Orion Energy ((OESX)) has held its Q4 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Orion Energy presented a mixed sentiment, highlighting significant achievements in the electric vehicle (EV) charging business and cost reductions, while also addressing challenges in the lighting segment and a decline in overall revenue. The company reported a slight net loss for the fiscal year, reflecting both the successes and hurdles faced during the period.
Strong Growth in EV Charging Business
The Voltrek electric vehicle charging station solutions business was a standout performer, achieving a remarkable 37% growth in revenue. This growth was accompanied by improved gross margins, which rose to 28.3% in FY ’25 from 27.2% in FY ’24, showcasing the company’s successful expansion in this sector.
Cost Reductions and Improved Margins
Orion Energy made significant strides in reducing costs, particularly in LED lighting fixtures and operating overheads, achieving savings of more than $4 million in FY ’25. These efforts are set to continue, with further reductions planned for FY ’26, leading to increased gross profit margins and a stronger financial position.
Business Reorganization for Growth
The company has reorganized into two commercial business units, Solutions and Partners, to better capitalize on its strengths. This strategic move aims to optimize success across its LED lighting, EV charging, and electrical maintenance operations, positioning Orion for future growth.
Positive Adjusted EBITDA
Despite the challenges faced, Orion achieved positive adjusted EBITDA in both Q3 and Q4, along with positive operating cash flow for the full fiscal year. This financial performance underscores the company’s resilience and ability to manage its operations effectively.
Decline in Overall Revenue
Orion reported a decline in overall revenue for fiscal ’25, with figures dropping to $79.7 million from $90.6 million in fiscal ’24. The LED lighting segment, in particular, saw a significant decrease, trailing prior year periods by 33% in Q4 ’24 and 22% for the full year.
Challenges in Lighting Segment
The lighting segment continued to face challenges in FY ’25, with reduced major project activity and product demand impacting revenue. This remains a key area of concern for the company as it seeks to stabilize and grow this segment.
Net Loss for Fiscal ’25
Orion reported a slight increase in net loss for fiscal ’25, amounting to $11.8 million or $0.36 per share, compared to a net loss of $11.7 million or $0.36 per share in fiscal ’24. This reflects the ongoing challenges in the company’s operations and market conditions.
Forward-Looking Guidance
Looking ahead, Orion Energy Systems has provided guidance for fiscal year 2026, projecting a revenue growth of approximately 5%, targeting around $84 million. The company remains committed to optimizing its strengths and achieving growth and profitability goals, despite the challenges faced in the past fiscal year. The reorganization into two business units and continued cost reductions are expected to support these objectives.
In summary, Orion Energy’s earnings call highlighted a mixed performance, with significant achievements in the EV charging business and cost reductions, balanced by challenges in the lighting segment and a decline in overall revenue. The company’s forward-looking guidance suggests a cautious optimism, with plans for growth and improved profitability in the coming fiscal year.