The company is expanding its Voltrek EV Charging field sales and service presence to the Southeastern United States, establishing a new office in Jacksonville, FL[15] Other Financial Metrics - EBITDA for the latest quarter was $269 million, a significant improvement from a negative EBITDA of $2,691 million in the same quarter last year[35] - Adjusted EBITDA increased to $451 million, up from $32 million in the previous year, indicating a strong operational performance[35] - Stock-based compensation expenses were $157 million, slightly down from $180 million in the same quarter of 2024[35] - The company incurred restructuring costs of $0 in the latest quarter, compared to $163 million in the same quarter last year[35] - Severance costs decreased to $25 million from $158 million year-over-year, reflecting improved workforce management[35] - Interest expenses for the quarter were $280 million, compared to $283 million in the same quarter of the previous year[35] - Depreciation expenses were $263 million, an increase from $278 million in the same quarter of 2024[35] - The company reported no deferred cost write-offs for ATM in the latest quarter, while it had $0 in the same quarter last year[35] - Earnout expenses were $0 in the latest quarter, down from $630 million in the same quarter of the previous year, indicating a reduction in contingent liabilities[35]