OESX

• Core Financial and Operational Progress • This marked Orion's seventh consecutive quarter of positive adjusted EBITDA, extending a trend of profitable growth that began after the successful 2026 fiscal year turnaround, which delivered full-year revenue of $86 million and positive adjusted EBITDA of $2 million that outperformed prior guidance. • Q1 2027 net income was $2 million, up from a net loss of $1.2 million year-over-year; adjusted EBITDA was $2.5 million, up from $200,000 year-over-year. Total operating expenses were flat year-over-year, as lower compensation and G&A costs offset higher sales and marketing commission expenses. • Cost containment initiatives, an improving sales funnel, and a strengthened proprietary domestic supply chain have all driven improved performance. Orion's Made-in-America manufacturing facility in Manitowoc, Wisconsin enables on-time, on-budget delivery and a reputation for unmatched reliability for large projects.

• Strategic Growth Drivers • Orion is positioned to capture three large interconnected growth opportunities in U.S. industrial electrification: reshoring and refurbishment of domestic industrial, retail, and government facilities; electrification of private and public vehicle fleets; and AI-driven new data center construction. • The EV charging (Voltrek) segment has strong brand recognition for complex public and commercial infrastructure projects (e.g. public bus fleets); the company recently hired industry leader Karen Peck to lead EV charging sales, with a focus on scaling the business to a broader customer and geographic base. • Orion has successfully entered the fast-growing hyperscale data center market with a custom-designed multipurpose linear lighting fixture that enables fast, easy integration into data center floor plans, and already secured a multimillion-dollar engagement in Q1 2027.

• New Initiatives and Capabilities • Orion is expanding revenue opportunities with existing and new large customers in automotive, retail, and public sectors across LED lighting, electrical infrastructure, and EV charging. • The company is adding new capabilities including battery energy storage systems, electrical contracting, and recently launched LED roadway lighting products, and is focused on growing service and maintenance revenue for existing EV charging customers.

• Management maintains full fiscal 2027 guidance for total revenue between $95 million and $97 million, with full-year positive adjusted EBITDA.
• Management expects overall gross margins to remain strong throughout fiscal 2027, but will vary quarter-to-quarter due to changes in revenue mix and sales volume. Excluding the one-time 130 basis point tariff benefit in Q1, management expects full-year consolidated gross margin to settle in the 30% to 32% range.
• Management expects most revenue contribution from the new data center segment will come in fiscal 2028, with only a small initial ramp in the back half of fiscal 2027.

Orion Energy Systems reported total Q1 fiscal 2027 revenue of $25.7 million, a 32% increase from $19.6 million in Q1 fiscal 2026. 1. LED lighting segment: Q1 2027 revenue was $17.7 million (68.9% of total revenue), up from $12.9 million in Q1 2026. Gross margin for the segment was 37.8%, up from 31.8% year-over-year. Revenue growth was driven by increased project activity and distribution channel sales, partially offset by lower ESCO channel sales. 2. Maintenance segment: Q1 2027 revenue was $4.1 million (15.9% of total revenue), up slightly from $4 million in Q1 2026. Gross margin improved to 28.3% from 22.4% year-over-year. 3. EV charging solutions segment: Q1 2027 revenue was $4 million (15.6% of total revenue), up from $2.7 million in Q1 2026. Gross margin was 26.9% in Q1 2027, down from 33.8% year-over-year. Overall company gross margin was 34.6% in Q1 2027, up from 30.1% in Q1 2026, including a 130 basis point net benefit from tariff changes and refunds.

• Forward-looking statements (including guidance) are inherently uncertain, and actual results could differ materially from current expectations due to unstated risks, which are detailed in the company's recent press release and SEC filings. The company disclaims any obligation to update forward-looking statements unless required by regulation.
• To achieve full-year positive adjusted EBITDA, Orion would need to hit its top-line revenue guidance and avoid unexpected negative gross margin shocks or unplanned increases in operating expenses.
• The EV charging segment faces ongoing sector-wide market uncertainty in the U.S., though the company delivered strong year-over-year revenue growth in Q1 2027 despite this environment.
• Project revenue is subject to timing shifts from weather delays and customer construction scheduling changes that can create quarter-to-quarter revenue variability.

Q: With your successful entry into the fast-growing AI data center market, are you being overly conservative with your 95-97 million fiscal 2027 revenue guidance? What is the status of the data center sales pipeline and when will meaningful revenue start to flow?

A: Management does not believe guidance is overly conservative, and remains bullish on the full year. The company is still in early innings of the data center market, with active conversations with multiple new customers, but expects most data center revenue will be recognized in fiscal 2028 rather than 2027. Data center projects are typically won building-by-building on a campus, and the pipeline will grow as Orion delivers on initial projects.

Q: What is your current backlog exiting Q1, and what is the status of the potential large Home Depot interior lighting project? Could that contribute to fiscal 2027 revenue?

A: Exiting Q1, Orion's backlog stands at approximately $240 million, and the overall sales pipeline continues to strengthen. The Home Depot opportunity is still in play, with ongoing product testing and final selection, and management remains positive about the odds of securing the contract. The company has not included any revenue from this potential project in its current 2027 guidance.

Q: Excluding the one-time tariff benefit, what is the expected sustainable consolidated gross margin for full fiscal 2027, and how much capital expenditure is required to support growth in data center and roadway lighting volumes?

A: Management expects consolidated gross margin to settle in the 30% to 32% range for the full year. No significant fixed asset investment is required to support the new data center and roadway lighting programs; any minor investment will be amortized as part of cost of goods sold, with no major incremental capital spending planned.

Q: The maintenance segment's Q1 gross margin improved significantly year-over-year. Is this improvement structural or one-time, and why was maintenance revenue essentially flat this quarter despite strong growth in the company's product segments?

A: The gross margin improvement is largely structural, driven by ongoing efficiency gains and favorable quarter mix (higher-margin product work outweighed lower-margin service work). Gross margin is not expected to improve much further from current levels, and this quarter's result is representative of the segment's target range. There is no strong direct correlation between recent product revenue growth and maintenance revenue, so flat year-over-year maintenance revenue does not signal an underlying issue.