OESX - Earnings call transcript Q2 2025 | Orion Energy Systems, Inc.

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Operator

Good morning, everyone, and welcome to Orion Energy Systems' Fiscal 2025 Second Quarter Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I'll now turn the call over to Bill Jones, Investor Relations, to begin.

Bill Jones

Thank you, Kathy, and good morning to everyone, and thank you for joining this call. Orion reported its fiscal 2025 second quarter results this morning. And Mike Jenkins, the company's CEO; and Per Brodin, Orion's CFO, will review its Q2 results, financial position, and fiscal 2025 outlook.

we the remarks, questions. to prepared their will call open investor Following website, conference and Investors in corporate recorded is section replay Orion's Today's being posted a call will be of orionlighting.com. the

answers to a which forward-looking of the under remarks Act As Securities Reform questions are Litigation reminder, Private XXXX. follow include that statements, and

well forward-looking words. Except company GAAP typically describing These their in Orion the future today. Reconciliations as statements over any expectations. has call include described anticipate, today's press as with of forward-looking release. And are plans, revise disclaims matters, Forward-looking also Orion only non-GAAP as as other to any its statements such also to Mr. statements therein, to are which financial filings believe, those SEC. I'll CEO, its expect, from include, Risks various closest update the could obligation and or goals, turn of to measures Also, as words now Orion's Jenkins. in project, or outlook that among certain statements, to current are or risks such Mike similar actual its cause subject issued provided this objectives differ made forward-looking. that release described are materially morning in results press metrics

Michael Jenkins

and thank today. Bill, Thanks, you all us for joining

business. EV business and station our a charging results our QX Voltrek strength in maintenance continued Our services in reflect rebound

And complete, to the $XX a is the stores POs that new we quarter. The retrofit LED be in fixtures new we over also quarter. our comparables some not and service quoting the seeing are $XX over lighting and a million. year. from excess as year of customers. We to be products and projects, contract ESCOs in expects X XXX in as to X and recently by this for project providing for contract we half in the 'XX multiyear program period, quarter impacted customer, This our fiscal segment major who the Orion lighting benefited once but expected some Despite be which LED start super final million large make were we of several start delays plan markets. Year-over-year quarter will the our and European electrical for total or national new for a delays energy construction month, for X-year influenced number new services, project secured management ago contractors will with the quarter several robust 'XX in companies a and new next anticipate retailer. existing existing channels, with are distributor of to in over slipped was lighting increase timing the activity of customer second project in second announcements. Last customer value coming including relationship begin Distribution customer, now years. relationship contract retrofit new this construction well store extends However, of our with locations. as projects projects LED and further stages. largest to to impacted delays global softness start by full project This lighting both in ESCO supply our were and will expected a this business commenced received program the expected products retrofit X turnkey completion years multiyear overall, LED spread our

year lighting quarter year. sensitive contractors such of X offerings, do that slowness success and UFOs, category a coming in Troffers. our in brand Bays over as TritonPro the progress opportunity are more we These our lighting of to the LED of million. were of quarters. Despite we opens investing were price levels Orion a customer developed lines value products and and some million $X in projects our an activity on lighting seeing of We by automotive with sector released continued are our of quarter new for our LED and in exterior meet acceleration the in lighting TritonPro for have rebound which these fiscal in require distribution We Lights 'XX $XX last price expect to products moving this revenue launches Round and year new ESCOs in of open are commence this in including this not introduced broaden exterior efficiency. Building product also recent High new needs base. of and over nice other our expansion TritonPro offerings, are of highest which X era to and pipeline products, forward, new our or of value-oriented recent and product channels, last generated OEM projects encouraged in anticipate strength build the Strip in

or lighting into regulations through which either bans, such We have fixtures tubes. more California, and of to proposed states, XXXX, eliminate energy passed states replacement are the the pollution go from fluorescent expected this created and These for conversion number including of technologies. Ten the opportunities tubes the of LED fluorescent and are sale that beginning accelerating have are conserving trend. the to bans building to also follow many banning waste while of legislation growing also sales disposal related are to effect of states several energy-efficient intended now

and half of plans We discussions commence and have for a about in identified our fiscal the meaningful in existing some expect significant have been that second number to with of we potential opportunities 'XX. compliance customers their

website bans at all and proposed, please For orionlighting.com. our state see a current list of

