Orion Energy reports Q3 EPS (75c), consensus (7c)

Reports Q3 revenue $20.3M, consensus $19.83M. "Although we achieved a sequential revenue improvement in Q3, delays in the activation of large Department of Defense and automotive projects have shifted much of that revenue into Q4’23 and FY 2024. Lighting distribution channel sales were lower than anticipated, likely due to the impact of rising interest rates and economic uncertainties on construction activity, that also appear to have impacted Q3’23 revenue in our Energy Service Company channel. As anticipated, we have experienced a $50M decrease in business from our largest customer and an online retailer through the first nine months of FY’23. Despite this, year-to-date, we have grown the remaining business by 9% versus the year-ago period, and our initial outlook for FY’24 anticipates revenue growth of at least 30%. Our growth outlook is supported by the environmental benefits and costs savings delivered by our LED lighting solutions. We continue to advance large projects in our national accounts business as well as other maintenance and cross selling opportunities. We are also optimistic about our ESCO business where despite some softness in the recent quarter, we are developing a pipeline of significant opportunities rooted in the energy efficiency benefits of LED lighting and expect ESCOs to contribute meaningfully to growth in FY’24. We are also excited by the strong growth prospects in our new Voltrek EV charging solutions business which we purchased early in Q3’23. Voltrek is off to a strong start, having already nearly achieved the lower end of our $3-$5M revenue estimate for the second half of FY’23. We are now building out the sales and service infrastructure required to extend Voltrek’s reach across the US from its current focus in the northeast, and we have a growing base of initial dialogues with some of our larger national accounts. We believe EV charging solutions have the potential to become a significant revenue opportunity for Orion over the next few years. Overall, we are focused on helping our customers achieve their energy efficiency and sustainability goals with the highest levels of product and service quality, rooted in our customer for life commitment. From a financial standpoint, we believe Orion is well positioned to fund our operations and growth initiatives. We were operating cash flow positive in Q3 and expect Q4 will be our strongest revenue quarter of the year."