Not the 50 million mcap the tape makes it look like. Orion is a steady, medium-sized Wisconsin lighting and EV company with $86M in revenue and last year they quietly pulled off the hard part. Gross margin reset back to 32.6% (from mid 20s), adjusted EBITDA went positive again (6th quarter in a row), and theyre guiding next year to $95-97M. Slow and steady, but growing.
The thing most people dont realize is these guys are the main LED lighting distributor to Home Depot. Thats the Fortune 100 retailer everyone reports as their big customer. Theyve got one of the best track records in the business for actual LED quality durability, reliability, the boring stuff that keeps Fortune customers reupping decade after decade.
Now the number that frames the whole story - take out Home Depot and the rest of the business has basically been flat at $60-65M for years. So the real question was never the margin - it was whether anything else finally grows.
For the first time in forever, Orion has put together a real candidate. Theyve started shipping a data center LED fixture to a hyperscaler, announced as a multi-million dollar deal, made in their own US plant and the key thing is this isnt just a slide. They announced the AI product line only about a month ago and theyre already shipping, so theres some real interest there, not just a roadmap promise. As far as I can tell theyre the first in their space to do it - a genuine first mover spot in a market thats about to explode. Their market cap is a few percentage points of all their competitors and this could really help close the gap for them.
I also love their focus on their supply chain, because its what makes the move real. Most lighting solutions in this country starts overseas. Some parts out of Asia, assembled, dragged onto a boat, through customs, landing weeks late depending on Trumps mood. Orion builds the whole thing in Wisconsin, ground up, on a chain theyve spent years stitching together perfectly. So when tariffs whipsawed everyone elses costs last year, their customers mostly didnt feel it. Thats part of why the margin reset actually held.
I believe its exactly what a hyperscaler wants, and god only knows how many thousands of centers are to be built these coming years. If youre building a data center, your whole problem is lead time - you need fixtures when the buildings ready, not three months after, and you don’t want a surprise tariff blowing up the budget. You also dont want to waste electricity on something as boring as lights, which may also increase the temperature. So you need the best LED lighting systems there is, and in my view thats OESX.
Orion quotes a domestic part, customizes it to the floor plan, and ships on a timeline they control. In a world where everyones import exposed, the made-in-wisconsin is a real edge, not a slogan.
As of today, the AI data center product is one fixture, one customer, product-only, nothing more in the backlog. Basically just a toe in the water, but the math is insanely good here. CEO keeps reiterating 10,000+ data centers running by 2030. Orion doesnt need to win too many to move a $90M base to a $500M base. Getting the first order was impressive, but Im watching the reorder and orders of much bigger scale.
Alongside that, their electrical contracting work keeps growing out of existing lighting jobs (licensed in 45 states, so customers just hand them the next scope), and management wants to scale this up as well.
Still plenty to be skeptical about here. Heavy reliance on one big customer, even tho Home Depot keeps scaling up their contracts, a somewhat thin balance sheet, and a data center story that had a great start, but needs to scale way further. But a $30M backlog plus $15M of maintenance already covers about half the guide, and the real tell comes in August - does the margin hold as revenue grows.
Sidenote: Listened in to their last few calls and this management is 10/10 and they keep loading up stocks.
Small position as of now as Im holding 420 stocks for the fun of it, but watching with real interest.
The stock float is also low in this one.
Not investment advice. As with all stocks, do your own work and research before going in.