Turning to our station electric vehicle business. charging

in and customers half with Eversource's future. pursuant this and business 'XX performance We construction continue fiscal our for EV from the contracts Make-Ready for Energy Eversource quarter momentum X foreseeable pleased to second the to be in segment anticipate of the continued Voltrek's progress benefited program.

building work Schools, school pilot additional Public also earlier bus Our benefited on X quarter project. an performance for Boston from

for are station seeing EV vehicles needs implementing with and Voltrek a believe the array private support both large reach programs expanding well is and across electric U.S. We We to its in that leadership of the EV strategies charging nationwide. and to public or charging growing the organizations population national plans are sector EV of business of pioneering the developing meet positioned customers

at federal sourced charging overall to acquired pipeline customer has federal LED we also appropriated realize we lighting of the $X $X.X Meaningful billion vehicles, we program, Vehicle base infrastructure. program our Infrastructure of projects synergies million. at the lighting National EV Act over EV states, and charging developed steady had accelerate million as infrastructure billion X grant local including to support to $XX years. This infrastructure, other is opportunities project entities within when NEVI fueling projects targeted stimulus with well beginning designated other Importantly, or an customers. Voltrek's along with which are the include cross-selling funding some and Voltrek being with EV charging program, as for municipalities, envisioned $XX which been additional help Electric being remain provides to

public electric and near-term of opinions see remains interest future infrastructure. and a from private we penetration of increase rate vehicles, for the entities spectrum there market of broad-based charging about While

throughout infrastructure the EV the and put charging end is in achieve low to U.S. place infrastructure high next be the in the range, whether required sales decade. of or business over are vast We the

services to to revenue am Turning this performance happy maintenance our delivered in business X. business. a that I report quarter better-than-expected

unprofitable was margin the performance decision margin quarter returned despite the of accomplished we discipline, in renewal had profitability to inflationary due the acquisition, a Stay-Lite decrease expected particularly from our fiscal Second million $X it pricing contracts. the to of 'XX, strategic nonrenewal principally seek to had year solid of from become also due Maintenance negative contracts This from segment was not period. gross benefited unprofitable which impacts. Entering $X to performance impact maintenance our because several legacy the to business million, to notable which revenue ago these

Given our be decline existing customers, range. expect revenue fiscal this now than additional maintenance we from in our recent 'XX progress to lower developing

this profitability our a to business to enabled X,XXX with discipline basis Importantly, has improvement. point pricing return us

We costs staffing a further we facility, leased profitable quarter but in roughly X. expect smaller, in to reducing rate business, and in more and our improve related a items of executed resulting maintenance normalize restructuring costs and With and our $XXX,XXX vacated quarter in restructuring by X. margin go-forward severance

is lighting by for we prices. our our believe plan X a perspective, the offers business tailwinds Moving selectively and EV years. build with that to are energy with we that provide forward, From the encouraged customers #X, factors potential next over Orion synergies this macro segments. greatest

conservation, capacity up forward While increases ESG. down, LED they moving lighting. #X, see energy such needs move increased that more focus energy climate and we than will result as in and on

lighting lighting customers versus our leading to and see energy C-level before-seen infrastructure, manufacturing state is fluorescent Orion this lastly, for full generational and electrification we especially our plays. will to LED of with what circles, on lights This levels years. And initiatives industry-leading capabilities. at transportation to -- BAA commitments some focus next reduce to the LED uniquely goals. #X, industry, Orion and is is and bans. the Buy is American which XX% carbon. play electrification. While Passenger reduce BABA. the achieve a required is exciting potential change is politicized and in very entities, charging up X will by where commercial continue a help over state-led to companies, Orion's and out increasing enable public federal their accelerator positioned many domestic never capitalize and the consumption #X, these fluorescent due lighting

