Orion Energy Systems Q3 2026 Orion Energy Systems Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q3 2026 Orion Energy Systems Inc Earnings Call
Operator: Good morning, everyone, and welcome to Orion Energy Systems' Fiscal 2026 Third Quarter Conference Call. At this time, all participants are in a listen-only mode. In this call, Sally Washlow, Orion's CEO, and Per Brodin, its CFO, will review the company's third quarter results and its fiscal 2026 and fiscal 2027 outlooks. We will then open the call to investor questions. Today's call is being recorded. A replay will be posted in the investor section of the company's website, orionlightning.com. I will now turn the call over to Per Brodin, Orion's CFO. Please go ahead.
Operator: Good morning, everyone, and welcome to Orion Energy Systems' Fiscal 2026 Third Quarter Conference Call. At this time, all participants are in a listen-only mode. In this call, Sally Washlow, Orion's CEO, and Per Brodin, its CFO, will review the company's third quarter results and its fiscal 2026 and fiscal 2027 outlooks. We will then open the call to investor questions. Today's call is being recorded. A replay will be posted in the investor section of the company's website, orionlightning.com. I will now turn the call over to Per Brodin, Orion's CFO. Please go ahead.
Speaker #1: In this call, Sally Washlow, ORION's CEO, and Pierre Brodin, its CFO, will review the company's third quarter results and its fiscal 2026 and fiscal 2027 outlooks.
Speaker #1: We will then open the call to questions. Please go ahead.
Speaker #1: investor questions. Today's call is being recorded. A replay will be posted in the investor section of the company's website, ORIONLIGHTNING.com. I will now turn the call over to Pierre Brodin, ORION's CFO.
Speaker #2: Thank you,
Per Brodin: Thank you, Michelle. First, a reminder. Prepared remarks and answers to questions include statements that are forward-looking under the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally include words such as anticipate, believe, expect, project, or similar words. Also, any statements describing future objectives or goals, company plans, and outlook are also forward-looking. These forward-looking statements are subject to various risks that could cause actual results to differ materially from our current expectations. Risks include, among other matters, those that Orion has described in its press release issued this morning and in its SEC filings. Except as described therein, Orion disclaims any obligation to update or revise forward-looking statements made as of today. In addition, reconciliations of certain non-GAAP financial metrics to their nearest GAAP measures are also provided in today's press release. Now I'll turn the call over to Orion's CEO, Sally Washlow.
Thank you, Michelle. First, a reminder. Prepared remarks and answers to questions include statements that are forward-looking under the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally include words such as anticipate, believe, expect, project, or similar words. Also, any statements describing future objectives or goals, company plans, and outlook are also forward-looking. These forward-looking statements are subject to various risks that could cause actual results to differ materially from our current expectations. Risks include, among other matters, those that Orion has described in its press release issued this morning and in its SEC filings. Except as described therein, Orion disclaims any obligation to update or revise forward-looking statements made as of today. In addition, reconciliations of certain non-GAAP financial metrics to their nearest GAAP measures are also provided in today's press release. Now I'll turn the call over to Orion's CEO, Sally Washlow.
Speaker #2: Michelle. First, a reminder: prepared remarks and answers to questions, include statements that are forward-looking under the private securities litigation reform act of 1995. Forward-looking statements generally include words such as anticipate, believe, expect, project, or similar words.
Speaker #2: Also, any statements describing future objectives or goals company plans and forward-looking. These various risks that could cause outlook are also actual results to differ materially from our current expectations.
Speaker #2: Risks include, among other matters, those that ORION has described in its press release issued this morning and in its SEC filings. Except as described therein, ORION disclaims any obligation to update or revise forward-looking statements made as of today.
Speaker #2: In addition, reconciliations of certain non-GAAP financial metrics to their nearest GAAP measures are also provided in today's press release. Now I'll turn the CEO, Sally call over to ORION's
Speaker #3: Thank you, Pierre. Good morning, everyone, and thank you for being with us today. I am delighted to report our results for Q3, our fifth
Sally Washlow: Thank you, Per. Good morning, everyone, and thank you for being with us today. I am delighted to report our results for Q3, our fifth straight quarter of positive adjusted EBITDA. In our last investor call, I said that we were on track to achieve three milestones in FY 2026. Milestone one: maintain our NASDAQ listing and maximize our opportunity for growth and shareholder value. As our shareholders can attest, we have checked that box. Milestone two: by the end of third quarter, the enactment of a growth, profitability, and cost containment initiative that enables Orion to become a recognized long-term market leader. As today's earnings report can attest, we have checked that box, too. And milestone three: by the end of the fourth quarter, $84 million in revenue at or near a positive adjusted EBITDA for the full fiscal year.
Sally Washlow: Thank you, Per. Good morning, everyone, and thank you for being with us today. I am delighted to report our results for Q3, our fifth straight quarter of positive adjusted EBITDA. In our last investor call, I said that we were on track to achieve three milestones in FY 2026. Milestone one: maintain our NASDAQ listing and maximize our opportunity for growth and shareholder value. As our shareholders can attest, we have checked that box. Milestone two: by the end of third quarter, the enactment of a growth, profitability, and cost containment initiative that enables Orion to become a recognized long-term market leader. As today's earnings report can attest, we have checked that box, too. And milestone three: by the end of the fourth quarter, $84 million in revenue at or near a positive adjusted EBITDA for the full fiscal year.
Speaker #3: straight quarter of positive adjusted EBITDA. In our last investor call, I said that we were on track to achieve three milestones in FY 2026.
Speaker #3: Milestone one, maintain our NASDAQ listing and maximize our opportunity for As our shareholders can attest, we growth in shareholder value. have checked that box.
Speaker #3: Milestone two, by the end of third quarter, the enactment of a growth profitability and cost containment initiative that enables ORION to long-term market leader.
Speaker #3: report can attest, we have checked that box too. And become a recognized milestone three, by the Washlow. end of the fourth quarter, 84 million in revenue, As today's earnings EBITDA for the full fiscal year.
Speaker #3: As we announced two weeks ago, we believe we are on track to meet or exceed this milestone. The most illustrative way to bring you up to date about ORION is to review the two news items we announced a couple of weeks ago.
