LSI Industries (LYTS) Q2 2025 earnings summary

Executive summary

• Net sales for Q2 FY2025 rose 36% year-over-year to $147.7 million, with organic sales up 14%, driven by strong demand in Display Solutions and grocery, and supported by the EMI acquisition.

• Adjusted EBITDA increased 20% year-over-year to $13.3 million, with free cash flow up 21% to $8.8 million, reducing net leverage to 0.6x.

• Backlog entering Q3 FY2025 was up 12–14% year-over-year, with strong quoting activity and order rates in key verticals.

• Operating income for the quarter was $8.5 million; adjusted net income was $8.0 million ($0.26 per diluted share).

• EMI acquisition contributed $23.4 million to Display Solutions sales in Q2 FY2025.

Financial highlights

• Q2 FY2025 net sales were $147.7 million, up 36% year-over-year; organic net sales grew 14%.

• Adjusted EBITDA was $13.3 million, with adjusted operating income at $11.7 million and adjusted net income at $8.0 million.

• Free cash flow for the quarter was $8.8 million; trailing twelve-month free cash flow exceeded $41 million.

• Net debt to adjusted EBITDA improved to 0.6x from 1.3x post-EMI acquisition.

• Diluted EPS for the quarter was $0.18 (reported) and $0.26 (adjusted).

Outlook and guidance

• Management expects continued growth in Display Solutions, supported by EMI and strong demand in grocery, refueling, and QSR verticals.

• Order rates and backlog remain strong, with a 12–14% year-over-year increase entering Q3 FY2025.

• Margins in Q3 anticipated to match Q2, with incremental improvement expected as operational efficiencies return.

• More than 40 new product launches and refreshes are anticipated in FY2025.

• Free cash flow growth and capital allocation will focus on debt reduction, organic growth, and strategic investments.