January 23, 2024
Orion Shows Mix of Bright Spots and Tempered Expectations
Company expects to miss FY2024 revenue target, yet improves stock price and performance in key areas
When a company issues preliminary financial results before its official quarterly earnings report, it often aims to get ahead of unfavorable news. However, in its latest preliminary results, Orion revealed some positive aspects, contrasting with lowered expectations for the current fiscal year ending March 31, but didn’t seem to disclose any significantly adverse news. Its stock has performed well in recent days, too, possibly helping the company address the looming threat of NASDAQ delisting.
Orion, a provider of LED lighting, EV charging, and electrical maintenance solutions, reported a promising increase in its total revenue for Q3’24. Estimated to be between $25.8M and $26.2M, this figure marks a significant 28% surge compared to the same quarter in the previous fiscal year, highlighting a necessary trajectory in business expansion, as it backfills disappearing business revenue from previously completed national account work.
Central to Orion's performance is the notable growth in its LED lighting segment. Revenue from this core area is expected to climb to approximately $18.6M in Q3’24, up from $14.2M in Q3’23. Additionally, the maintenance services segment of the company also saw a healthy increase, rising to about $4.6M in Q3’24, compared to $3.3M in the corresponding quarter of the previous year. This growth can be attributed to strategic contracts, such as a significant 3-year agreement for preventative lighting maintenance services with a large retailer, believed to be The Home Depot.
Despite these achievements, Orion has had to recalibrate its full-year revenue expectations. The company now anticipates FY 2024 revenues to fall between $90M and $95M, a downward revision from the previously forecasted $100M. This adjustment reflects some challenges and delays in project completion and revenue realization, yet still suggests a solid growth range of 16-23% despite an expected miss of the original 30% target.
Company Addresses Threat of NASDAQ Delisting: Seven down, three to go
Orion (Nasdaq: OESX) has recently seen its share price improve. In December, when the company’s stock was consistently hovering near $0.90 per share, Orion received a warning notification from NASDAQ citing threat of delisting due to non-compliance. NASDAQ's Bid Price Rule requires that listed securities maintain a minimum bid price of $1.00 per share. To address this Orion must have its stock close at or above this price for at least 10 consecutive business days. As of yesterday's close at $1.08, Orion has achieved a seven-day streak of meeting NASDAQ's requirement, addressing the warning effectively.
Orion expects to report its final Q3’24 financial results on Wednesday, February 7, 2024.
