Orion Reports Positive Operating Income in Q3 2026, Raises Outlook for FY 2026 and FY 2027

Orion Energy Systems achieved a significant financial milestone in its fiscal third quarter. The company posted positive operating income and continued revenue growth. These results show a multi-quarter turnaround and support management’s increased expectations for FY 2026 and FY 2027.

Q3 2026 Highlights Show Improving Momentum

For the quarter ending December 31, 2025, Orion generated revenue of $21.1 million, up from $19.6 million in Q3 2025. Gross margin expanded to 30.9% from 29.4% a year earlier. Pricing discipline and cost improvements drove this expansion. The company delivered positive operating income and adjusted EBITDA of 3.6%. This was the fifth consecutive quarter of positive adjusted EBITDA. Recent restructuring and operational focus are yielding sustained improvements.

Net income was $0.2 million, or $0.04 per share. In the prior-year quarter Orion reported a net loss of $1.5 million, or $(0.46) per share.

Segment Performance: EV Charging and Maintenance Lead Growth

 Total revenue increased year over year, but growth came from different segments.

• LED lighting revenue fell 8% to $12.1 million. Softer ESCO and turnkey activity drove the decline, although distribution channels offset some of the weakness. Management expects a stronger LED lighting performance later in FY 2026 as the project pipeline grows.
• EV charging revenue almost doubled to $4.7 million from $2.4 million in Q3 2025. Fleet installations spurred the growth and highlighted Orion’s role in electrification projects.
• Maintenance services revenue rose 13% to $4.4 million. New contracts and expansions with existing customers provided recurring maintenance revenue, making Orion’s business more predictable.

Large Enterprise Wins Strengthen Backlog and Visibility

CEO Sally Washlow highlighted several major customer wins that expand Orion’s market presence. The most significant was a $14–$15 million exterior lighting award from the company’s largest customer. This award followed a three-year renewal of Orion as the maintenance provider. The multi-year maintenance relationship is valued at $42–$45 million and covers about 2,050 locations nationwide.

Additional multi-million-dollar lighting engagements announced in late October boosted backlog growth. One engagement begins a multi-year upgrade and new construction program across U.S. facilities for another large enterprise customer.

Margins and Expense Discipline Drive Profitability

Operational execution remained a core focus in Q3. Gross margin stayed near 31%. Operating expenses fell to $6.1 million from $7.0 million a year earlier. The company continues to right-size infrastructure and control personnel costs while still pursuing growth.

As a result, profitability improved. Adjusted EBITDA increased to $0.8 million, up from breakeven levels in the prior year.

Outlook Raised for FY 2026, FY 2027 Established

Building on Q3 results, Orion reiterated its increased FY 2026 revenue outlook of $84 million to $86 million. The company also maintained its FY 2027 revenue outlook of $95 million to $97 million, with positive adjusted EBITDA expected.

Management described the outlook as “up and to the right.” They said disciplined execution is already paying off.

Orion Reports Strong Q3 While Balance Sheet and Liquidity Remain Stable

Through Q3 2026, Orion generated $0.4 million in cash from operating activities. The company reduced borrowings on its revolving credit facility by $1.3 million. Orion ended the quarter with $4.7 million in cash and total liquidity of $11.8 million.

Working capital improved to $8.6 million at quarter end, up from $8.0 million at the end of the prior quarter. This provides flexibility as the company pursues its growth strategy.

Go Deeper:  Orion Energy Systems Delivers Strong Q1 FY26