Sally Washlow: As we announced two weeks ago, we believe we are on track to meet or exceed this milestone. The most illustrative way to bring you up to date about Orion is to review the two news items we announced a couple weeks ago. First, we upticked our guidance range for our current fiscal year and set expectations for increasingly profitable growth in our next fiscal year, which begins 1 April. We raised our FY 2026 outlook to a range of between $84 and 86 million in revenue at positive Adjusted EBITDA. Again, that's up from our previous outlook of $84 million in revenue at or approaching positive Adjusted EBITDA. Our guidance range increase was sparked by our Q3 expectations of about $21 million in revenue and our fifth straight quarter of positive Adjusted EBITDA, which are indeed the results that we are reporting today.
Sally Washlow: As we announced two weeks ago, we believe we are on track to meet or exceed this milestone. The most illustrative way to bring you up to date about Orion is to review the two news items we announced a couple weeks ago. First, we upticked our guidance range for our current fiscal year and set expectations for increasingly profitable growth in our next fiscal year, which begins 1 April. We raised our FY 2026 outlook to a range of between $84 and 86 million in revenue at positive Adjusted EBITDA. Again, that's up from our previous outlook of $84 million in revenue at or approaching positive Adjusted EBITDA. Our guidance range increase was sparked by our Q3 expectations of about $21 million in revenue and our fifth straight quarter of positive Adjusted EBITDA, which are indeed the results that we are reporting today.
Speaker #3: First, we upticked our guidance range for our current fiscal year and set expectations for increasingly profitable growth in our next fiscal year, which begins April 1.
Speaker #3: outlook to a range of between 84 and 86 million in revenue at positive adjusted EBITDA. Again, that's up from our previous outlook of 84 million in revenue positive adjusted EBITDA.
Speaker #3: Our guidance range increased expectations of about 21 million in revenue and our fifth straight quarter of positive Which are indeed the results that we are reporting adjusted EBITDA.
Sally Washlow: Additionally, we now expect positive Adjusted EBITDA for the full FY 2026, which ends March 31. We expect continued up and to the right profitable growth in FY 2027, with positive Adjusted EBITDA on revenue between $95 million and $97 million. We based our uptick on increasing orders and the success of our recent cost structure improvements. A few of these recent orders include an exterior lighting project valued between $14 million and $15 million, beginning now in our current Q4, with the bulk of it completed in the first half of our FY 2027. This is an example how we expand our scope of work within our current customer base. We expect more of this expansion in FY 2027, along with more new customer wins as well.
Sally Washlow: Additionally, we now expect positive Adjusted EBITDA for the full FY 2026, which ends March 31. We expect continued up and to the right profitable growth in FY 2027, with positive Adjusted EBITDA on revenue between $95 million and $97 million. We based our uptick on increasing orders and the success of our recent cost structure improvements. A few of these recent orders include an exterior lighting project valued between $14 million and $15 million, beginning now in our current Q4, with the bulk of it completed in the first half of our FY 2027. This is an example how we expand our scope of work within our current customer base. We expect more of this expansion in FY 2027, along with more new customer wins as well.
Speaker #3: We expect positive adjusted EBITDA today. Q3 26, which ends March 31st. Additionally, we now expect at or approaching continued up and to the right profitable growth in FY 27, with positive adjusted EBITDA on revenue between $95 million and $97 million.
Speaker #3: We based our uptick on increasing orders and the success of our recent cost structure improvements. A few of these recent orders include an exterior lighting project valued between 14 and 15 million beginning now in our current Q4 with a bulk of it completed in the first half of our FY 2027.
Speaker #3: This is an example of how we expand our scope of work within our current customer base. We expect more of this expansion in FY 27 along with more new customer wins as well.
Speaker #3: Our strategy to expand the products and services we provide is exemplified by the recent three-year renewal of the maintenance contract as well as our growing backlog.
Sally Washlow: Our strategy to expand the products and services we provide is exemplified by the recent three-year renewal of a maintenance contract, as well as our growing backlog. We grow our business by listening to our customers and developing the products and services they need. Another area of focus that we are continuing to quote and win more and more work is within electrical infrastructure, which we define as integrated offerings within our LED lighting and EV charging lines of business. An emerging example of this for some customers is our initial integration of a localized battery storage solution that enables facilities to minimize cost and maximize efficiency by drawing on stored energy. Another example is the Orion Voltrek announcement just this week of our latest work for the Boston Public Schools, a $4 million installation of 105 EV charging stations and related infrastructure.
Sally Washlow: Our strategy to expand the products and services we provide is exemplified by the recent three-year renewal of a maintenance contract, as well as our growing backlog. We grow our business by listening to our customers and developing the products and services they need. Another area of focus that we are continuing to quote and win more and more work is within electrical infrastructure, which we define as integrated offerings within our LED lighting and EV charging lines of business. An emerging example of this for some customers is our initial integration of a localized battery storage solution that enables facilities to minimize cost and maximize efficiency by drawing on stored energy. Another example is the Orion Voltrek announcement just this week of our latest work for the Boston Public Schools, a $4 million installation of 105 EV charging stations and related infrastructure.
Speaker #3: grow our business by listening to our We customers and developing the products and services they need. Another area of focus that we are continuing to quote and win more and more work is within electrical infrastructure.
Speaker #3: Which we define as integrated offerings within our LED lighting and EV charging lines of business. An emerging example of this for some customers is our initial integration of a localized battery storage solution that enables facilities to minimize cost and maximize efficiency by drawing on stored energy.
Speaker #3: Another example is the ORION Voltrek announcement just this week of our latest work for the Boston Public School System: a $4 million installation of 105 EV charging stations and related. ORION is a recurring partner in the BPS initiative to electrify 100% of the district's 750 school buses.
Sally Washlow: Orion Voltrek is a recurring partner in the BPS initiative to electrify 100% of the district's 750 school buses, the largest school bus electrification program in the Northeast. As I've said before, a number of industrial, commercial, and public sector facilities operated by some of the largest enterprises in the United States rely on Orion. Year after year, our largest longtime customers stay with us and grow with us because we deliver unsurpassed quality and unsurpassed ROI on an ongoing basis. One reason that they rely on us is that we are reliable, in part because our proprietary supply chain enables us to maximize efficiencies, minimize dwell times, and avoid choke points. As they also know, that our built-from-the-ground-up supply chain also helps insulate us from the risk factors associated with the headlines of the day.
