Orion Energy Systems Delivers Strong Q1 FY26

Orion Energy Systems Delivers Strong Q1 FY26

Orion Energy Systems Delivers Strong Q1 FY26 with 30.1% Gross Margin and Positive

Adjusted EBITDA

Orion Energy Systems, Inc. announced solid fiscal results for the first quarter of FY 2026. While total revenue was slightly down year-over-year, Orion significantly improved profitability metrics, highlighted by its highest quarterly gross margin in six years and its third consecutive quarter of positive adjusted EBITDA.

Q1 FY26 Financial Highlights (Ended June 30, 2025)

  • Total Revenue: $19.6 million, a 2% decrease from $19.9 million in Q1 FY25

  • Gross Profit: $5.9 million, up 37% from $4.3 million in Q1 FY25

  • Gross Margin: 30.1%, up from 21.6% (+850 basis points YoY)

  • Net Loss: $(1.2) million or $(0.04) per share, compared to $(3.8) million or $(0.12) per share in Q1 FY25

  • Adjusted EBITDA: $0.2 million, an improvement from $(1.8) million in Q1 FY25

  • Operating Expenses: $6.9 million, down from $7.7 million in the prior year

  • Cash Used in Operating Activities: $0.5 million, significantly reduced from $3.0 million last year

Orion’s Q1 performance was driven by margin improvement initiatives, pricing optimization, and cost reductions. CEO Sally Washlow emphasized that these efforts “should continue to contribute to the bottom line as we progress through FY 2026.”

Segment Performance

  • LED Lighting: Revenue grew 1% to $12.9 million, supported by larger project activity.

  • Maintenance Services: Increased 21% to $4.0 million, fueled by new and expanded contracts.

  • EV Charging: Revenue declined 30% to $2.7 million, reflecting a tough comparison to Q1 FY25, which included a $11 million jump-start in Eversource Energy’s “EV Make Ready” program.

Cost Management & Profitability

Orion’s gross margin increase to 30.1% reflected favorable revenue mix, pricing strategies, and improved operational efficiency. The company also lowered its operating expenses to $6.9 million, despite $0.6 million in executive sign-on bonuses and severance expenses.

Net loss narrowed sharply to $(1.2) million from $(3.8) million year-over-year. Adjusted EBITDA turned positive at $0.2 million, demonstrating continued progress toward Orion’s goal of full-year profitability.

FY 2026 Outlook Reaffirmed

Orion reaffirmed its FY 2026 guidance:

  • Revenue Growth: ~5% to approximately $84 million

  • Profitability Goal: Positive full-year adjusted EBITDA

The company cited a growing pipeline of awarded projects, including:

  • A $3M EV charging installation for a public school district (underway in Q2)

  • Up to $7M in projects from three top-tier automotive clients

  • A $12M–$18M multi-year LED retrofit for a building products distributor

  • Federal government and retail chain projects totaling $30M+ over multiple years

While the EV charging segment faces near-term uncertainty, Orion maintains a solid $8M backlog and anticipates flat to slightly lower year-over-year segment performance.

Liquidity & Balance Sheet

  • Cash & Cash Equivalents: $3.6 million

  • Working Capital: $6.1 million

  • Revolving Credit Facility Debt: Paid down by $1.75 million in Q1, now at $5.25 million

  • Financial Liquidity: $9.8 million

Despite a modest year-over-year revenue dip, Orion Energy Systems delivered meaningful financial improvements in Q1 FY26, including its highest gross margin in years and a return to positive adjusted EBITDA. Backed by a diversified project pipeline, disciplined cost management, and strong customer relationships, the company is well-positioned to meet its FY26 growth and profitability targets.

For more information, visit www.orionlighting.com.

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