Orion Reports Improved Q3’25 Gross Margin of 29.4% (+490 bps), Reduced Net Loss, Break-even Adjusted EBITDA and Improved Cash and Liquidity on Revenue of $19.6M; Reduces FY 2025 Revenue Outlook

Core Viewpoint - Orion Energy Systems, Inc. reported a decline in revenue for Q3'25 and updated its FY'25 revenue outlook to a range of $77 million to $83 million, reflecting project delays and market softness, but highlighted improvements in cost structure and gross margins [1][9][13]. Financial Performance - Q3'25 total revenue was $19.6 million, down 29% from $26.0 million in Q3'24, with LED lighting revenue at $13.2 million, EV charging revenue at $2.4 million, and maintenance revenue at $3.9 million [2][17]. - Gross profit for Q3'25 was $5.8 million, with a gross margin of 29.4%, an increase of 490 basis points from 24.5% in Q3'24 [2][17]. - Net loss for Q3'25 improved to $(1.5) million, or $(0.05) per share, compared to a net loss of $(2.3) million, or $(0.07) per share in Q3'24 [2][19]. Business Developments - The company added seven new customers/projects with an estimated revenue potential of $100 million to $200 million over the next five years, enhancing its project pipeline [5][6]. - Orion plans to reorganize its business into two Commercial Business Units (CBUs) to better align sales, marketing, and product development activities [11][12]. - The company expects to achieve double-digit revenue growth and positive Adjusted EBITDA performance in FY'26, supported by a strong project backlog and new maintenance service opportunities [16]. Cost Management - Orion has reduced its annual revenue breakeven point by 25% to a range of $78 million to $85 million, down from approximately $105 million to $115 million over the past two years [6][8]. - Operating expenses decreased by $1.4 million to $7.0 million in Q3'25, driven by fixed cost reductions and a decrease in Voltrek earnout expense accruals [18][19]. - The company achieved positive cash flow from operating activities of $3.8 million in Q3'25, with cash and liquidity position improving to $7.5 million [22][24]. Market Outlook - Orion's FY'25 revenue outlook reflects the impact of project timing changes, with expected Q4'25 revenue between $19 million and $25 million [13]. - The company anticipates a strong year-end close for its Voltrek EV charging segment, benefiting from delayed projects related to Eversource Energy's 'EV Make Ready' program [10][13]. - Recent contracts expected to contribute to future revenue include a multi-year LED lighting retrofit contract worth $12 million to $18 million and a contract extension valued at $23 million to $30 million [14][20].