Sally Washlow: Orion Voltrek is a recurring partner in the BPS initiative to electrify 100% of the district's 750 school buses, the largest school bus electrification program in the Northeast. As I've said before, a number of industrial, commercial, and public sector facilities operated by some of the largest enterprises in the United States rely on Orion. Year after year, our largest longtime customers stay with us and grow with us because we deliver unsurpassed quality and unsurpassed ROI on an ongoing basis. One reason that they rely on us is that we are reliable, in part because our proprietary supply chain enables us to maximize efficiencies, minimize dwell times, and avoid choke points. As they also know, that our built-from-the-ground-up supply chain also helps insulate us from the risk factors associated with the headlines of the day.
Speaker #3: The largest school bus electrification Northeast. As I've said before, a number of program in the industrial, commercial, and public sector facilities enterprises in the United States rely on ORION.
Speaker #3: Year after year, our largest, long-time customers stay with us and grow with us because we deliver unsurpassed quality and unsurpassed ROI on an ongoing basis.
Speaker #3: One reason that they rely on us is that we are reliable in part because our proprietary supply chain enables us to maximize efficiencies and minimize dwell As I also know, our times and avoid choke points.
Speaker #3: built-from-the-ground-up supply chain also helps insulate us from the risk factors associated with the headlines of the day. Another reason our customers are relying on us is that we earn more of their confidence the more we do with them.
Sally Washlow: Another reason our customers rely on us is that we earn more of their confidence the more we do with them. That includes retailers, two of the largest automakers on Earth, and one of the biggest school systems in America. Customers require the most demanding standards of efficiency, reliability, and compliance. [They] repeatedly increase our scope of work because we deliver on time and on budget. We see increasing market, customer, and market demand ahead of us, as evidenced by our uptick expectations of growth and profitability through FY 2027. We expect to benefit from market tailwinds, especially in building, reshoring, and refurbishing industrial facilities, ranging from data centers to manufacturing plants, to big box retail stores and public sector buildings. EV fast charging continues to be an area of opportunity, according to Paren.
Sally Washlow: Another reason our customers rely on us is that we earn more of their confidence the more we do with them. That includes retailers, two of the largest automakers on Earth, and one of the biggest school systems in America. Customers require the most demanding standards of efficiency, reliability, and compliance. [They] repeatedly increase our scope of work because we deliver on time and on budget. We see increasing market, customer, and market demand ahead of us, as evidenced by our uptick expectations of growth and profitability through FY 2027. We expect to benefit from market tailwinds, especially in building, reshoring, and refurbishing industrial facilities, ranging from data centers to manufacturing plants, to big box retail stores and public sector buildings. EV fast charging continues to be an area of opportunity, according to Paren.
Speaker #3: That includes retailers, two of the largest automakers on earth, and one of the biggest school systems in America. Customers require the most demanding standards of efficiency, reliability, and compliance repeatedly increase our scope deliver on time and on budget.
Speaker #3: We see increasing market customer and market demand ahead of us as evidenced by our upticked expectations of growth and profitability through FY 27. We tailwinds, especially in building reshoring and expect to benefit from market refurbishing industrial facilities ranging from data centers to manufacturing plants to big box retail stores and public sector buildings.
Speaker #3: EV fast charging continues to be an area of opportunity according to parent research. While the US EV charging market faced uncertainty in 2025, the most recent parent report expects 8% growth in 2026.
Sally Washlow: While the US EV charging market faced uncertainty in 2025, the most recent Paren report expects 8% growth in 2026. Paren also cites growth trends in ports per site and rip and replace of existing EV charging infrastructure. It foresees what it calls a private-led expansion and improved CPO economics. The report puts a premium on execution, quality, and asset efficiency. We believe we have right-sized and recalibrated Orion for that environment that Paren describes, and we believe that puts us in position for market expansion, product extensibility, and profitable growth. We could not be more energized about the remainder of the current fiscal year and the entirety of the next year. With that, let me turn to Orion's CFO, Per Brodin, to review our financial performance and outlook.
Sally Washlow: While the US EV charging market faced uncertainty in 2025, the most recent Paren report expects 8% growth in 2026. Paren also cites growth trends in ports per site and rip and replace of existing EV charging infrastructure. It foresees what it calls a private-led expansion and improved CPO economics. The report puts a premium on execution, quality, and asset efficiency. We believe we have right-sized and recalibrated Orion for that environment that Paren describes, and we believe that puts us in position for market expansion, product extensibility, and profitable growth. We could not be more energized about the remainder of the current fiscal year and the entirety of the next year. With that, let me turn to Orion's CFO, Per Brodin, to review our financial performance and outlook.
Speaker #3: Parent also cites growth trends in ports per site and rip-and-replace of existing EV charging infrastructure. It foresees what it calls a private-led expansion and improved CPO economics.
Speaker #3: The report puts a premium on execution, quality, and asset efficiency. We believe we have right-sized and recalibrated ORION for that environment that parent describes.
Speaker #3: And we believe that puts us in position for market expansion product extensibility and profitable growth. We could not be more energized about the remainder of the current fiscal year and the entirety of the next year.
Speaker #3: With that, let me turn to ORION CFO John Brodin to review our financial performance and
Speaker #3: outlook. Thank you,
Per Brodin: Thank you, Sally. Today, we reported fiscal Q3 2026 revenue of $21.1 million, compared to $19.6 million in Q3 2025. LED lighting segment revenue was $12.1 million, compared to $13.2 million in Q3 2025, reflecting decreased project activity and ESCO channel sales, partially offset by an increase in distribution channel sales. Orion's expanded LED lighting project pipeline and efforts to drive growth in the distribution channel are expected to continue to contribute to higher revenues in Q4 2026 and into fiscal 2027. In addition, we are expecting a very strong Q4 from the turnkey group. Lighting achieved a Q3 2026 gross margin of 30.6% versus a 30.2% in Q3 2025, with pricing increases, cost reductions, and sourcing initiatives amplified by a more favorable Q3 2026 project and revenue mix contributing to this performance.
