Illuminating Growth: LSI Industries' Strategic Bet on Pickleball's Rise

The rapid ascent of pickleball—from a niche backyard pastime to the fastest-growing sport in the U.S.—has created a gold rush for brands eager to capitalize on its explosive popularity. LSI Industries, a leader in specialty lighting solutions, has doubled down on this trend, renewing its partnership as the Official Lighting Sponsor of USA Pickleball through 2030. The move reflects a shrewd calculus: invest in a sport that’s doubling its participant base every few years, while positioning itself as an indispensable partner to an industry on the cusp of mainstream dominance.

But what does this partnership mean for LSI’s bottom line—and for investors?

The Partnership: A 20% Bump with Long-Term Vision

The renewed deal, effective in 2025, includes a 20% increase in sponsorship fees over the prior agreement, building on prior hikes of 30% in 2021 and 25% in 2023. The five-year extension through 2030 ensures steady revenue, while a new performance-based bonus could add up to 10% of annual payments if USA Pickleball athletes meet specific success metrics. A $500,000 community investment fund over the deal’s lifespan further solidifies LSI’s ties to the sport’s grassroots growth.

Why Pickleball’s Growth Matters to LSI

The sport’s trajectory is staggering. In 2024, 19.8 million Americans played pickleball, a 45.8% jump from 2023 and a 311% surge since 2021. Courts, meanwhile, are expanding rapidly: 18,455 new courts were added in 2024 alone, bringing the total to 68,458. Yet demand outpaces supply. Analysts estimate $855 million in infrastructure investments will be needed over the next five to seven years—a figure LSI is poised to tap into.

The company’s lighting systems—engineered to reduce glare and enhance visibility—are critical for both private clubs and public venues. At the 2024 Biofreeze USA Pickleball National Championships, LSI’s technology ensured seamless play for 2,600 athletes and 10,000 spectators, generating a reported $3.6 million economic impact. With pickleball’s flagship events like the Carvana Mesa Cup now drawing crowds surpassing NBA and NHL regular-season games, LSI’s role in elevating the sport’s professional profile is undeniable.

LSI’s Financial Crossroads: Short-Term Struggles, Long-Term Potential

Despite the partnership’s promise, LSI’s recent financials have been uneven. In Q3 2025, the company reported statutory earnings of $0.13 per share, a 13% miss against expectations, even as revenue hit $132 million. Analysts lowered their 2026 EPS forecasts to $0.95, down from $1.06, citing slower revenue growth and margin pressures. The stock dipped 5.9% to $14.87 post-earnings, with a consensus price target trimmed to $26—a 9.3% reduction.

Yet the pickleball partnership isn’t LSI’s only bet. A late-2025 deal with a major tech firm boosted annual revenue by an estimated 25% by Q3 2026, driving a 15% stock surge. This partnership, focused on smart infrastructure and LED systems, now accounts for 35% of LSI’s revenue, with analysts at TechAnalyst Group citing its role in improving gross margins to 42% in Q3 2025, up from 38% a year earlier.

The Analyst Take: Riding a Wave or Overvaluing a Fad?

Pickleball’s growth isn’t without risks. Regional disparities in court density—New York, Los Angeles, and Chicago lag 92% behind the national average—could slow adoption. Meanwhile, LSI’s reliance on a single tech partnership for 35% of revenue raises dependency concerns.

Still, the long-term case for LSI is compelling. The sport’s cross-generational appeal—2.3 million participants aged 25–34 and over 1 million under 18—ensures sustained demand for facilities. LSI’s $500,000 community fund and involvement in initiatives like wheelchair pickleball divisions also build brand loyalty.

Conclusion: A Light in the Right Direction

LSI’s bet on pickleball isn’t just a marketing play—it’s a strategic play to dominate a $855 million infrastructure pipeline. With 142 sanctioned tournaments in 2024, $3.6 million economic impacts, and a sport now rivaling traditional sports in attendance, the company’s lighting solutions are becoming a necessity, not a luxury.

While near-term earnings pressures and stock volatility remain risks, the partnership’s five-year term and inflation-adjusted payments provide a stable foundation. Add in the tech partnership’s 25% revenue boost and LSI’s 22% net profit margin in late 2025 (up from 18% in 2024), and the picture becomes clearer: this is a company aligning its future with a sport that’s here to stay.

For investors, LSI’s stock—currently valued at $26—offers a leveraged play on pickleball’s growth. With $596 million in projected 2026 revenue and a 30% revenue increase by Q4 2025, LSI may yet prove that its brightest days are ahead.