30.1% Gross Margin and Lower Operating Expenses Enable Orion to Generate Positive Adjusted EBITDA on Q1’26 Revenue of $19.6M; Reiterates FY 2026 Outlook

Core Viewpoint - Orion Energy Systems, Inc. reported a slight decline in total revenue for Q1'26 but maintained a positive outlook for FY 2026, projecting a revenue growth of approximately 5% to $84 million, which could lead to positive adjusted EBITDA for the fiscal year [1][11]. Financial Performance - Q1'26 total revenue was $19.6 million, down 2% from $19.9 million in Q1'25, with LED lighting revenue increasing by 1% to $12.9 million, EV charging revenue decreasing by 30% to $2.7 million, and maintenance revenue rising by 21% to $4.0 million [2][7][23]. - Gross profit for Q1'26 was $5.9 million, a 37% increase from $4.3 million in Q1'25, resulting in a gross profit margin of 30.1%, up from 21.6% in the prior year [2][14]. - The net loss improved to $1.2 million in Q1'26 from $3.8 million in Q1'25, with net loss per share improving from $(0.12) to $(0.04) [2][16]. - Adjusted EBITDA for Q1'26 was $0.2 million, compared to a loss of $(1.8 million) in Q1'25, marking the third consecutive quarter of positive adjusted EBITDA [2][6][16]. Segment Performance - LED lighting revenue showed resilience with a slight increase, while the EV charging segment faced challenges due to a tough comparison with the previous year and a slowdown in project activity [5][7]. - Maintenance services revenue increased significantly, reflecting new customer contracts and expanded relationships with existing customers [23]. Strategic Initiatives - The company is focusing on enhancing its LED lighting distribution business with new products and improved go-to-market strategies, aiming for a return to growth [8]. - Orion has secured contracts worth up to $7 million for electrical infrastructure and LED lighting projects from automotive customers, indicating strong customer relationships and confidence in future business [9]. Outlook - Orion anticipates a revenue growth of 5% for FY 2026, which should position the company to achieve positive adjusted EBITDA, with potential upside if economic and policy uncertainties stabilize [11][12]. - The company is optimistic about its project pipeline, including a multi-year LED lighting retrofit contract expected to generate $12 million to $18 million over several years [13].