Orion Energy Systems (NASDAQ:OESX) reported fiscal 2026 third-quarter results highlighted by higher revenue, improved profitability, and its fifth consecutive quarter of positive adjusted EBITDA, while management raised its full-year fiscal 2026 outlook and provided initial expectations for fiscal 2027.
Management highlights and updated milestones
CEO Sally Washlow told investors the company has delivered five straight quarters of positive adjusted EBITDA and said Orion has achieved two of the three milestones she outlined on the prior earnings call: maintaining its Nasdaq listing and enacting a “growth, profitability, and cost containment initiative.”
Guidance raised for FY2026 and initial FY2027 outlook
Orion raised its fiscal 2026 outlook to $84 million to $86 million in revenue with positive adjusted EBITDA, up from its prior outlook of about $84 million in revenue at or approaching positive adjusted EBITDA. CFO Per Brodin added that the company now expects positive adjusted EBITDA for the full fiscal 2026 year, which ends March 31.
For fiscal 2027 (beginning April 1), Orion said it expects “up and to the right” profitable growth, forecasting $95 million to $97 million in revenue with positive adjusted EBITDA.
Project activity and growth initiatives
Washlow highlighted recent orders and expanding scope within existing customers. She pointed to an exterior lighting project valued at $14 million to $15 million that begins in the current fiscal fourth quarter, with “the bulk” expected to be completed in the first half of fiscal 2027. During Q&A, Brodin said work began in late January and is expected to ramp through January, February, and March, with the effort expected to be complete by the end of July. He described revenue recognition as starting in fiscal Q4 2026, then becoming “a little bit more of a steady earnings on revenue” over the first five months of fiscal 2027.
Washlow also cited a three-year renewal of a maintenance contract and said the company’s backlog is growing. She described electrical infrastructure as another focus area—integrated offerings that combine Orion’s LED lighting and EV charging businesses. She noted an “emerging example” of integrating localized battery storage solutions to help facilities manage energy costs and efficiency.
In addition, Washlow referenced a recent Orion Voltrek announcement involving Boston Public Schools: a $4 million installation of 105 EV charging stations and related infrastructure. She said Orion Voltrek is a recurring partner in an initiative to electrify 100% of the district’s 750 school buses, which she characterized as the largest school bus electrification program in the Northeast.
Washlow also discussed market conditions, pointing to reshoring and refurbishing of industrial facilities—ranging from data centers to manufacturing plants, retail stores, and public-sector buildings—as tailwinds. She cited Perrin Research, which she said expects 8% growth in the U.S. EV charging market in 2026, along with trends such as increases in ports per site and replacement of existing charging infrastructure.
Fiscal Q3 financial performance
Brodin reported fiscal Q3 2026 revenue of $21.1 million, up from $19.6 million in Q3 2025.
- LED lighting revenue was $12.1 million versus $13.2 million a year earlier, which Brodin attributed to decreased project activity and ESCO channel sales, partially offset by increased distribution channel sales. He said Orion expects its expanded project pipeline and distribution growth efforts to contribute to higher revenues in fiscal Q4 2026 and into fiscal 2027.
- Maintenance revenue rose 13% to $4.4 million from $3.9 million, reflecting new customer contracts and expansion of some existing relationships.
- EV charging solutions revenue increased to $4.7 million from $2.4 million, reflecting completion of a significant project during the quarter.
Gross margins improved across the company. Lighting gross margin was 30.6% versus 30.2% a year earlier, which Brodin said reflected pricing increases, cost reductions, sourcing initiatives, and a more favorable project and revenue mix. Maintenance gross margin was 25.5% compared with 26.4%. EV gross margin was 36.7% versus 30% in the prior-year quarter. Overall gross profit margin increased to 30.9% from 29.4%, driven by pricing and cost improvements, “particularly LED lighting and EV.”
Total operating expenses declined to $6.1 million from $7.0 million, which Brodin attributed to reductions in overhead and personnel expenses. Orion posted net income of $160,000, or $0.04 per share, compared with a net loss of $1.5 million, or $0.46 per share, in the year-ago period. Adjusted EBITDA improved to positive $761,000 from $32,000, marking the company’s fifth straight quarter of positive adjusted EBITDA. Brodin said trailing 12-month adjusted EBITDA was $1.6 million on sales of $81.5 million.
Cash, liquidity, and cost structure
Year-to-date cash provided by operating activities was $400,000 through Q3 2026 compared with $1.3 million in the prior-year period. Brodin also noted a $1.3 million net paydown of revolving credit borrowings during the year. Working capital was $8.9 million at Q3 2026 versus $8.7 million at year-end, and available liquidity was $11.8 million compared with $13.0 million at year-end.
Brodin said Orion recently raised approximately $6.4 million in net proceeds through the issuance of 500,000 shares of common stock, providing growth capital and additional capacity to pay down amounts on its revolving credit facility.
On operating expenses, Brodin told analysts Orion will continue to manage costs closely, noting cost-saving efforts can help offset other increases. He indicated that, at least in fiscal Q4, operating expenses are expected to “start with a 6,” suggesting a similar quarterly run rate to Q3.
Orion said it will provide an update on its fiscal fourth quarter on its next earnings call in early June.
About Orion Energy Systems (NASDAQ:OESX)
Orion Energy Systems, Inc is a U.S.-based provider of energy-efficient lighting and building controls solutions. Founded in 1996 and headquartered in Manitowoc, Wisconsin, the company specializes in designing, manufacturing and deploying LED lighting fixtures and integrated energy management systems for commercial and industrial customers.
The company’s product portfolio includes a range of LED light fixtures, smart sensors, networked controls and cloud-based energy management software.