Per Brodin: Thank you, Sally. Today, we reported fiscal Q3 2026 revenue of $21.1 million, compared to $19.6 million in Q3 2025. LED lighting segment revenue was $12.1 million, compared to $13.2 million in Q3 2025, reflecting decreased project activity and ESCO channel sales, partially offset by an increase in distribution channel sales. Orion's expanded LED lighting project pipeline and efforts to drive growth in the distribution channel are expected to continue to contribute to higher revenues in Q4 2026 and into fiscal 2027. In addition, we are expecting a very strong Q4 from the turnkey group. Lighting achieved a Q3 2026 gross margin of 30.6% versus a 30.2% in Q3 2025, with pricing increases, cost reductions, and sourcing initiatives amplified by a more favorable Q3 2026 project and revenue mix contributing to this performance.
Speaker #2: fiscal Q3 26 revenue of 21.1 Sally. Today, we reported million compared to Q3 25. 19.6 million in LED lighting segment revenue was 12.1 million compared Q3 25, to 13.2 million in reflecting decreased project activity and ESCO channel sales partially offset by an increase in distribution channel sales.
Speaker #2: ORION's expanded LED lighting project pipeline and efforts to drive growth in the distribution channel are expected to continue to contribute to higher revenues in Q4 26 and into fiscal 27.
Speaker #2: In addition, we are expecting a very strong Q4 from the turnkey group. Lighting achieved a Q3 '26 gross margin of 30.6% versus 30.2% in Q3 '25, with pricing increases, cost reductions, and sourcing initiatives amplified by a more favorable Q3 '26 project and revenue mix contributing to this performance.
Speaker #2: Maintenance segment revenue increased 13% to 4.4 million in Q3 26 from 3.9 million in Q3 25, reflecting the benefit of new customer contracts and the expansion of some existing relationships.
Per Brodin: Maintenance segment revenue increased 13% to $4.4 million in Q3 2026 from $3.9 million in Q3 2025, reflecting the benefit of new customer contracts and the expansion of some existing relationships. We achieved a maintenance segment gross margin of 25.5% in Q3 2026 versus 26.4% in Q3 2025. EV charging solutions revenue was $4.7 million in Q3 2026, compared to $2.4 million in Q3 2025, reflecting the expected completion of a significant project within the quarter. EV achieved a gross margin of 36.7% in Q3 2026 versus 30% in Q3 2025. Our overall gross profit margin increased to 30.9% versus 29.4% in Q3 2025, reflecting pricing and cost improvements in all segments, particularly LED lighting and EV.
Per Brodin: Maintenance segment revenue increased 13% to $4.4 million in Q3 2026 from $3.9 million in Q3 2025, reflecting the benefit of new customer contracts and the expansion of some existing relationships. We achieved a maintenance segment gross margin of 25.5% in Q3 2026 versus 26.4% in Q3 2025. EV charging solutions revenue was $4.7 million in Q3 2026, compared to $2.4 million in Q3 2025, reflecting the expected completion of a significant project within the quarter. EV achieved a gross margin of 36.7% in Q3 2026 versus 30% in Q3 2025. Our overall gross profit margin increased to 30.9% versus 29.4% in Q3 2025, reflecting pricing and cost improvements in all segments, particularly LED lighting and EV.
Speaker #2: We achieved a maintenance segment gross margin of 25.5% in Q3 26 versus 26.4% in Q3 25. EV charging solutions revenue was 4.7 million in Q3 26 compared to 2.4 million in Q3 25, reflecting the expected completion of a significant project within the quarter.
Speaker #2: EV achieved a gross margin of 36.7% in Q3 '26 versus 30% in Q3. Our overall gross profit margin increased to 30.9% versus 29.4% in Q3 '25, reflecting pricing and cost improvements in all segments, particularly LED lighting and EV.
Speaker #2: We expect our overall gross margin to remain strong in Q4 26 and throughout fiscal 27, though we'll likely due to revenue mix and volume.
Per Brodin: We expect our overall gross margin to remain strong in Q4 2026 and throughout fiscal 2027, though it will likely vary on a quarterly basis due to revenue mix and volume. Total operating expenses declined to $6.1 million in Q3 2026, from $7 million in Q3 2025, reflecting ongoing overhead and personnel expense reductions. Reflecting stronger gross margin and lower operating expenses, Orion's Q3 2026 net income was $160,000 or $0.04 per share, compared to a net loss of $1.5 million or $0.46 per share in Q3 2025. Adjusted EBITDA improved to positive $761,000 in Q3 2026, versus $32,000 in Q3 2025, reflecting continued cost control and financial discipline. As Sally mentioned, this was Orion's fifth consecutive quarter of positive adjusted EBITDA.
Per Brodin: We expect our overall gross margin to remain strong in Q4 2026 and throughout fiscal 2027, though it will likely vary on a quarterly basis due to revenue mix and volume. Total operating expenses declined to $6.1 million in Q3 2026, from $7 million in Q3 2025, reflecting ongoing overhead and personnel expense reductions. Reflecting stronger gross margin and lower operating expenses, Orion's Q3 2026 net income was $160,000 or $0.04 per share, compared to a net loss of $1.5 million or $0.46 per share in Q3 2025. Adjusted EBITDA improved to positive $761,000 in Q3 2026, versus $32,000 in Q3 2025, reflecting continued cost control and financial discipline. As Sally mentioned, this was Orion's fifth consecutive quarter of positive adjusted EBITDA.
Speaker #2: operating expenses declined to vary on a quarterly basis 6.1 million in Q3 Total 26 from 7 million in Q3 25, reflecting ongoing overhead and personnel expense reductions.
Speaker #2: Reflecting stronger gross margin and lower operating expenses, ORION's Q3 26 net income was 160,000 or 4 cents per share, compared to a net loss of 1.5 million or 46 per share in Q3 25.
Speaker #2: Adjusted EBITDA improved to positive 761,000 in Q3 26 versus 32,000 in Q3 25, reflecting continued cost control and financial discipline. As Sally mentioned, this was ORION's fifth consecutive quarter of positive adjusted EBITDA.
