Company Overview - Orion Energy Systems focuses on helping customers achieve sustainability, energy savings, and carbon footprint reduction goals through innovative technology and service[7] - The company operates in lighting (retrofit), EV charging, and maintenance segments, targeting industrial, commercial, retail, automotive, and public sector vertical markets[16] - Orion offers turnkey solutions, product sales, maintenance services, and EV charging installations as revenue streams[16] Macro Environment & Business Units - Macro factors influencing Orion's business include energy prices, climate/ESG concerns, EV infrastructure development, regulatory landscape (BAA/BABA compliance), and LED penetration rates[19, 20, 21] - Orion's business units include Lighting (focused on commercial & industrial retrofit), Maintenance (lighting and electrical services with 3-year recurring revenue contracts), and EV Charging Systems (turnkey installation with recurring revenue)[23] Lighting Solutions & Case Study - Orion's lighting solutions offer substantial energy cost reduction with an average payback of 1-4 years[26] - A case study at CLARIOS's 100,000 sq ft facility in Florence, KY, involved installing 800 fixtures, resulting in 814,084 kWh annual energy reduction, $54,869 annual energy cost reduction, and 218 tons annual carbon dioxide reduction[33, 36] - The company emphasizes BAA & BABA compliant products, ensuring domestic materials and American labor for federal and state/municipal/school projects[37, 38, 39] EV Charging & Market Opportunity - Orion acquired Voltrek in October 2022, a premier reseller of EV charging stations, managing over 4,000 charging ports[62] - The US needs approximately 28 million EV charging ports by 2030 to support an estimated 33 million electric vehicles[73] - A fleet project example includes a $400,000 Voltrek turnkey installation of 6 DC ChargePoint Fast Charger Stations for Haverhill High School's EV Transit Vans[77, 79] Financial Performance - In Q1 FY26, revenue was $19.6 million, and the gross margin was 30.1%[89, 91] - The company's liquidity in Q1 FY26 was $14 million, with a working capital of $17.4 million[91] - Adjusted EBITDA for Q1 FY26 was $0.206 million[94]

Financial Data and Key Metrics Changes - The company reported a 29% increase in annual revenue and a 38% increase in adjusted EBITDA for 2024 [7] - Fourth quarter results showed a 21% increase in revenue and a 59% increase in adjusted EBITDA [8] - Gross margin for the quarter was 12.5%, significantly lower than expected due to unanticipated cost overruns impacting gross profit by approximately $20 million [22] Business Line Data and Key Metrics Changes - Revenue from the projects business grew by 21%, while energy asset revenue increased by 31% due to a greater number of operating assets [20][21] - O&M revenue grew by 9%, and revenue from other business lines increased by 14% [21] - Total project backlog increased by 24% year-over-year to a record $4.8 billion [25] Market Data and Key Metrics Changes - The company generated over $250 million in revenue from its expanding European business in 2024 [19] - Federal projects represent approximately 20% of the company's 2024 revenue, with ongoing demand expected despite some project pauses [12][17] Company Strategy and Development Direction - The company aims to continue growing its recurring energy asset and O&M businesses, which now account for the majority of annual adjusted EBITDA [18] - The company is expanding geographically, with operations in every U.S. state, Canada, the U.K., and a growing presence in Continental Europe [19] - The company is focused on executing its project backlog and generating cash flow while navigating the transition of the federal government [41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to execute in a dynamic environment, citing strong demand for budget-neutral solutions that provide cost savings and infrastructure improvements [42] - The company anticipates potential delays and disruptions due to changes in the federal government but believes the fundamental drivers of its federal projects remain strong [17][41] Other Important Information - The company ended the quarter with approximately $109 million in cash and reduced total corporate debt to $243 million [27] - The company expects to place approximately 100 to 120 megawatts of energy assets in service in 2025, with expected CapEx of $350 million to $400 million [34] Q&A Session Summary Question: Customer Conversations Since January - Management noted that activity remains strong, especially in the Federal sector, with several active RFPs despite some slowness in civilian projects [50] Question: Deployment of Energy Assets in 2025 - Management indicated that supply chain issues could affect deployment but overall market conditions remain favorable [52] Question: Pause in ESPC Projects - The pause is specific to GSA projects as they evaluate asset sales, but management expects continued value from ESPCs under the current administration [58] Question: Federal Revenue in 2025 Guidance - Management confirmed that federal revenue is included in the 2025 guidance, with a focus on 12-month contracted projects [98] Question: Impact of EPA Staffing Cuts on RNG - Management expressed confidence in the certification process for RNG projects, noting that the administration appears supportive of biofuels [106]