as interest and customers' We rates projects. decreasing to EV the charging a for accelerate act also see catalyst potential to LED

long-term moving funds 'XX our their further While of environment of expect growth recent waiting rate the it meaningful easing remain excited are in we decision-making, a the case take federal welcome prospects who into solutions. We basis year. will more cut becomes lower a Certainly, business next time factor point was in enhances on fiscal our rate for revenue customers' our further our reductions. outlook about suite before reversal, and particularly those XX now for customers and a rate with rates Fed's planned the

and our confidence that and platform our have based business, we our help environmental, Our products of competitive meet on goals. sustainability developed customers services strength is diversified their of to

our XX% have fiscal last we 'XX we from our prior increase XX% revised an approximately outlook of XX% to over 'XX growth. of growth week, to fiscal outlook As previewed revenue

As our and expect be neutral more to EBITDA the we And fourth we due result, we second of generate for 'XX. our principally into 'XX towards certain fiscal year. second half fiscal weighted the as this expect positive in and delay of to balance of adjusted to have half full LED lighting outlined, currently quarter, projects the is fiscal 'XX the a revision revenue of the

and details further Let on performance. me some perspective now turn CFO, Per Brodin, our our to financial for

Per Brodin

Thank you, this period, now Mike. million reflecting expect QX 'XX $XX.X the to start we in later some delay $XX.X QX fiscal LED lighting million principally projects anticipated 'XX, the versus recent revenue was of year. in which

Additionally, QX pilot first XX% in completed in The contrast, the retrofit contracts customers million DoD School's Make-Ready benefited to program Eversource segment Energy's million comparison Boston year-over-year our $X.X from for construction impacted but benefited from the segment Lighting 'XX station In results, as a year was current of Public was in well bus by of QX as follow-on QX performance orders project. in from revenue ago EV fiscal that charging $X.X Europe a 'XX school grew large year. revenue large project the the EV quarter 'XX.

grew also in QX more $X.X versus contracts. segment the opportunities impact Lighting QX Stay-Lite $X.X Services lapsed Maintenance million offset of Our as million the new than 'XX legacy to 'XX in

and a growth in versus $XX.X year months profit operations cash or prior rose from gross margin XX, in is or 'XX, X to million basis and was in 'XX, the XX.X% QX fiscal by working revenue September primarily assets in The proceeds lower at profitability from million June $X.X adjusted to growth. October X current at first period, credit or the X.X% share 'XX increased million to was EV our points and by revolving of the XX.X% to facility million of at Reflecting segment gross use strong net XX, to segment our first the financial expense secured believe outlook, operating other in of from to expense per a September of 'XX XX bank March to QX in compared to business, fund complete. I versus at $X cost X QX pricing to in expenses 'XX. restructuring to of Maintenance per the Maintenance of Looking revolving principally also for actions Current close included first are was following We from to million million do maintenance which compared our benefit loss gross and Overall, accounts. other 'XX. $X.XX down to overhead. cash severance XXXX. $X.XX QX driven driven discipline. Gross though XXXX. September versus accrual percentage million benefits $XX.X QX $X.X liquidity contributed flow 'XX. Also, QX March in $X.X remain and of to in we 'XX. QX result positive our net in improvements with that in year-end, expenses XXXX. $X.X corporate blended maturity we improved at margins million reduction ended paid the our have our our extended our at margin Orion growth fiscal due XXXX, to for and in on and $XX.X liquidity, million mortgage the in the the Orion's or manufacturing liabilities the improvement we 'XX. Cash Orion's 'XX in declined and led 'XX, the facility the remainder QX XX, working year XX, Operating through million continued facility prior maintenance in million as a expenses due from QX profit 'XX now XX less includes goals of share earn-out and legacy months $XXX,XXX we XXXX operations versus reductions QX in margin $X.X quarter. In margin total, segment, costs this actions to the our costs to substantially expect productivity $X.X believe X,XXX of the QX 'XX. rightsize gross to months in business roll-off capital position we of LED capital $XX.X America at Orion's and restructuring principally Bank points incurred segment turnaround Orion's December loss $XX.X generated cash requirements. combined basis fiscal overall million growth Orion's and maintenance QX services percentage have $XXX,XXX services business in $X.X million have of the Voltrek improvements fixed restructuring outlook Orion its 'XX and increased of The maintenance financial unprofitable pursue credit of year-to-date severance compensation-related outside 'XX reflecting is highlight good on as from want fiscal efficiency Considering that $XX.X effective XXXX. a million noncash net used $XXX,XXX we and improvement XX, XXXX, activity in