Per Brodin: That puts our trailing twelve-month Adjusted EBITDA at $1.6 million on sales of $81.5 million. Year-to-date cash provided by operating activities was $400,000 through Q3 2026, compared to $1.3 million in the prior year period. During the year, we have also had a $1.3 million net paydown of our revolving credit borrowings. Net working capital was $8.9 million at Q3 2026, versus $8.7 million at year-end. Available financial liquidity was $11.8 million versus $13 million at year-end. Notably, we recently raised net proceeds of approximately $6.4 million through the issuance of 500,000 shares of common stock, which provides us with growth capital and the ability to pay down amounts outstanding on our revolving credit facility.
Per Brodin: That puts our trailing twelve-month Adjusted EBITDA at $1.6 million on sales of $81.5 million. Year-to-date cash provided by operating activities was $400,000 through Q3 2026, compared to $1.3 million in the prior year period. During the year, we have also had a $1.3 million net paydown of our revolving credit borrowings. Net working capital was $8.9 million at Q3 2026, versus $8.7 million at year-end. Available financial liquidity was $11.8 million versus $13 million at year-end. Notably, we recently raised net proceeds of approximately $6.4 million through the issuance of 500,000 shares of common stock, which provides us with growth capital and the ability to pay down amounts outstanding on our revolving credit facility.
Speaker #2: That puts our trailing 12-month adjusted EBITDA at 1.6 million on sales of 81.5 million. Year-to-date cash provided by operating activities was 400,000 through Q3 26 compared to 1.3 million in the prior year period.
Speaker #2: During the year, we have also had a 1.3 million net paydown of our evolving credit borrowings. Networking capital was 8.9 million at Q3 26 versus 8.7 million at year-end.
Speaker #2: Available financial liquidity was 11.8 million versus 13 million at year-end. Notably, we recently raised net proceeds of approximately issuance of 500,000 shares of common stock, which provides us with growth capital and the ability to pay down amounts outstanding on our revolving credit facility.
Speaker #2: Regarding our outlook, as Sally noted, last month we increased our expectations for growth and profitability for our current fiscal year and set expectations for increasing growth and profitability in our next fiscal year, which begins April 1st.
Per Brodin: Regarding our outlook, as Sally noted, last month, we increased our expectations for growth and profitability for our current fiscal year and set expectations for increasing growth and profitability in our next fiscal year, which begins April 1. We raised our fiscal 2026 outlook to a range of between $84 million and $86 million in revenue at positive Adjusted EBITDA. That's up from our previous outlook of about $84 million in revenue at or approaching positive Adjusted EBITDA. Now we expect positive Adjusted EBITDA for the full fiscal year 2026, which ends March 31. We also announced that we expect a continued increase in profitable growth in fiscal 2027, with positive Adjusted EBITDA on revenue between $95 million and $97 million. This concludes our prepared remarks. Operator, would you please now commence the question and answer session?
Per Brodin: Regarding our outlook, as Sally noted, last month, we increased our expectations for growth and profitability for our current fiscal year and set expectations for increasing growth and profitability in our next fiscal year, which begins April 1. We raised our fiscal 2026 outlook to a range of between $84 million and $86 million in revenue at positive Adjusted EBITDA. That's up from our previous outlook of about $84 million in revenue at or approaching positive Adjusted EBITDA. Now we expect positive Adjusted EBITDA for the full fiscal year 2026, which ends March 31. We also announced that we expect a continued increase in profitable growth in fiscal 2027, with positive Adjusted EBITDA on revenue between $95 million and $97 million. This concludes our prepared remarks. Operator, would you please now commence the question and answer session?
Speaker #2: We raised our fiscal 26 outlook to a range of between 84 million and 86 million in revenue at EBITDA. That's up from our previous outlook of about 84 million in revenue at or approaching positive adjusted EBITDA.
Speaker #2: And now we 6.4 million through the expect positive adjusted EBITDA for the full fiscal year 26, which ends March 31st. We also announced that we expect a continued increase in profitable growth in fiscal 27 with positive adjusted EBITDA on revenue between 95 million and 97 million.
Speaker #2: And this concludes our prepared remarks. Operator, would you please now commence the session? question and answer
Operator: Thank you. To ask a question at this time, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. In fairness to all, we ask that you please limit yourself to two questions before reentering the queue. One moment while we compile our Q&A roster. Our first question comes from the line of Eric Stine with Craig-Hallum Capital Group. Your line is open, sir. Please go ahead.
Operator: Thank you. To ask a question at this time, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. In fairness to all, we ask that you please limit yourself to two questions before reentering the queue. One moment while we compile our Q&A roster. Our first question comes from the line of Eric Stine with Craig-Hallum Capital Group. Your line is open, sir. Please go ahead.
Speaker #1: If you have a question at this time, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again.
Speaker #1: In fairness to all, we ask that you please limit yourself to two questions before reentering the queue. Thank you. One moment while we compile our Q&A roster.
Speaker #1: Our first question comes from the line of Eric Stein with Craig Hallam Capital Group. Your line is open, sir. Please go ahead.
Eric Stine: Hi, Sally, hi, Per. Good morning.
Eric Stine: Hi, Sally, hi, Per. Good morning.
Speaker #2: Hi, Sally. Hi there. Good morning.
Per Brodin: Morning.
Per Brodin: Morning.
Operator: Morning.
Sally Washlow: Morning.
Speaker #4: Good Good morning. morning.
Eric Stine: Hey, so maybe just starting with the external lighting project, the $14 to 15 million, obviously, very good to see. Just curious, I know some contribution in Q4, but maybe, you know, just for help on our side, you know, any early thoughts on kind of linearity of revenue, Q1, Q2 of fiscal 2027? And then it also sounds like, you're pretty optimistic that, you know, I know you've been doing work with, significant work with Home Depot over time, but, you know, that this $14 to 15 million has some expansion potential with it as well.
Eric Stine: Hey, so maybe just starting with the external lighting project, the $14 to 15 million, obviously, very good to see. Just curious, I know some contribution in Q4, but maybe, you know, just for help on our side, you know, any early thoughts on kind of linearity of revenue, Q1, Q2 of fiscal 2027? And then it also sounds like, you're pretty optimistic that, you know, I know you've been doing work with, significant work with Home Depot over time, but, you know, that this $14 to 15 million has some expansion potential with it as well.
