Orion Energy Systems (NASDAQ:OESX) reported higher fiscal 2026 revenue, improved margins and a narrower annual loss, as management said the company completed a turnaround year marked by positive adjusted EBITDA and a strengthened sales pipeline.
Chief Executive Officer Sally Washlow said fiscal 2026 was an “exceptional year” for Orion, citing revenue growth, newly achieved profitability on an adjusted EBITDA basis, stronger positions with major customers and expansion into new product and market areas. She said the company achieved three milestones it had set for the year: maintaining its Nasdaq listing, implementing growth and cost-containment initiatives, and exceeding its revenue and adjusted EBITDA targets.
Fourth-quarter revenue and profitability improve
Chief Financial Officer Pierre Brodin said Orion reported fiscal fourth-quarter revenue of $25.7 million, up from $20.9 million in the year-earlier quarter. Fourth-quarter adjusted EBITDA was $0.8 million, compared with $0.2 million in the prior-year period.
Orion’s fourth-quarter net loss narrowed to $1.5 million, or $0.39 per share, from a net loss of $2.9 million, or $0.88 per share, in fiscal Q4 2025. For the full year, the company’s net loss was $3.2 million, or $0.89 per share, compared with a net loss of $11.8 million, or $3.59 per share, in fiscal 2025.
Gross margin improved significantly. Overall gross margin rose to 37% in the fourth quarter from 27.5% a year earlier. For the full fiscal year, gross margin was 32.6%, compared with 25.4% in fiscal 2025. Brodin said the company expects gross margin to “remain strong” in fiscal 2027, though it may vary by quarter because of revenue mix and volume.
Total operating expenses were $10.3 million in the fourth quarter, compared with $8.4 million a year earlier. Brodin said the latest quarter included $1.7 million of earn-out true-up expense and a $1.1 million non-cash write-off of solar assets. For the full year, operating expenses declined to $29.7 million from $30.8 million, reflecting overhead and personnel expense reductions, as well as those one-time items and a $500,000 executive sign-on bonus.
Lighting leads segment results; EV revenue declines
Orion’s LED lighting segment generated $20.3 million in fourth-quarter revenue, compared with $20.9 million in the same period a year earlier. For the full year, LED lighting revenue increased to $55.9 million from $47.7 million. Brodin said fourth-quarter lighting performance reflected increased project activity and distribution channel sales, partially offset by lower ESCO channel sales.
Lighting gross margin was 40.4% in the fourth quarter, up from 28.3% a year earlier. Brodin said the margin benefited from a $1.3 million contract amendment payment that had no associated cost of sales, but added that excluding the payment, lighting segment margin still would have exceeded 30%. Full-year lighting gross margin rose to 33.8% from 26.6%.
Maintenance segment revenue fell to $3.2 million in the fourth quarter from $4.1 million, which management attributed to the timing of seasonal work. For the full year, maintenance revenue increased 6% to $16 million, while gross margin improved to 23.7% from 18.2%.
EV charging solutions revenue declined to $2.3 million in the fourth quarter from $5.8 million a year earlier. Brodin said the comparison reflected both sector-wide uncertainty in the U.S. market and a strong prior-year quarter. Full-year EV charging revenue was $14.4 million, compared with $16.8 million in fiscal 2025, while gross margin improved to 37.7% from 28.3%.
Fiscal 2027 outlook calls for continued growth
Orion issued fiscal 2027 guidance for revenue of $95 million to $97 million, with positive adjusted EBITDA for the full year. Washlow said there could be upside from the number of opportunities in front of the company.
During the question-and-answer session, Washlow said fiscal 2027 “started strong” and that backlog was distributed across Orion’s segments. Brodin said management expects revenue to play out “relatively evenly” over the year.
In response to analyst questions about a large outdoor lighting opportunity with a long-term customer, Washlow said the project continues to move forward positively, with testing underway within locations to finalize selections. When asked whether Orion was competing against another vendor, she said, “We don’t believe anyone else is in the mix.”
Management also discussed growth in electrical contracting work. Washlow said examples include new-store buildouts for large customers, EV infrastructure-related work and additional work with logistics and retail customers. She said Orion has the working capital needed to support the backlog tied to those projects.
Data centers become a new target market
Washlow highlighted Orion’s recently announced entry into the data center market, citing demand driven by artificial intelligence and cloud computing. She said Orion developed a multipurpose linear lighting fixture designed for data center architecture and floor plans, with the ability to customize and manufacture the product at its Wisconsin facility.
Washlow said energy-efficient lighting is important for hyperscale data centers because AI-driven applications require significant power. She said Orion aims to become the LED lighting provider of choice for many data centers, emphasizing the company’s proprietary supply chain, lead-time flexibility and experience with large industrial customers.
When asked whether data center opportunities were included in the current backlog, Washlow said they were not reflected in a meaningful way at this point. She said Orion has “high expectations” for the area, but expects much of the related revenue to come later in fiscal 2027 and in future years.
Management also addressed several other balance sheet and strategic items. Brodin said Orion ended fiscal 2026 with available liquidity of $15.4 million, up from $13 million at the prior year-end, and net working capital of $11 million. The company raised $6.4 million in net proceeds during fiscal 2026 through the issuance of 500,000 common shares and paid down $4 million of revolving credit borrowings. Brodin also said the company extended the maturity of its credit facility to June 30, 2030.
Asked about the Voltrek earn-out, Brodin said all payment requirements had been fully satisfied and would not carry into fiscal 2027 or beyond. He also said a solar contract amendment represented the last remaining solar activity, with no carry-forward activity expected in that area.
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.