I conferences to Before announce over investor I welcome operator, to your turn call participation. remaining the two want we this the year, and we have calendar that

November Thursday, Investor We on XX. Summit will participate Virtual the in

plan Singular Francisco Thursday, page. And Conference will XXth separately for start at Best on events we Annual Uncovereds to Relations XX. our please session. announced in the addition, In to Investor posted San Q&A these that, Research's with Details present of the December and person let's be in

Operator

Our Instructions] Eric the Craig-Hallum first question [Operator line from comes Capital Group. Stine of with

Eric Stine

that see Can So EV a talked obviously, through you XX% maybe little bit the various you how year-over-year mean, between so playing about revenue expectation. I growth just up. you segments? talk -- the charging out

flat, the that? where with How should expectation expect that you we project lighting think that think the down? your about maintenance. even I this Is tempered for pushouts something up, is LED, you

Michael Jenkins

the we slightly from we've second and business our X. standpoint, head those unprofitable in even quarter to expect business recovery above the do a and restructuring as contracts. exiting we've into maintenance with year EV Yes. our accelerate, of lighting similar essentially been the our expect into half. or half recover second maintain We especially And pace that the We to seen a pleased do very LED post several revenue

And million announced $X bottom profitable million. into down maintenance the so went year business much in range to the $X the slightly being to as business we come now though, we a contributing under and that Obviously, think we more of our will that do line.

Eric Stine

what maybe prepared just said? you and but is but the light it on touch little this, more you this I And -- maybe said it, being should Is on you this remarks versus a to missed something we did results in it. about and of in more skewed just think XQ XQ

Michael Jenkins

QX. stronger expect we do Yes, Absolutely. a

Eric Stine

this then can really And saying, we I at or pushouts. I and going are looking how of I it's are is But this business overall the your in mean, Because, there with any these you appreciate, anticipate customer-directed some customers. had I just been is mean, this know better that forward? and kind a of -- you've way our internally project can that frequent in outlook all -- issue a

Michael Jenkins

mean, et Yes. more things customers company, we can anticipate build is pipeline Eric. so may that to It's we it's thing, and talk best a a The control that to as our that when we because difficult as projects cetera. projects more a that don't about It's push other very company out that bit. have to do because continue that. a around contingency quite necessarily related thing may challenging individual have we they obviously, to I

pipeline So when things we have overcome it. that do those can occur, enough other

our I new some to see with we're the my really growth in exciting works. focus. referenced pleased pipeline as our we're -- that's the So very And in remarks, in projects

Operator

with the comes question next H.C. of Amit Wainwright. line Dayal from Our

Amit Dayal

implemented? of sort tariff Just exposure level, election changes the with any that results, to macro guys, the respect at be may discussed to a or impact

