ORION ENERGY SYSTEMS, INC. Q3 FY2025 earnings call

• Landed 7 new LED lighting contracts with $100M-$200M revenue potential over 5 years.
• Restructured into 2 commercial business units (Solutions and Partners) to better serve customers and streamline overhead; anticipate $1.5M annual cost reductions via staffing eliminations; senior management and Board forgo 10% of salaries.
• Lighting gross margin improved due to cost engineering and TritonPro; maintenance gross margin rebounded. Overall Q3 '25 blended gross margin 29.4%, up 490 basis points.
• EV Charging pipeline sequentially growing despite federal funding uncertainty.
• Maintenance business reorganized, won new business, and solidified with a profitable base.

Lighting Business

• Q3 '25 gross profit was 30.1% vs 27.4% in Q3 '24. Cost engineering, plant layout, and supply chain strategies reduced manufacturing costs. TritonPro line offers competitive products with lower fixed costs.

EV Charging Solutions

• Year-to-date revenue up 48%. Q3 '25 revenue $2.4M vs $2.8M in Q3 '24. Expect strong Q4 from Eversource 'EV Make Ready' and Boston Public Schools projects.

Electrical Maintenance

• Q3 '25 revenue $3.9M. Gross margin rebounded to 26.4% from 6.2% in Q3 '24. Reorganized, closed a significant account starting in Q4, expected to grow to $2M-$5M annually.

• Fiscal '25 revenue outlook reduced to $77M-$83M; Q4 '25 revenue expected $19M-$25M.
• Fiscal '26 revenue outlook to be more specific in Q4 '25 results.
• Expect double-digit revenue growth and positive adjusted EBITDA in fiscal '26.

• Project delays due to macro factors, customer readiness, funding availability.
• Uncertainty around federal EV charging funding (NEVI program).
• NASDAQ listing status compliance issues (180-day period to regain compliance expiring in March).

Q: Can you talk about the pipeline, specifically the 7 new customers and projects with $100M-$200M revenue potential over 5 years, and how they're spread across segments?

A: The $100M-$200M is closed-won business. Magnitude of pipeline opportunities in 8 figures per annum, diverse customer base including building products retailers, ESCOs, municipal universities/schools/hospitals. EV opportunities are expanding sequentially but not in the $100M-$200M range.

Q: What's the status of inventory and potential write-offs due to reorganization?

A: Inventory has been reduced substantially over 18 months; no significant write-offs expected from restructuring.

Q: How are you targeting new maintenance customers?

A: Using internal sales force bolstered with experienced industry personnel; also leveraging partners and networks, with recently won business internally generated.

Q: Can you clarify the salary deferral for management?

A: Management and Board are forgoing 10% of salaries and retainers for the balance of fiscal '25 and until business performance improves; it's a complete give up, not a deferral.

Q: What's the status of NASDAQ listing compliance?

A: In the initial 180-day period to regain compliance, expiring mid-March. If not in compliance, apply for a 180-day extension; hope to regain compliance via execution of the plan.