ORION ENERGY SYSTEMS, INC. (OESX)·Q1 2026 Earnings Summary

Executive Summary

• Q1’26 revenue was $19.6M vs $19.9M in Q1’25 and $20.9M in Q4’25, with GAAP EPS of $(0.04); gross margin expanded to 30.1% (six-year high) on pricing, mix, and cost actions .
• Versus S&P Global consensus, revenue was slightly below ($19.58M actual vs $20.00M consensus*) while GAAP EPS was a material beat (($(0.04) actual vs $(0.55) consensus*)); GAAP EBITDA trailed consensus (actual $(0.53)M vs $(0.10)M consensus*) *.
• Management reiterated FY’26 outlook: ~5% revenue growth to ~$84M and “approach or achieve” positive adjusted EBITDA; EV charging revenue expected flat to slightly down given funding uncertainty; EV backlog ~$8M .
• Narrative catalysts: sustained >30% gross margin, distribution channel rebuild (TritonPro), electrical infrastructure expansion (up to $7M automotive awards), and Boston Public Schools EV win ($6.5M). A 1-for-10 reverse split announced post-quarter aims to regain Nasdaq compliance, potentially reducing listing overhang .

What Went Well and What Went Wrong

• What Went Well

  • Margin inflection: Gross margin reached 30.1% (six-year high) on pricing, mix, and cost reductions; three straight quarters of positive adjusted EBITDA ($0.2M) .
  • Segment execution: Maintenance +21% Y/Y to $4.0M; LED +1% Y/Y to $12.9M; EV gross margin steady at ~33.5% despite revenue timing variability .
  • Strategic traction: Electrical infrastructure opportunity expanding (awards up to $7M with three auto OEMs); CEO: “I am…certain” Orion can deliver $84M revenue and positive adjusted EBITDA FY’26 .

• What Went Wrong

  • EV revenue headwinds: EV charging down to $2.7M (vs $3.8M Q1’25) on tough comp and project timing; visibility constrained by funding uncertainties .
  • Sequential revenue dip: Total revenue declined from $20.9M in Q4’25 to $19.6M in Q1’26 as EV pulled back versus a strong Q4 .
  • One-time costs and liquidity watch: Q1 included ~$0.6M executive sign-on and severance; liquidity declined to $9.8M as revolver was paid down by $1.75M; working capital fell to $6.1M .

Financial Results

Actuals across recent quarters (oldest → newest):

Q1’26 actual vs S&P Global consensus (estimates marked with *):

Values retrieved from S&P Global.*

Segment revenue by quarter (oldest → newest):

Additional KPIs:

Context vs prior year: Q1’26 revenue $19.6M vs $19.9M (Q1’25); gross margin 30.1% vs 21.6%; net loss improved to $(1.2)M from $(3.8)M .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Our Q1’26 gross profit percentage of 30.1% was the highest quarterly margin in six years… We achieved our third consecutive quarter of positive adjusted EBITDA” — Sally Washlow, CEO .
• “We expect a sequential revenue improvement in Q2 2026, primarily due to the school bus project and one other significant contract” — Per Brodin, CFO .
• “We were recently awarded up to $7.0M in electrical infrastructure and LED lighting projects by three automotive customers” — CEO .
• “We expect to manage tariffs to a net neutral impact for the business” — CFO .
• “We are…on track to achieve…$84,000,000 in revenue at a positive adjusted EBITDA for the full fiscal year” — CEO .

Q&A Highlights

• Electrical infrastructure initiative: Early innings; current infrastructure sufficient to scale with demand; leverages EV capabilities; customers are requesting expanded scope beyond lighting .
• Boston Public Schools electrification: Multi-site expansion announced ($6.5M); prior phases ~$1.3M and ~$1.0M; new deployments include 51 DCFC at two sites with above-ground mounting .
• Pipeline and timing: Management expects benefits into FY’27 as projects flow from pipeline to awards; Q2 revenue seen higher sequentially on school bus and another contract .
• Regulatory drivers: State fluorescent bulb restrictions are a tailwind but enforcement timing varies; ROI remains primary customer driver .
• Tariffs: Expect to offset via pricing/diversified sourcing; domestic manufacturing cited as advantage .

Estimates Context

• Q1’26 vs consensus: Revenue $19.58M vs $20.00M consensus* (slight miss); GAAP EPS $(0.04) vs $(0.55)* (beat); GAAP EBITDA $(0.53)M vs $(0.10)M* (miss). Coverage was thin (2 estimates for revenue and EPS)* *.
• Recent estimate track record:

Values retrieved from S&P Global.*

Implication: Street models appear conservative on EPS but have been high on revenue in recent quarters; post-margin improvements, EPS estimates may need upward revision, while revenue trajectories remain project-timing sensitive.

Key Takeaways for Investors

• Margin story is real: 30.1% gross margin and lower OpEx delivered third straight positive adjusted EBITDA despite softer EV revenue; sustaining ~30% GM is a central re-rating lever .
• Mix and pipeline support 2H cadence: LED and maintenance strength plus government/auto awards should offset EV lumpiness; Q2 guided higher sequentially on school bus and another contract .
• Distribution rebuild under new leadership (TritonPro) can add incremental, higher-velocity revenue in a price-competitive channel .
• EV remains a selective growth vector: backlog ~$8M; funding noise persists, but school-bus and fleet projects demonstrate continued demand; set expectations to “flat-to-down” FY’26 per guidance .
• Electrical infrastructure is an emerging vector with OEM validation (up to $7M awards); watch for conversion of bids and margin profile .
• Balance sheet discipline continues: $1.75M revolver paydown in Q1; liquidity of $9.8M; monitor working capital and any further earnout resolution cash needs .
• Post-quarter 1-for-10 reverse split seeks to regain Nasdaq compliance—potentially removing a listing overhang once effected (Aug 22, 2025) .

Additional context and sources:

• Q1’26 press release and 8‑K (financial tables, guidance, outlook) .
• Q1’26 earnings call (segment margins, Q2 sequencing, strategy updates) .
• Related press releases: Boston Public Schools $6.5M EV deployment; auto electrical infrastructure awards up to $7M .
• Prior quarters (trend and guidance initiation) .