Michael Jenkins

tariffs the board, or across place any Yes. we get components interesting we Certainly, industry local to were that domestic as do were At against the from If number, and import I really sources manufacturer, put time, content, that's there same comes our which domestic the have a a point. entire abroad. from situation. does, in well. further an be of mean lot being a China as

in say be competitors. that the Orion, if place, would would our in that, general, business So to lighting I favorable put in relative for be should particularly

Amit Dayal

a at mean, the manufacturing that participate lines, here the of are build-out opportunities? I like How U.S. positioned to you commentary And involved onshoring may least lot on seen that on some are looks any in those from you those can the already in in? along be But pipeline happening give is you us in clarity you what infrastructure of build-out. we've some then related from this right, participate It bidding trying there to of in

Michael Jenkins

the back it sure going repeat have to correctly, question I'm to I make Amit.

So terms onshoring it's of and as investments of in about capacity some andâ€¦ new result of a those basically, things and the of types onshoring buildings

Amit Dayal

buildings manufacturing support that coming are that all New of activity. this are up up, coming onshoring to warehouses

if understand that to you're want positioned or in participating participate that? in to already Just of are some you

Michael Jenkins

Yes.

Okay. we that's I a our distribution now. new business project our channel. distribution still of significant understand through and -- focus part builds really business Absolutely, is that's and there, -- do. our a We

So that things. market and in general of everyone those little cost capital for due for new reasons builds has been of soft a to types

that are doing that line counter launched And new product is quite well but cost my referenced of positioned So to is our for is space. of build retrofits. new market and the in those last trends year, well in is as we remarks, very onshoring from well I a as some as very which TritonPro, active capital,

Operator

the Bill next Your of Instructions] question [Operator Management. with Tieton Capital line comes Dezellem from

William Dezellem

here. A of questions group

that in walk you bit detail you that did? with was me Let through the did. restructuring I if it more may, please a you what Would start,

Per Brodin

maintenance couple that of Bill, components primary a say within the I'd there division. were

that of self-perform our back force. the had the As levels that contracts of the kind level achieve did part hoped, scaled the on we not lapse of we pricing of technician

also took were people within also were are that our Then some out So would supporting supported COGS we maintenance a self-performing that have that there also COGS. -- been that contracts, within component within division. those which of personnel

that the the out, what they costs of lease the to. to of get that's related of $XXX,XXX we also out charge about a taken QX, some severance half incurred which that were which breakage G&A largest of, that fee that was lease. So that out operated in leased There was facility

William Dezellem

sorry, And Per, then -- ahead. go I'm

Per Brodin

one Yes, just to thing. I clarify was going

G&A, line QX of have the would For hit. cost from you're costs those been, what if considering just all say, $XXX,XXX, I'll that those to charged

William Dezellem

relative EV a weighting for And comments some to are expect larger going that second the then challenged charging you in the to other of is does be reason? projects or more half, either the that because LED that finishing imply

Michael Jenkins

not What grow plan all. up that it's I that what to The LED we were to is comments Bill, quarter. was business, No, we imply the XX% my we see second lights meant -- Hello, were Mike. to meant in at the say half. EV in

continue year. of We of see second the in level that half plus growth the to

component, do So lighting expect LED well. in be growth we continue as will the to our but strongest grow half second significantly to

William Dezellem

going one that your And then I'd question to ask unfair, but maybe a I'm perspective. is love bit

lighting these perspective, were in a almost I'm As just And toss projects understand would recognize forecastable. about why guess, I and that they delay not forecasted? were please. I But to that to not question, going imply think out inherently your delayed, the you

Michael Jenkins

a to technology these they in have us projects what been when large years. example. start. you was give their and The Sure. several as indications We working And the would projects I'll schedule company. with had were an given for works

And so we we try and as can. as conservative be

that. recognize to have of we be say so are obviously, But going portion we take customers the And a when projects to active.

