Orion Energy Systems Forecasts 5% Revenue Growth in FY2026

Orion Energy Systems expects revenue growth of 5% to $84 million in FY26, potentially leading to positive adjusted EBITDA for the year. The guidance is based on improved operating costs and gross profit percentages.

Orion Energy Systems, Inc. (NASDAQ: OESX) has reported its fourth quarter (Q4’25) and fiscal year ended March 31, 2025 (FY’25) results, and has provided an initial outlook for fiscal year 2026 (FY’26). The company expects revenue growth of 5% to approximately $84 million, positioning it to potentially achieve positive adjusted EBITDA for the year.

In its Q4’25 results, Orion reported revenue of $20.9 million, down from $26.4 million in the same period last year. This decline was primarily driven by lower LED lighting revenue and an anticipated decrease in maintenance revenue, partially offset by higher EV charging revenue. The company's gross profit percentage increased to 27.5%, the third highest quarterly rate in seven years, reflecting price and cost actions across the business.

Orion's CEO, Sally Washlow, commented on the company's performance, highlighting the impact of lower LED lighting project activity and reduced sales within its electrical contractor and lighting distribution channel. However, she noted bright spots in the company's performance, including 37% revenue growth from its Voltrek EV charging business and an impressive turnaround in the profitability of its electrical maintenance business.

Looking ahead, Orion expects its revenue to grow by 5% in FY’26, driven by improved operating costs and gross profit percentages. The company has made significant strides in reducing its operating expenses and improving profit margins over the past two years. Orion has also expanded its LED lighting project pipeline and strengthened its EV charging backlog, positioning it for modest growth in FY’26.

The company's initial FY’26 outlook anticipates revenue growth of five percent to approximately $84 million, which, based on its operating cost and gross profit percentage improvements, should position the Company to approach or achieve positive adjusted EBITDA for the full fiscal year.

Orion has also made strategic moves to enhance its liquidity position and reduce its credit facility borrowings. The company has agreed to a revised payment structure for Voltrek earnout payment obligations, which is designed to reduce its up-front cash requirements in exchange for the issuance of Orion common stock and a 2-year, 7% subordinated note.

Orion’s reorganization into two Commercial Business Units (CBUs), Solutions and Partners, is also expected to unify its customer-facing dialogues and maximize the value it provides to customers from its suite of complementary capabilities.

The company's strong platform of high-quality solutions and services, along with its significant base of large, long-term customers and continued progress on reducing costs, positions Orion for growth and improving bottom-line results. Despite current business and economic uncertainties, Orion is well-positioned for modest growth in FY’26.

References:
[1] https://www.nasdaq.com/press-release/orions-fy25-gross-margin-increased-254-230-bps-revenue-797m-expects-5-revenue-growth