February 11, 2026
LSI’s Lighting Segment is Punching Above its Weight
Four nuanced takeaways at the midpoint of LSI Industries’ fiscal 2026
Back in January, we reported that LSI Industries’ second quarter revenue held steady at $147.0 million — nearly flat year-over-year. But inside that number was a split story: Lighting grew 15%, while Display Solutions declined 10%. That made it the third consecutive quarter of double-digit sales growth for Lighting, reinforcing its momentum even as total company revenue treaded water.
Over the past several years, LSI’s business mix has shifted — aided in part by strategic acquisitions — while Lighting has steadily built strength. With the company’s latest 10-Q now public as of Monday, we’ve taken a deeper look at the numbers and surfaced four takeaways that offer more than the typical earnings call recap.
Here are four takeaways that cut through the headline numbers.
1. Display Has Overtaken Lighting in Revenue, But M&A Made the Difference
Five years ago, Lighting accounted for 62% of LSI’s full-year revenue. As of the first half of FY2026, that figure has reversed: Display Solutions now leads with 55.4%, while Lighting contributes 44.6%.
This isn’t a case of Lighting falling behind. It’s grown consistently — up 16.4% year-over-year in the first half. But LSI’s M&A strategy has been a force multiplier for the Display segment. Most recently, the March 2025 acquisition of Canada’s Best Holdings added structural and print capabilities that bolstered Display’s top line. These bolt-on acquisitions — including millwork, graphics, and project services businesses — have pushed the revenue mix toward Display, even as Lighting has become more operationally efficient.
The implication? The mix shift says more about portfolio construction than segment health.
2. Lighting Is Outperforming on Margin and Growth in 2026
The 10-Q confirms what margin-watchers suspected: despite being smaller in revenue, Lighting is delivering stronger profitability. For the first six months of FY2026, Lighting posted a 13.9% adjusted EBITDA margin versus 12.0% for Display. Adjusted operating income was also higher: $17.5 million in Lighting vs. $17.1 million for Display.
Year-over-year, Lighting’s adjusted EBITDA jumped nearly 28% on 16% revenue growth — a sign of improved pricing discipline and execution. And unlike Display, which has benefited from acquisition-fueled scale, Lighting’s recent performance is entirely organic.
It’s worth noting that Display’s margins this period may be temporarily diluted by one-time acquisition costs — including expenses tied to the integration of Canada’s Best Holdings. Even so, Lighting’s consistent margin expansion suggests its operational fundamentals are stronger, and less dependent on M&A timing.
3. Lighting and Display Serve the Same Clients — Very Differently
A look at revenue composition shows two businesses with distinct economic profiles. Lighting’s revenue is 81% engineered LED lighting and poles while Display is rooted in labor-intensive fabrication, with 78% of its revenue from printed graphics, millwork, and custom fixtures.
But despite these structural differences, both segments are often deployed side by side — particularly in LSI’s focused verticals. The company’s vertical market success in convenience stores, gas stations, and quick service restaurants (QSRs) gives it access to multi-location accounts that don’t operate like traditional bid-driven construction projects. Once LSI lands a national account, it’s well-positioned to provide both the lighting and the visual display elements — sometimes in the same order.
That hand-in-hand relationship gives LSI a cross-segment bundling advantage that few competitors can match. It’s not just about what each segment sells — it’s about how they sell together.
4. Circuit Boards and Vertical Integration in Lighting
One small detail: the 10-Q confirms that LSI designs and manufactures its own electronic circuit boards, assemblies, and subassemblies as part of the Lighting segment — and some of these are sold directly to external customers.
That level of vertical integration is rare among mid-cap lighting manufacturers. It positions LSI to offer smarter, more tightly integrated solutions in controls and connected lighting, while also giving it greater quality control and cost leverage. Yet this capability wasn’t mentioned on the earnings call and hasn’t been featured prominently in investor messaging.
This suggests LSI is investing behind the scenes in capabilities that could support future differentiation — especially as demand for smart systems accelerates.
Final Thoughts
The topline numbers paint Display Solutions as LSI’s primary growth engine. But look a little closer, and Lighting emerges as the more efficient, faster-growing, and strategically well-positioned business — particularly given its integration with high-retention vertical accounts and its expanding margin profile.
While Display may lead in revenue thanks to recent acquisitions, Lighting is making its case through performance. If that trend continues, it may shift not just the revenue mix — but the narrative around where LSI’s long-term value really lies.