Speaker #2: Hey, so maybe just starting with the external lighting project, the 14 to 15 million obviously very good to see. Just curious in Q4, but maybe just for help on I know some contribution our side, any early thoughts on kind of linearity of revenue, of fiscal 27, and then it also sounds like you're pretty optimistic one Q, two Q that I know you've been doing work with significant work with Home Depot over time, but that this 14 to 15 million has some expansion potential with it as
Per Brodin: Hey, Eric, it's Per. I think maybe the way to think about it is, you know, we did start with some of those projects in, say, late January of this quarter. We expect that effort to ramp in January, February, and March, and have said we expect the majority of that revenue to hit in the first half, and actually, we expect to be complete by the end of July. So I would think that there's, you know, some initial revenue and ramp in the Q4 here of 2026, then I would expect that over those first 5 months of fiscal 2027, it'll be a little bit more of a steady earnings on revenue.
Per Brodin: Hey, Eric, it's Per. I think maybe the way to think about it is, you know, we did start with some of those projects in, say, late January of this quarter. We expect that effort to ramp in January, February, and March, and have said we expect the majority of that revenue to hit in the first half, and actually, we expect to be complete by the end of July. So I would think that there's, you know, some initial revenue and ramp in the Q4 here of 2026, then I would expect that over those first 5 months of fiscal 2027, it'll be a little bit more of a steady earnings on revenue.
Speaker #3: Hey, Eric, it's Pear. I think maybe the way to think about it is we did start with some of those
Speaker #3: projects in, say, late well. January of this quarter, we expect that effort to ramp in January, February, and March, and have said we expect a majority of that revenue to hit in the first half and actually we expect to be complete July.
Speaker #3: So I would think that there's some initial revenue and ramp in the fourth quarter here of '26, over those first five months of fiscal '27, it'll be a little bit more of a steady earnings on
Eric Stine: Got it. That's helpful. And then the expansion potential, you know, kind of that project, if there is some, then maybe expand on that.
Eric Stine: Got it. That's helpful. And then the expansion potential, you know, kind of that project, if there is some, then maybe expand on that.
Speaker #2: Got it. That's helpful. And then the expansion potential, I'm just going to tie to that project. If there is some, then maybe expand on
Speaker #2: that.
Speaker #4: Yeah. Hi, Eric. We think that there's we've noted within this customer. We work closely potential expansion as with them day in and day out.
Operator: Yeah. Hi, Eric. We think that there's potential expansion, as we've noted, within this.
Sally Washlow: Yeah. Hi, Eric. We think that there's potential expansion, as we've noted, within this.
Sally Washlow: ... customer, we work closely with them day in and day out, that probably would not be in the, we'll call it, the first half of the year, as we, you know, continue to be a partner with them.
Sally Washlow: ... customer, we work closely with them day in and day out, that probably would not be in the, we'll call it, the first half of the year, as we, you know, continue to be a partner with them.
Speaker #4: probably would not be in That the, we'll call it the first half of the year, as we continue to be a partner with them.
Speaker #2: Okay. And then just second one quick. Very good to see the OPEX come down again. Pear, I believe you termed it as a result of ongoing cost reduction initiatives.
Eric Stine: Okay. And then just second one quick, you know, very good to see the OpEx come down again. Terry, I believe you termed it as a result of ongoing cost reduction initiatives. So, you know, where could that potentially go? I mean, is this a, is this a kind of a quarterly runway we should think about, or is, or is there potential, further reductions?
Eric Stine: Okay. And then just second one quick, you know, very good to see the OpEx come down again. Terry, I believe you termed it as a result of ongoing cost reduction initiatives. So, you know, where could that potentially go? I mean, is this a, is this a kind of a quarterly runway we should think about, or is, or is there potential, further reductions?
Speaker #2: So where could that potentially go? I mean, is this kind of a quarterly runway we should think about, or is there reductions? potential for the
Per Brodin: We'll continue to try to manage those operating expenses as closely as we can. I think a lot of that effort, as you would suspect, ends up being finding cost savings to mitigate other cost increases. So I would think that, you know, ongoing expenses would be at that level or potentially slightly more, but probably, you know, at least in Q4, that operating expense number would start with a six.
Per Brodin: We'll continue to try to manage those operating expenses as closely as we can. I think a lot of that effort, as you would suspect, ends up being finding cost savings to mitigate other cost increases. So I would think that, you know, ongoing expenses would be at that level or potentially slightly more, but probably, you know, at least in Q4, that operating expense number would start with a six.
Speaker #3: operating expenses as closely as We'll continue to try to manage those we can. I think a lot of that effort, as you would suspect, ends up being finding cost savings to mitigate other So I would think be at that level or potentially slightly more, but probably at least in Q4 that that operating expense number would start with a 6.
Speaker #2: Okay. Thank you.
Eric Stine: Okay. Thank you.
Eric Stine: Okay. Thank you.
Per Brodin: Thanks.
Per Brodin: Thanks.
Speaker #1: Thank
Operator: Thank you. And again, as a reminder, to ask a question, please press star one one on your telephone. Our next question comes from the line of Gowshihan Sriharan with Singular Research. Your line is open. Please go ahead.
Operator: Thank you. And again, as a reminder, to ask a question, please press star one one on your telephone. Our next question comes from the line of Gowshihan Sriharan with Singular Research. Your line is open. Please go ahead.
Speaker #1: you. And again, as a reminder to ask a Thanks. question, please press star 11 on your from the line of Gassi Rowe telephone. with Singular Research.
Speaker #1: Our next question comes Your line is open. Please go
Speaker #1: ahead. Good morning, guys.
Gowshihan Sriharan: Good morning, guys. Can you hear me?
Gowshihan Sriharan: Good morning, guys. Can you hear me?
Speaker #5: Can you hear me? All
Speaker #3: Yes.
Per Brodin: Yes.
Per Brodin: Yes.
Sally Washlow: Yeah.
Sally Washlow: Yeah.
Gowshihan Sriharan: Right. Congratulations on your quarter.
Gowshihan Sriharan: Right. Congratulations on your quarter.