project. be due So pushed but the at they some to realistic, the that of to a the we same of off internal workings were was that conservative as reality company, time. And wanted

performance difficult several have which of CapEx is they with we has the with the this tie works because, obviously, company's exactly can when of company to projects those things of forecast things. are in and the initiate rest those are for and financial so us in And types the to one

but realistic and it. at time, be of our an example. was best do we the So that the try conservative, and That's same nature and certainly

Operator

[ Siri Our from the comes of line question with Singular Research. next ] Gaucci

Unknown Analyst

focused to event project those is those or Just on do that delays is broader -- that a flow-through the 'XX particularly back that market 'XX a back? the sector Is for the come affecting into how And -- is going will that that when delays a revenue fiscal projects? primarily as trend? Or cadence fiscal well?

Michael Jenkins

Yes.

delays these individual experienced, variety we've circumstances. So that a there's been of

certainly I has some of uncertainty. think level macro there been

elections Now that and types we've falling. through we gotten rates those the interest and things, see of

As be we right terms of in I realize earlier the activity that's reference we of an are comments, month or and on current year what my referenced standpoint kind fact, strongest in in October would the above incredibly annual that projection. orders, excited about going our a of our I projections from the strong And had should on order very quoting now. to

occurred, So variety for these they that reasons. delays occurred of a

into will fiscal Some then carry will and of over activate some them in them quarter activate 'XX. of some quarter X, will X, in

Unknown Analyst

million million that recognized million that potential for a $XX wanted $XX million, $XX I you EV target? it the the mentioned and think guys had I pipeline, quarter, target you know to and the I the $XX around to you $XX And year get, of the much been on it mentioned has how Eversource highlighted million of contract. of for that on is there for $XX date? million. And as updated to to a revenue last just exceeding Eversource contract,

Michael Jenkins

Sure.

then half we thought to And exceed projection $XX first the Eversource that still million. for we could the year. the than relative the budget our million was is in less On semester been of realized of that exceed EV, has that. the overall our it $XX that's we And will said we and contract, target

Unknown Analyst

you some customers? part color. of us TritonPro was some was received think market expectations? that that numbers taking the What you the from are compared On you know feedback line, share. was your probably product I the to What gave I And

Michael Jenkins

strong, The I $X year-to-date, $XX for numbers line. million an that are million over product pipeline as indicated,

we we had that and will year. are across this a that, our see could were standpoint. is not would feedback we're a exceeding project there offering. this for certainly believe believe we expectations, from the we board we of Customer product get missing I launched say had when So that band market not we the that opportunities We this line, we

and of that. a point, some that up to, we we which can products those are so And Others, customers, that's is happy to great. do We're offering. up higher-performing in end TritonPro ultimately, trade Orion's selling to starting

happy TritonPro. very with overall, So

Unknown Analyst

And soon. on the that project that that might think further no in I the project a understand you mentioned will start think DoD on Europe, I there I $XX million impact line? had has And was that revenue if When numbers. impacting you correctly, commence the

Michael Jenkins

in do -- we you in the DoD we referenced revenue correct have did project yes, last received for So are POs. There expect no year. that on the that. we that to quarter was we Germany And relative opportunity, this new

performing start client. as providing again, to lighting for We're that them services to this project. doing is management yet as both a quarter. -- well that turnkey products work this expect turnkey We And light

And an be the will once extended the announcements. expect that's entire in are multiyear final through We stages shortly. further of completed we project, to make which done, we contract working for

Operator

session. concluding our for remarks. the I'll concludes now Q&A to Mike turn This Jenkins back call

Michael Jenkins

forward you Thank for again. investor in Please Relations upcoming hope our a We Thanks updating joining is information Their release. see 'XX progress of of or through press all any schedule team us at questions contact today. and to meeting. investors or you details with Investor the speak events, with balance look we to fiscal conferences. contact to regarding call, today's today's upcoming for as

Operator

Thank you. This concludes today's conference call.

Orion Energy Systems (OESX) 6 Nov 242025 Q2 Earnings call transcript