Orion Energy Systems (NASDAQ:OESX) reported fiscal 2027 first-quarter revenue growth of 32% year over year and its seventh consecutive quarter of positive adjusted EBITDA, while reaffirming its full-year outlook for revenue of $95 million to $97 million and positive adjusted EBITDA.
Revenue for the quarter totaled $25.7 million, compared with $19.6 million in the prior-year period. Net income was $2 million, or $0.47 per diluted share, compared with a net loss of $1.2 million, or $0.37 per share, a year earlier. Adjusted EBITDA rose to $2.5 million from $200,000 in the first quarter of fiscal 2026.
Segment Results and Margins
LED lighting revenue rose to $17.7 million from $12.9 million in the prior-year quarter. CFO Per Brodin said the increase reflected higher project activity and distribution-channel sales, partly offset by lower sales through the energy-service-company, or ESCO, channel. The lighting segment’s gross margin increased to 37.8% from 31.8%.
Maintenance revenue was $4.1 million, compared with $4 million a year earlier, while segment gross margin improved to 28.3% from 22.4%. Brodin said the margin improvement was “relatively structural,” reflecting continued efficiency gains and product-service mix, although he noted that quarterly mix can vary. He characterized the first-quarter maintenance margin as a particularly strong result and said the business is largely within its expected margin range.
EV charging solutions revenue increased to $4 million from $2.7 million. The segment’s gross margin declined to 26.9% from 33.8% in the prior-year quarter. Brodin said the business showed relative strength despite uncertainty in the broader U.S. EV market.
Consolidated gross margin rose to 34.6% from 30.1%. The first-quarter result included an approximately 130-basis-point benefit from the net effect of tariff changes and refunds. Brodin said Orion expects gross margin to remain strong during fiscal 2027 but to fluctuate by quarter based on sales volume and revenue mix. Excluding unusual tariff-related benefits, he said the company is currently thinking about a consolidated gross-margin range of roughly 30% to 32%.
Total operating expenses declined to $6.8 million from $6.9 million. Lower compensation and general-and-administrative expenses were largely offset by higher commissions and sales-and-marketing costs, Brodin said.
Data Centers and Customer Opportunities
Washlow said Orion has begun initial product shipments to its first data-center customer following the company’s entry into the hyperscale data-center market. However, she said the business is still in its early stages and that most data-center revenue is expected in the company’s next fiscal year rather than fiscal 2027.
The company has worked with a customer for several months to tailor a lighting product designed for data-center installations, according to Washlow. She said the sales cycle can vary, particularly when product development and customer build-out schedules are involved. Orion expects to pursue primarily new data-center construction, rather than replacement lighting projects, because many existing facilities are relatively new.
Washlow said data-center projects are often won building by building on a campus, and individual buildings can represent seven-figure opportunities. She added that customers generally use more than one supplier to mitigate risk.
Orion also continues to pursue an interior lighting opportunity with a large customer after completing most of a previously discussed exterior lighting project valued at about $15 million. Brodin said most revenue from that exterior project was recognized during the fourth quarter of fiscal 2026 and the first quarter of fiscal 2027. The potential interior project has not yet been ordered, though management said it is progressing and remains an opportunity in the near term.
Backlog and Outlook
Brodin said Orion exited the first quarter with backlog of approximately $24 million. He said management believes the sales pipeline continues to improve and expects significant conversions as projects advance.
The company maintained its fiscal 2027 outlook for revenue of $95 million to $97 million and positive adjusted EBITDA. Brodin said that if Orion achieves its revenue guidance, a return to negative EBITDA would likely require an unanticipated deterioration in gross margin or unexpected operating expenses.
Management said it does not expect a meaningful fixed-asset investment to support data-center or roadway-lighting programs. Brodin said any related investment would be minimal and would primarily affect gross margin through amortization over time.
Washlow and Brodin also said Orion’s revenue does not follow a pronounced seasonal pattern, though project timing and weather can affect individual quarters. Brodin noted that the recently completed exterior lighting project helped support first-quarter revenue, and said the company is not expecting the same fiscal-year revenue ramp seen in some prior years.
About Orion Energy Systems (NASDAQ:OESX)
Orion Energy Systems, Inc is a U.S.-based provider of energy-efficient lighting and building controls solutions. Founded in 1996 and headquartered in Manitowoc, Wisconsin, the company specializes in designing, manufacturing and deploying LED lighting fixtures and integrated energy management systems for commercial and industrial customers.
The company’s product portfolio includes a range of LED light fixtures, smart sensors, networked controls and cloud-based energy management software.