Speaker #5: right. Congratulations on your
Speaker #5: quarterly. Thank you. On the maintenance side, you've clearly had some big win with the large retailer. I'm curious, just about the next year of customers, are you seeing those smaller, mid-sized enterprises adopt a similar preventative maintenance model, or is this still more of a one customer phenomenon at this
Sally Washlow: Thank you.
Sally Washlow: Thank you.
Gowshihan Sriharan: On the maintenance side, you've clearly had some big win with a large retailer. I'm curious about the next tier of customers. Are you seeing those smaller mid-sized enterprises adopt a similar preventative maintenance model, or is this still more of a one customer phenomenon at this stage?
Gowshihan Sriharan: On the maintenance side, you've clearly had some big win with a large retailer. I'm curious about the next tier of customers. Are you seeing those smaller mid-sized enterprises adopt a similar preventative maintenance model, or is this still more of a one customer phenomenon at this stage?
Speaker #5: stage? So no one's to
Sally Washlow: So no one's to the scale that this large retailer is for us in that division, but we are seeing increases month-over-month within some of our other customers, and continue to pursue new customers and contracts within the space.
Sally Washlow: So no one's to the scale that this large retailer is for us in that division, but we are seeing increases month-over-month within some of our other customers, and continue to pursue new customers and contracts within the space.
Speaker #4: the scale that this large retailer is for us in that division, but we are seeing increases month over month within some of our other customers.
Speaker #4: And continue to pursue new customers and contracts within the space.
Speaker #2: Gotcha. And with the strong run of contract wins with a handful of large customers, can you talk about how you're underwriting the execution risk?
Gowshihan Sriharan: Gotcha. And with a strong run of contract wins with a handful of large customers, can you talk about how you are underwriting the execution risk? I know in the past, you've experienced some delays. Any kind of orders or penalties? How much room is there in your margins and guidance if one of these programs experiences the kind of delays that you have seen in the past?
Gowshihan Sriharan: Gotcha. And with a strong run of contract wins with a handful of large customers, can you talk about how you are underwriting the execution risk? I know in the past, you've experienced some delays. Any kind of orders or penalties? How much room is there in your margins and guidance if one of these programs experiences the kind of delays that you have seen in the past?
Speaker #2: I know in the past you've seen some experience some delays. Any kind of orders or penalties? How much room is there if one of these in your margins and guidance you have seen in the programs experiences the kind of delays that past?
Per Brodin: I think that risk exists on an ongoing basis, and we say temper our outlook with that potentiality. So I would say that, you know, we have tried to take into account any issues that might arise that we have at least some visibility to at this point.
Per Brodin: I think that risk exists on an ongoing basis, and we say temper our outlook with that potentiality. So I would say that, you know, we have tried to take into account any issues that might arise that we have at least some visibility to at this point.
Speaker #3: Risk exists on an ongoing basis, and we say 'temporary outlook' with that potentiality. So I would say account for any issues that might arise, that we have at least some point.
Speaker #2: Gotcha. All right. I'll jump back in the queue. Thank
Gowshihan Sriharan: Gotcha. All right. I'll jump back in the queue. Thank you.
Gowshihan Sriharan: Gotcha. All right. I'll jump back in the queue. Thank you.
Speaker #2: you.
Speaker #1: Thank you. And one moment for our
Operator: Thank you. And one moment for our next question. Our next question comes from the line of Matt Dunn with Titan Capital Management. Your line is open. Please go ahead.
Operator: Thank you. And one moment for our next question. Our next question comes from the line of Matt Dunn with Titan Capital Management. Your line is open. Please go ahead.
Speaker #1: next question. Our next visibility to at this question comes from the line of Matt Dunn with Titan Capital Management. Your line is open. Please go
Speaker #1: ahead. Great.
Matt Dhane: Great. That's Matt Dhane with Tieton Capital Management. I wanted to ask about the distribution segment. You referenced that you're seeing some success there. Just wanted to get a little bit more color around that, what's driving that success and what type of runway you see with that as well?
Matt Dhane: Great. That's Matt Dhane with Tieton Capital Management. I wanted to ask about the distribution segment. You referenced that you're seeing some success there. Just wanted to get a little bit more color around that, what's driving that success and what type of runway you see with that as well?
Speaker #6: That's Matt Dane with Titan Capital. I wanted to ask about the distribution segment. You referenced that you're seeing some success there. Just wanted to get a little bit more color around that, what's driving that success, and what type of runway you see with that as
Speaker #4: Hi, Matt. So driving that success, the customers, expanding our relationships as noted. We expanded the team that calls on that channel earlier this year, and that's proving to bear fruit.
Sally Washlow: Hi, Matt. So driving that success, we're out there with the customers, expanding our relationships. As noted, we expanded the team that calls on that channel earlier this year, and that's proving to bear fruit. And also we're looking at developing products from the request of customers in that channel as well. So we expect to engage further in the channel, and deliver the products that they're asking for us to deliver as well.
Sally Washlow: Hi, Matt. So driving that success, we're out there with the customers, expanding our relationships. As noted, we expanded the team that calls on that channel earlier this year, and that's proving to bear fruit. And also we're looking at developing products from the request of customers in that channel as well. So we expect to engage further in the channel, and deliver the products that they're asking for us to deliver as well.
Speaker #4: And also, we're looking at developing products from the request of well. So we expect customers in that channel as channel to engage further in the and deliver the products that they're asking for us to deliver as well.
Speaker #6: Great. Great. Thanks, Sally. I did also want to ask about the infrastructure opportunity. Electrical infrastructure opportunity. How much revenue are you getting from that newer area of your business to date?
Matt Dhane: Great. Great, thanks, Sally. I did also want to ask about the infrastructure opportunity, electrical infrastructure opportunity. How much revenue are you getting from that newer area of your business to date? And I guess I just have a hard time really sizing how large the opportunity is over time. What can you share around all that?
Matt Dhane: Great. Great, thanks, Sally. I did also want to ask about the infrastructure opportunity, electrical infrastructure opportunity. How much revenue are you getting from that newer area of your business to date? And I guess I just have a hard time really sizing how large the opportunity is over time. What can you share around all that?
Speaker #6: Really sizing how large the— and I guess I just have a hard time— what can you share around all the opportunity is over time, that?
Sally Washlow: So the shape of the revenue that we get, you know, is certainly evolving from what traditionally we'd say, product sales, and that, some of that even comes from the EV segment and the installation that we do there. But where... And we're developing this, so I guess I don't have a hard number for you, but, you know, where we're getting some of these projects from is expansion within maybe an installation job that we had, and there's expanded work to do on site. We're there, and they're requesting us to do that expansion of work, which can be, you know, seven figures, in terms of the scope of those jobs that they ask us to do. So initially, when we got there, we didn't expect it, and then it's further grown.
Sally Washlow: So the shape of the revenue that we get, you know, is certainly evolving from what traditionally we'd say, product sales, and that, some of that even comes from the EV segment and the installation that we do there. But where... And we're developing this, so I guess I don't have a hard number for you, but, you know, where we're getting some of these projects from is expansion within maybe an installation job that we had, and there's expanded work to do on site. We're there, and they're requesting us to do that expansion of work, which can be, you know, seven figures, in terms of the scope of those jobs that they ask us to do. So initially, when we got there, we didn't expect it, and then it's further grown.
Speaker #4: So the shape of the revenue that we get is certainly evolving from what traditionally we'd say product sales and some of that even comes from the EV segment and the installation that we do there.
Speaker #4: But where and we're developing this, so I guess I don't have a hard number for you. But where we're getting some of these projects from is expansion within maybe an installation job that we had and there's expanded work to do and they're requesting us to do that expansion of work, which can be seven figures.
Speaker #4: terms of the scope of those jobs that they ask us to do. So initially, when we got there, we didn't expect it, and then it's further
Speaker #4: grown. Okay.
Matt Dhane: ... Okay, and so is it, how significant is the revenue that is contributing so far? Or is it still, it's really not a huge amount of revenue, and it's more of a future expected additional revenue that it's gonna add?
Matt Dhane: ... Okay, and so is it, how significant is the revenue that is contributing so far? Or is it still, it's really not a huge amount of revenue, and it's more of a future expected additional revenue that it's gonna add?
Speaker #6: And so is
Speaker #6: it how significant is the revenue that's contributing so far, or is it still it's really In not a huge amount of revenue, and it's more of a future expected additional revenue that it's going to
Speaker #6: add?
Speaker #4: Yeah.
Sally Washlow: Yeah, we're continuing to build it, and as we build out our plans for next year, we look at, you know, what the potential of this could be.
Sally Washlow: Yeah, we're continuing to build it, and as we build out our plans for next year, we look at, you know, what the potential of this could be.
Speaker #4: We're continuing to build it, and as we build out our plans for next year, we look at what the potential of this could
Speaker #3: Maybe a different way to think about it, Matt, is we have
Per Brodin: Maybe a different way to think about it, Matt, is, you know, we have had some good wins on that standpoint, both from, I'll say, an overall win on a couple jobs, and we've also had, to Sally's point, a couple expansions on what started as lighting projects. That is not yet fully in our results through the end of Q3. A lot of that could, is, I'll say, one business, but some of that will be recognized in Q4, and some of that will go into fiscal 2027, and we're hoping to build on those successes as we go. So it's a little hard to size it at this point.
Per Brodin: Maybe a different way to think about it, Matt, is, you know, we have had some good wins on that standpoint, both from, I'll say, an overall win on a couple jobs, and we've also had, to Sally's point, a couple expansions on what started as lighting projects. That is not yet fully in our results through the end of Q3. A lot of that could, is, I'll say, one business, but some of that will be recognized in Q4, and some of that will go into fiscal 2027, and we're hoping to build on those successes as we go. So it's a little hard to size it at this point.
Speaker #3: had some good wins on that standpoint, both from, I'll say, be. an overall win on a couple of jobs and we've also had the Sally's point, a couple of expansions on what started as lighting projects that is not yet fully in our results through the end of is, I'll say, one business, but some of that will be recognized in Q3.
Speaker #3: A lot of that Q4, and some of that will go into fiscal 27, and we're hoping to build on those successes as we go.
Speaker #3: So it's a little hard to size it at this
Speaker #3: point. Great.
Matt Dhane: Great. I appreciate the help.
Matt Dhane: Great. I appreciate the help.
Speaker #6: I appreciate the help.
Per Brodin: Thanks.
Per Brodin: Thanks.
Speaker #1: Thank you. This concludes the question and answer session. I will turn the call back over to
Operator: Thank you. This concludes the question and answer session. I will turn the call back over to Sally Washlow for concluding remarks.
Operator: Thank you. This concludes the question and answer session. I will turn the call back over to Sally Washlow for concluding remarks.
Speaker #1: Sally Washlow for concluding
Speaker #1: remarks. I want to thank everyone Thanks.
Sally Washlow: I want to thank everyone again for taking time to join us today. We look forward to updating investors on our Q4 call in early June. Between now and then, we look forward to meeting with many of you or to meet, whether it's in person or virtually. We will be presenting at a number of conferences, so please watch for our forthcoming announcements regarding scheduling. Please also reach out to our investor relations team to set up a meeting or for any other information. Their contact information is at the bottom of today's press release. Many thanks again for your interest in Orion. I look forward to continuing to update you on our progress.
Sally Washlow: I want to thank everyone again for taking time to join us today. We look forward to updating investors on our Q4 call in early June. Between now and then, we look forward to meeting with many of you or to meet, whether it's in person or virtually. We will be presenting at a number of conferences, so please watch for our forthcoming announcements regarding scheduling. Please also reach out to our investor relations team to set up a meeting or for any other information. Their contact information is at the bottom of today's press release. Many thanks again for your interest in Orion. I look forward to continuing to update you on our progress.
Speaker #7: again for taking time to join us today. We look forward to updating investors on our fourth quarter call in early June. Between now and then, we look forward to meeting with many of you or to meet whether it's in person or virtually.
Speaker #7: We will be presenting at a number of conferences, so please watch for our forthcoming announcements relations team to set up a meeting or for any other Please also reach out to our investor information.
Speaker #7: Their contact today's press release. Many thanks again for your interest in Orion. I look forward to our continuing to update you on progress. information is at the bottom of
Operator: Thank you. This concludes today's conference call. You may all disconnect. Everyone, have a great day.
Operator: Thank you. This concludes today's conference call. You may all disconnect. Everyone, have a great day.
